
Multiples leads $145m round for India's Veritas Finance

Veritas Finance, an Indian non-banking finance company (NBFC) that issues loans to micro, small and medium-sized enterprises (MSMEs), has raised INR 12bn (USD 145m) in funding led by Multiples Alternate Asset Management.
Multiples and co-investors such as the International Finance Corporation (IFC) contributed INR 10.5bn. The balance came from Avendus Future Leaders Fund, an Avendus Capital-managed vehicle that focuses on emerging market leaders. The round included INR 4bn in new equity. The rest comprises existing shares, with the likes of British International Investment (BII) and Lok Capital making partial exits.
Lok and Caspian Capital Partners were the first investors in Veritas, contributing INR 300m in 2016, according to AVCJ Research. Lok re-upped in a USD 18.6m round in 2017. This was led by BII, which put in USD 10m. Norwest Venture Partners led the next two rounds – INR 2bn in 2018 and INR 3.5bn in 2020 – with participation from BII and Kedaara Capital.
In 2021, Norwest and Kedaara were joined by Caspian Capital Partners, Evolvence India, and Growth Catalyst Partners in a INR 60bn round.
Founded in 2015 by D. Arulmany, Veritas provides short-term loans for working capital, medium-term loans for business expansion and housing loans. The goal is to increase access to credit for MSMEs that fail to get adequate financial support from India’s heavily regulated banks. Veritas claims there are more than 60m MSMEs that collectively ensure employment for a majority of the country’s population.
The Chennai-headquartered company initially focused on Tamil Nadu but has since expanded its coverage to eight states and one union territory with 285 branches serving more than 115,000 customers. Assets under management were INR 35bn as of March. It provides small business loans with an average ticket of INR 500,000.
“Veritas’ in-depth understanding of micro-SME businesses across different geographies combined with strong frameworks has enabled it to build a large, diversified franchise. Arulmany, along with the top-notch management team has scaled the business while maintaining pristine quality,” said Nithya Easwaran, a managing director at Multiples, in a statement.
Multiples reached a first close of USD 640m on its fourth India-focused fund earlier this year. It is looking to raise USD 1bn. IFC intends to commit USD 60m to the vehicle. Previous investments in the NBFC space include leading a INR 8.7bn round for Kogta Financial in 2022. Kogta specialises in used car finance and lending to micro businesses.
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