Validus, an SME financing platform, has ceased new loan disbursements in Vietnam, DealStreetAsia has learned.
The company cited delays in regulatory approvals, and will now focus on debt collection while continuing to serve existing investors and customers,
Validus Vietnam has been scaling back its loan book in the country over the past year, reducing it by more than 50%.
This was due to prolonged uncertainty surrounding the regulatory sandbox or licensing framework, which has been in discussion since 2020. Validus is also prioritizing markets with clearer regulations and stronger profitability.
It plans to reassess lending only when there is greater regulatory clarity.
Vietnam currently accounts for less than 1% of Validus Group’s outstanding loan portfolio.
Validus entered Vietnam in 2019 with the backing of local asset management firm VinaCapital.
In 2022, it formed a joint venture with TTC Group and Do Ventures to address SME financing opportunities, leveraging TTC’s ecosystem across energy, real estate, sugar, and hospitality.
That same year, it appointed Dinh Van Binh as CEO of its Vietnam operations.
Founded in 2015 and headquartered in Singapore, Validus operates in Indonesia, Singapore, Thailand, and Vietnam, with investors including FMO, Vertex Growth, Vertex Ventures Southeast Asia and India, AddVentures by SCG, K3 Ventures, Openspace Ventures, and VinaCapital Ventures.
Despite the Vietnam pullback, the group’s financial performance has improved.
Regulatory filings show that Validus Investment Holdings, the holding entity for Validus Capital and its subsidiaries, narrowed its losses in 2023 as revenue surged.
The group reported a 42% increase in revenue to S$19.43 million (US$14.74 million) from S$13.69 million (US$10.39 million) in 2022.
Meanwhile, losses nearly halved to S$8.84 million (US$6.71 million) from S$18.82 million (US$14.28 million) the prior year.
Validus Co-founder and Group CEO Nikhilesh Goel previously told DealStreetAsia that the company is on track to achieve profitability by 2025.
However, as a standalone entity, Validus Capital saw a slight revenue dip in 2023 to S$2.26 million (US$1.71 million) from S$2.69 million (US$2.04 million) in the previous year.
Its losses significantly narrowed to S$5.37 million (US$4.07 million) from S$12.88 million (US$9.77 million).
Featured image credit: Edited from Freepik
