India: Veritas Finance lands $49m funding from Kedaara, Norwest, others

Photo: Reuters

Chennai-based small business lender Veritas Finance Thursday announced that it has raised about $48.7 million (Rs 350 crore) in Series E funding from new investor Kedaara Capital, along with the existing investors including Norwest Venture Partners (NVP), Lok Capital Growth Fund and the family of anchor investor P Surendra Pai.

Veritas intends to use the corpus to further penetrate into existing markets to augment the capital needs of MSMEs.

“In a diverse nation like ours with disparate cultures, environment and opportunities, the significant role that informal micro-enterprises play in building the economy can never be ignored and their vital contribution has been recognized by everyone. However, several reasons, starting from their unorganized nature of these enterprises, their size, location, banking habits etc., have hindered them in accessing debt and they continue to face challenges,” D. Arulmany, MD & CEO, Veritas Finance said.

Promoted in 2015 by Arulmany, Veritas Finance is a non-banking financial company (NBFC) focused on MSMEs. It has created a loan book of Rs.1,308 crores as on 29 February 20 with a customer base of 48,638 across eight states and one union territory, the statement added.

According to the industry experts, India is home to more than 60 million MSMEs who contribute to 45% of the exports and it forms the highest share of the employment sector in India, contributing around 69% to it.

“MSME lending is a largely underserved market requiring specialized risk management capabilities and we believe Veritas is well equipped to realize the market potential,” Nishant Sharma, co-founder and partner of Kedaara Capital, and Parin Mehta, managing director of Kedaara Capital said.

Other players operating in the space include IndoStar Capital Finance, Vistaar Financial Services, Indifi, Lendingkart, Aye Finance, LoanTap, AU Financiers, and Satya Micro Capital.

According to a recent disclosure, Dutch development bank FMO is considering extending a $30 million loan to Indian microfinance company Vistaar Finance Services. In January, venture capital firm A91 Partners invested about $20 million in small-business lender Aye Finance through a secondary sale of shares.

Last August, Lendingkart Technologies raised $30 million led by existing investors, including Fullerton Financial Holdings Pte Ltd, Bertelsmann India Investments and venture capital firm India Quotient.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.