Validus, Fintech Nation launch US$10 million fund for embedded finance for SMEs

[SINGAPORE] Small and medium-sized enterprises (SME) financing platform Validus and Fintech Nation, a public benefit corporation, announced the launch of a US$10 million Embedded Finance Fund on Thursday (May 8).

This fund has completed its first close and has already deployed the first tranche of capital into projects that provide growth capital for SMEs. The Embedded Finance Fund will focus on embedded finance opportunities across sectors such as supply chain, food and beverages, and consumer goods.

“At Fintech Nation, we believe that SMEs are the foundation of sustainable societies – they are the engines of innovation, employment and local prosperity,” said Vanessa Ho, co-founder of Fintech Nation Fund, one of the funds offered by Fintech Nation.

Embedded finance is the integration of financial services into non-financial companies’ platforms.

There is an unmet credit demand from SMEs across South-east Asia, with the estimated SME credit gap exceeding US$320 billion. The new fund will provide financing via Validus’ platform in Thailand – Siam Validus – and Indonesia – Batumbu.

Ecosystem partnerships and real-time transactional data will be tapped to make the lending process efficient, scalable and with risk mitigation.

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“By combining data-driven underwriting models with innovative funding structures, we can build inclusive financial ecosystems that unlock growth and development for SMEs at every level,” said Milena Naitoh, group head of corporate development and capital markets at Validus.