Veritas Finance will use the funding for product innovation, expansion to newer states like Andhra Pradesh and Telangana, and deepen its presence in existing states
Veritas Finance Private Limited, a Chennai-based financial services firm that lends to micro and small enterprises, today announced it had raised Series B funding of Rs 120 crore from Lok Capital and CDC Group.
CDC Group invested Rs 65 crore, while existing investors Surendra Pai and his wife also participated in the round.
This fresh round of funding will bolster product innovation, expansion to newer states like Andhra Pradesh and Telangana, and deepen Veritas’ presence in existing states and Union Territories.
Veritas had raised its first institutional funding in April 2016 from Lok Fund II (Sarva Capital) and Caspian Impact Investment Adviser.
Veritas Finance registered with the RBI as a non-banking finance company in 2015, and lends to micro and small enterprises, helping them move away from the informal lending system.
Arulmany, the Founder of Veritas Finance said, “As a specialised lender in the MSME segment, we are constantly looking at product innovation and building superior credit assessment methods. Through this round of funding, besides expansion, we will also strengthen our technology play which will, in turn, help us achieve higher productivity and bring down the cost of servicing micro-businesses.”
Talking about leading the Series B investment in Veritas, Nikhil Balaraman, South Asia Director at CDC India Advisors said, “Our investment in Veritas underlines our commitment to back companies with a strong development impact philosophy and business models that support financial inclusion for India’s disadvantaged."
He added, "Financial services for the MSME space in India is a huge area, but is also hugely under-served. The team from Veritas stands out for its dedication and experience and we’re committed to help them reach ever more challenging geographies, giving their customers the financial tools and advice to prosper.”
Venky Natarajan, Co-founder and Partner, Lok Capital said, “Lok has witnessed the journey of Veritas from being an idea in 2015 to reaching more than 12,000 customers today. During this time, our confidence in the senior team’s execution abilities has grown immensely. The company’s undiluted focus on the target segment, clear focus on credit quality, excellent traction in garnering debt lines, demonstrated product innovation, have strengthened our belief that the company will emerge as a player worthy of emulation in the SME lending space.”
This round of funding from Lok Capital, counts investments from its Fund II – Sarva Capital, and Fund III – Lok Capital Growth Fund.
Earlier this year, SME lending startup Lendingkart Finance Limited had raised $10 million (Rs 67 crore) debt from Kotak Mahindra Bank, Aditya Birla Financial Services and other financial institutions.
Bengaluru-based Capital Float raised $45 million (Rs 293 crore) in Series-C funding, in a round led by Silicon Valley-based Ribbit Capital, along with participation from existing investors SAIF Partners, Sequoia India and Creation Investments.