Veritas Finance, the Chennai-based non-banking financial company (NBFC) focused on lending to micro, small, medium enterprise (MSME), on Thursday announced that it has raised Rs 350 crore through a Series E investment with participation from new investor Kedaara Capital and others. The Series E round saw participation from existing investors Norwest Venture Partners (NVP), Lok Capital Growth Fund and from the family of P Surendra Pai, an anchor investor. This round also saw the exit of the one of the earliest investors Sarva Capital.
The company proposes to use the additional capital to further penetrate into existing markets to augment the capital required by MSMEs for business expansion, working capital and for asset creation backed by transformative technology, robust credit appraisal systems and quality customer service.
Promoted in 2015 by D Arulmany, Veritas Finance has created a loan book of Rs 1,308 crore as February 29, 2020, with a customer base of 48,638 across eight states and one union territory with 201 branches backed by 1,840 employees.
D Arulmany, MD & CEO, Veritas Finance, said, “Choosing to focus on the needs of the enterprises in the MSME segment, we had drawn a vision map for Veritas with three distinct phases of growth, when we commenced the business in October 2015. Reaching a loan book of `1,000 crore in the first four years of operations was the first milestone of the vision map.”
He further said that having successfully crossed the phase I of the vision map, the company is now embarking on an even more exciting journey into phase II.
“While our existing investors Caspian and CDC Group continue to stay invested, other existing investors namely Lok Capital, NVP and PS Pai’s family are participating now, and we are also privileged to have Kedaara Capital, which has a flawless record of building best in class institutions, partnering with us. We are excited to partner with it and are confident that its support and guidance would help Veritas Finance navigate the challenges of phase II growth effectively,” he said.
Nishant Sharma, co-founder and partner of Kedaara Capital, and Parin Mehta, MD of Kedaara Capital, said, “MSME lending is a large underserved market requiring specialised risk management capabilities and we believe Veritas is well equipped to realise the market potential. Given our experience across diverse market leading retail lenders, we look forward to supporting Veritas in this journey.”
Shiv Chaudhary, MD of Norwest Venture Partners, India, said, “Providing financial services to small businesses in India is an important investment theme for Norwest India given the significant market opportunity. MSMEs are truly the engines of India’s economic growth and key enablers for employment generation at the grass root level. We have been delighted with our partnership with Veritas over the last 15 months and are excited to double our investment in Veritas Finance by allocating an additional Rs 200 crore in this round.”