Lending

Validus And Lighthouse Canton Launch a S$ 20 Million SME Singapore Financing Fund

Validus Capital and Lighthouse Canton Group today launched the LCV Trade Finance Fund of initial asset size S$20 million (to scale up to S$200 million) dedicated towards financing SMEs in Singapore.

Validus is a Singapore-based MAS-licensed entity focused on bridging cash flow requirements for SMEs in Singapore; With disbursements over S$85 million over the past 24 months, Validus is one of the leading SME financing marketplaces in Singapore. Lighthouse Canton is an independent Asset Manager with a proven track record across various asset classes.

Whilst Singapore SMEs make up the backbone of the economy employing 70% of the workforce and contributing to over 50% of Singapore’s GDP, they have been in need for timely and low-cost growth financing. The unmet financing gap that SMEs face is estimated at S$20 billion. A portfolio company of Vertex Ventures (member of Temasek Holdings), Validus aims to finance at least S$1 billion of this gap in the next three years.

While the Fund aims to raise S$200 million in the next 3 years, Lighthouse sees a huge potential with growth beyond that.

Ajit Raikar, Co-founder & CEO at Validus Capital said:

Ajit Raikar

“Validus Capital’s curated online financing platform is helping responsible Corporates in Singapore help their SME vendor base and ensure SME vendors have access to growth capital at bank like rates.

Our collaboration with Lighthouse Canton ensures that we bring strong, stable and reliable investors on our platform to support the ever-growing financing need of Singapore SMEs.”

The Validus platform provides SMEs with access to finance and has disbursed over 1,100 facilities across multiple product types. It connects with Singapore Government Linked Entities and private as well as listed corporates and on-board their SME vendors under a pre-approved program. This creates awareness amongst the SMEs that they have access to collateral-free financing options for on-going and future projects.

Accredited investors in the region and globally currently do not have access to the Singapore SME asset class. Lighthouse Canton will, through this Fund, bring in accredited investors globally and get them access to this asset class via Validus’s platform for their portfolios. Given that most financing facilities will be of short tenures, the Fund will be able to redeploy the capital across multiple SMEs thus creating diversification in the portfolio.

Rajesh Sundaresan, Co-founder & CIO at Lighthouse Canton said:

Rajesh Sundaresan

“SME financing is a lucrative and exciting space that we have been exploring for some time now. This investment opportunity is rarely accessible to investors. With the launch of this Fund, we will bridge this gap between demand and supply which until now was being intermediated by the banking channels.

This investment, while offering better returns than similar duration fixed income investments, will also allow investors to diversify their fixed income portfolio outside of large corporate exposure.”

With institutional investors becoming increasingly active in small business lending, the LCV Trade Finance Fund leads the trend as the first and only fund in the region to exclusively invest in loans originating on a lending platform.

Featured image via Freepik