Validus, a Singapore-based lending platform for small and medium-sized enterprises, is acquiring a loan portfolio from Citigroup to bolster its top-line revenue and customer base.
Validus expects to create synergies with the loan portfolio of the small banking unit of Citigroup. It is a portfolio of loans to hundreds of small businesses in Singapore, which is the target market Validus serves.
With this acquisition, we will be able to further serve the financing need of these SMEs to grow but also offer them business accounts, spend management solutions, and payment services to manage their business, according to Goel.
Goel said that the deal will be financed through a securitization facility. The acquisition will be completed in April of 2022.
Goel noted that this is Validus' second acquisition. KlearCard, Singapore, is a business payments and expense management platform.
In June 2021, it was reported that the CitiBusiness unit would be closing. In January, Citigroup will sell its Southeast Asia retail operations in Indonesia, Malaysia, Thailand, and Vietnam to United Overseas Bank.
Roy Phua, head of mortgage and CitiBusiness of Citibank Singapore, said that the sale of the loan portfolio in Singapore follows the wind down of the small business banking unit.
Goel noted that Validus has made independent hires to manage the team while acquiring the loan portfolio and customers.
There is value creation for Citi customers who will be transferred to Validus.
Validus has added more than 25 percent of new hires since its last funding. In January, the company crossed a significant milestone of over $1 billion in total funds disbursed across more than 50,000 loans to small businesses in Singapore, Vietnam, Indonesia and Thailand. Goel said that on average, 90 percent of its customer are return borrowers.
Goel said that the company will be concluding another fundraise. Validus is backed by investors such as Fmo, Vertex Growth, and AddVentures.
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