GXS Bank received the regulatory approval to acquire Validus Capital, the Singapore arm of Validus Investment Holdings, marking the first acquisition of a local fintech by a city-state digital bank.
In a statement on Monday (April 14), GXS said the deal, set to close by April 15, 2025, is an all-cash deal and will make Validus Capital a fully-owned subsidiary of GXS Bank. The value of the buyout was not disclosed.
The acquisition came just months after the firm confirmed to DealStreetAsia that it had exited the lending market in Vietnam—one of four markets where it then operates. Founded in 2015, Singapore-based Validus has a presence in Indonesia, Thailand, and its home market.
Validus Group will continue to be headquartered in Singapore and will redouble its commitment to core markets in Indonesia (where it operates under the brand Batumbu) and Thailand, where the untapped addressable markets are much larger and deeper.
“Batumbu has been highly profitable for the last three years, and with this reorganisation, Validus is now profitable at a Group level – one of the few fintechs in the region to have achieved this milestone,” Nikhilesh Goel, Co-Founder and Group CEO of Validus Group, said in the press statement.
Established in 2015, Validus Capital said it has lent over $1 billion in supply chain financing and working capital loans to thousands of SMEs in Singapore. Its backers include FMO, Vertex Growth, Vertex Ventures Southeast Asia and India, AddVentures by SCG, K3 Ventures, Openspace Ventures, and VinaCapital Ventures.
The SME lending platform’s 2023 financials show that it was able to significantly cut its losses during the year, driven by a sharp increase in revenue from higher commissions and interest earned on SME loans, according to regulatory filings.
Unlocking Synergies
The acquisition hopes to unlock “significant synergies” between both entities, said GXS Bank Group CEO Muthukrishnan Ramaswami. The deal will leverage GXS Bank’s balance sheet, ecosystem and regional network to expand Validus Capital’s digital lending solutions to a broader base of SMEs.
“Validus Capital’s suite of financing solutions enables GXS Bank to help SMEs unlock cash flows in a timely manner. Instead of waiting for payment for work done or goods supplied, SMEs will be able to take advantage of our supply chain finance and working capital loans, powered by Validus Capital. The sooner they receive capital, the faster they can invest in growth opportunities,” Ramaswami said.
In November 2024, GXS Bank, backed by a consortium including Nasdaq-listed Grab and Singtel, said it would enter business banking early this year.
GXS Bank currently offers services to sole proprietors through its GXS Biz Account, which provides fee-free daily interest, and the GXS FlexiLoan Biz, an unsecured credit line. With the acquisition of Validus Capital, the bank hopes to expand its offerings to a larger SME base.
The bank expects to complete the integration of Validus Capital into GXS Bank by year-end.
Currently, four banks hold digital bank licenses since the framework was launched in 2022. GXS Bank, along with Sea Ltd-backed MariBank, ANEXT Bank, and Green Link Digital Bank, are among the other licensed players.
