Chennai-based fintech startup, Veritas Finance, has raised $4.5 Mn (INR 30 Cr) in Series A round of funding led by Sarva Capital and others including Caspian Impact Investment Adviser, reported ET.
Veritas Finance was founded by Arulmany Duraisamy in 2015. It is a non-banking finance company, registered with RBI and is focused on meeting the financial requirements of the micro small medium enterprises. It mainly caters to the working capital and business credit requirements of the small businesses in the MSME sector.
The startup counts DBS Bank, Axis Bank, HDFC Bank, State Bank of India, as its bankers. Veritas, has developed a unique credit assessment methodology to reach out to MSMEs which relies heavily on self assessment, expenses and lifestyle correlation, asset creation tendencies, family background, exhaustive reference checks among others.
The startup will use the newly raised capital for expansion as well as increasing the range of financial products and services, besides using a sizable amount of the capital for disbursing loans.
According to founder D Arulmany, “Micro and small businesses segment account for the largest share of the credit demand gap; 97% of the debt gap is from micro and small enterprises out of the estimated debt gap of INR 29.3 lakh Crore.”
He said that their typical customers would be small and micro entrepreneurs like a tea stall owner, bakery owner, small restaurants and provision stores. Such individuals have monthly salary of INR 25,000-60,000 and they will be extended loans of up to INR 4 lakh on average for use as working capital, business expansion and asset creation.
Earlier this month, another Fintech startup Wealthy secured about $240K from angel investors including Abhishek Goyal of Tracxn Labs, Zishaan Hayath of Toppr among others.
Prior to this in January, Gurgaon-based Power2SME, a ‘Buying Club’ for SMEs in India, raised an undisclosed amount of funding from Infosys co-founder Nandan Nilekani and existing venture capital (VC) funds – Accel Partners, Kalaari Capital and Inventus Capital. Other startups working towards empowering SMEs include Tolexo, AskMeFin, Exclusife among others.
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