When Validus, a fintech pioneer in business lending, sold its Singapore operations to digital bank GSX earlier this year, it marked the end of an era for one of the region’s most resilient lenders – and a revealing moment for digital banking in Asia.
Nikhilesh Goel, co-founder and CEO of Validus’s holding company in Singapore, says the sale was less a retreat than a strategic pivot. “We didn’t just sell a business. We exited a market that, for all its promise, could never deliver the scale or regulatory support we needed,” he told DigFin.
Founded in 2015, Validus began as a peer-to-peer lender, but quickly realized that model was unsustainable. Unlike its rivals, Validus never took retail money. Its investors were high-net-worth individuals, then family offices, and eventually banks. “You can’t break even without bank money,” Goel said. Today, 90% of Validus’s capital comes from banks.
But in Singapore, Validus hit a wall. The city-state’s small and highly competitive SME sector meant the company could never build a standalone $500 million loan book. Worse, Singapore’s top three banks kept a tight grip on financial infrastructure, locking Validus out of credit bureaus and local partnerships.
“There’s so much talk about open banking and fintech licenses, but it’s mostly window dressing,” Goel said. “You need a regulator that forces banks to change. In Singapore, that didn’t happen.”
The GSX deal
By early 2025, GSX Bank, the digital-licensed bank backed by Grab and Singtel, was struggling to crack the SME market. Its leadership approached Validus, seeking a ready-made solution. The result: an all-cash sale of Validus’s Singapore business, with no layoffs.
“This is the rare M&A where no one lost their job,” Goel said. “In fact, GSX is now adding people to the team.” The deal marked the end of Validus’s Singapore chapter, but not its regional ambitions.
With proceeds from the sale, Validus is doubling down on Indonesia and Thailand, where regulatory tailwinds and a vast SME base offer far more promise. In Indonesia, banks are required to allocate 20–25 percent of their loans to productive sectors. This mandate is meant to address a $45 billion annual funding gap for SMEs. Validus, now eight years into its Indonesian journey, is profitable there, with a three-year compound annual growth rate of 80 percent, Goel says.
Thailand is nearing breakeven, and the company expects to turn a profit by year-end. In both markets, Validus has built deep relationships with anchor corporates – companies like Unilever and ST Engineering – whose supply chain data powers its lending decisions.
“Any information from borrowers themselves is useless,” Goel said. “But when the data comes from anchor corporates, fraud goes away. Most losses are addressed. Then it’s about solving for credit risk.”
Validus’s journey is a case study in what it takes to succeed in fintech. Unlike flashy rivals who chased instant loans and retail apps, Validus focused on the unglamorous but essential work of supply chain finance. “Most VCs hated this model,” Goel recalled. “They wanted sexy, instant loans. But most of those players are now gone.”
Today, Validus is the implementation arm for banks in Indonesia and Thailand, helping them meet regulatory quotas by providing tech-driven access to SME data. “Banks can’t reach SMEs on their own,” Goel said. “Supply-chain data is too tech-intensive for them. So they partner with us.”
Digital banking barriers
The GSX deal also highlights the challenges facing digital banks in Singapore.
A few look like early success stories: Trust Bank, using Standard Chartered’s license and sister bank Mox’s tech stack, has quickly become Singapore’s fourth-largest bank by active customers thanks to the distribution power of its other shareholder, NTUC, a labor union and insurance group. The question is future growth.
The city’s other fully licensed digital banks appear to be growing much more slowly. Mari Bank (Sea Group, with its Shopee e-retailer) and Green Link Digital Bank have not made any kind of splash. Ant Financial’s ANEXT Bank was built with the sort of API-heavy capabilities of a digital bank in mainland China, but few Singaporean partners (such as smaller merchants) are capable of using these. None has a readily available ecosystem comparable to, say, KakaoBank in Korea.
This means it will take a long time to build a sizeable loan book. GSX, recognizing this, fast-tracked its growth by acquiring Validus’s Singapore business.
Validus is now focused on building an ecosystem around its core lending businesses in Thailand and Indonesia. The company is exploring adjacencies like SME insurance and employee loans, and is open to M&A, but not for another lender. “We’re looking for software that supplements our look-through,” Goel said.
Nor are the founders considering a liquidity event. The GSX sale offered them a chance to cash in some of their equity, but instead they put all the proceeds into the business.
“A growing, profitable business always has a liquidity event,” Goel said. But the track record for IPOs and SPACs out of Southeast Asia is poor: they’ve all lost money in the public markets; only Sea Group’s stock price is above its IPO price, although far below the highs of a bubbly 2021. And local stock exchanges aren’t attractive.
Instead, Validus is preparing for a strategic sale or investment, with Japanese and Korean banks as one possible partner. “They could take a minority stake or buy one part of the business, and let it grow for decades,” Goel said.
However, he insists there is no need to seek a deal right now. The company has survived where others have failed by focusing on unit economics, regulatory alignment, and the hard work of building credibility with banks and corporates. It’s still seeking growth rather than trying to just be profitable.
“We’re turning the Forbes 30 Under 30 on its head,” Goel said. “We want to be part of the ‘30 Over 30’,” meaning 30 percent compound annual growth and 30 percent return on equity.
