Validus halves losses amid 1.4x growth in loan portfolio

Singapore-based Validus posted strong revenue growth for the second year running, according to its most recent set of audited financials.

Revenue increased 42% to US$14.8 million in 2023 compared to the previous year. The financing platform had logged 2x revenue growth in 2022.

The Vertex Ventures-backed company, which offers loans to small and medium businesses (SMEs) and other financial services, curbed its expenses, which rose by a slower rate of 7% year on year. As a result, loss after income tax narrowed by over 50% in 2023.

Beyond loans

The uptick in revenue was driven by a “significant increase in our loan book across the group, growing 1.4x over 2023 – a trend that has continued into 2024,” Validus co-founder and group CEO Nikhilesh Goel tells Tech in Asia.

The firm’s revenue mainly comes from commissions on loans disbursed to borrowers and on interest earned by lenders on the platform. It also directly extends loans on the platform and earns interest income from them.

Photo credit: Validus

With SMEs representing 85% of the labor force and contributing to 45% of regional gross domestic product (GDP), Validus has substantial room for growth across Southeast Asia.

The company has disbursed over US$4.1 billion in loans to small and medium-sized enterprises since its launch in 2015 and claims to be the largest SME lender in the region.

Goel says Validus is on track to reach net profitability and hit breakeven in the first half of 2025.

It has also been expanding its product offerings beyond loans. In 2022, it launched neobanking products such as business accounts, corporate cards, foreign exchange money transfers, and expense management tools.

These started to show traction in 2023, according to the company.

While these products have been generating revenue, “they are designed to complement our core SME financing business rather than act as standalone offerings,” says Goel. They help the company increase engagement with customers and gain “valuable data to support further lending decisions.”

Goel added that Validus plans to launch two more products in 2025, including deep-tier supply chain financing and closed-loop ecosystem embedded financing.

Toeing the line

Validus has demonstrated cost discipline even as it expanded. Its biggest expense item – salaries and employee benefits – was stagnant in 2023.

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