Veritas Finance Pvt. Ltd has raised Rs 350 crore ($46 million at current exchange rates) in its Series E round of funding led by existing investor Norwest Venture Partners.
Private equity firm Kedaara Capital came in as the new investor in the round, the non-banking finance company said in a statement.
Existing investors Lok Capital Growth Fund and the family of P Surendra Pai, an angel investor, also participated in the round.
The Chennai-based firm said it will use the funds to penetrate deeper into existing markets. It will also use the funding for working capital, asset creation, and for credit appraisal systems and customer service.
Shiv Chaudhary, managing director at Norwest India, said that the firm is doubling its investment in Veritas by allocating Rs 200 crore in this round. The multi-stage investment firm had, in November 2018, led a Series D investment of Rs 200 crore in Veritas.
D Arulmany, MD and CEO at Veritas Finance, said the firm had drawn a vision map with three distinct phases of growth after commencing the business in October 2015.
It reached a loan book of Rs 1,000 crore in the first four years of operations and is looking at a bigger milestone in its second phase of growth, he said.
Arulmany said that the firm’s existing investors Caspian and CDC Group Plc continue to stay invested. He also said that Kedaara's support would help Veritas in its next phase of growth.
Kedaara co-founder Nishant Sharma and managing director Parin Mehta said that MSME lending is a large underserved market that requires specialised risk management capabilities and that Veritas is well equipped to realise the market potential.
Spark Capital acted as the exclusive financial advisor to Veritas Finance.
Veritas Finance was founded in November 2015 by Arulmany. In March 2016, the firm had raised Rs 30 crore in a Series A round of funding led by Sarva Capital LLC.
It focuses on lending to micro, small and medium enterprises. The company had a loan book of Rs 1,308 crore as on February 29. It had a customer base of 48,638 across eight states and one union territory. It had 201 branches and 1,840 employees at the end of February.