Multi-stage private investment firm Norwest Venture Partners has led a Series D investment of Rs 200 crore (around $27 million at current exchange rates) in Veritas Finance Pvt. Ltd, a non-banking financial company (NBFC) which lends to micro, small and medium enterprises (MSMEs).
While Silicon Valley-based Norwest has come in as a new investor, Veritas Finance said in a statement that existing investors had also participated. These include British development finance institution CDC Group Plc and P Surendra Pai, former executive chairman of the Murugappa Group.
Chennai-headquartered Veritas, which has a presence in seven states, proposes to use the additional capital to deepen its presence in existing markets to augment the capital required by MSMEs for business expansion, working capital and asset creation.
“Through this round of funding, besides expansion, we will also strengthen our technology which will help us achieve higher productivity and bring down the cost of servicing micro-businesses,” said Arulmany D, managing director and chief executive officer of Veritas Finance.
Promoted in 2015 by Arulmany, Veritas Finance has a loan book of Rs 500 crore and a customer base of more than 21,000 spread across 132 branches.
“Veritas Finance is uniquely positioned to drive growth and provide financial services to micro, small and medium enterprises in India,” said Sumer Juneja, director at Norwest Venture Partners.
Avendus Capital served as the exclusive financial adviser to Veritas Finance for the deal.
In April this year, Veritas Finance had raised Rs 60 crore in a Series C round from CDC, impact investment firm Lok Capital and Pai.
In December last year, the company had raised Rs 120 crore ($18.6 million) in a Series B round led by CDC Group Plc.
Existing investors Lok Capital and the husband-wife duo of Surendra Pai and Savita Pai had participated in that round, which also included funding from Lok Capital.
Earlier this week, Norwest had topped up its investment in another NBFC, Ess Kay Fincorp Ltd. Global investor TPG Growth led the investment of $42 million (Rs 311 crore) in Ess Kay Fincorp as existing investor Evolvence India also contributed.
Norwest Venture Partners
Based in Silicon Valley, Norwest is a multi-stage venture capital firm that invests in technology, business services, consumer and healthcare firms. It is currently deploying funds from its $1.5 billion global pool of capital raised in February.
Norwest is stage-agnostic and backs firms from seed and Series A to late-stage venture and private equity stages.
It has been on an exit spree of sorts in the last couple of years, selling its entire stake in at least half a dozen Indian companies.
In May, Norwest sold a part of its stake in the National Stock Exchange (NSE), recovering almost the entire principal amount it had invested roughly nine years ago.
A couple of months later, it invested in Guwahati-based Kishlay Foods Pvt. Ltd as the snacks maker raised Rs 100 crore ($15 million).