Venture capitalists lent their support to another alternative lender, this time in India.
Reports on Monday (March 28) said Veritas Finance, based in India, secured Series A funding led by Sarva Capital. The funding amounted to about $4.7 million, reports said, adding that Veritas plans to use the backing to diversify its products and expand.
According to the startup, its SME lending services are looking to fill a significant gap in demand for working capital; Veritas claims that 97 percent of the debt gap hits micro- and small-sized businesses in the country.
The company already has 12 branches in the country and, over the next few months, said it will look to add an additional 23. It currently has 200 corporate customers, and with new funding, Veritas will aim for 5,000 clients by next year.
India’s venture capitalists have largely focused on the nation’s logistics sector when it comes to funding B2B startups. B2B eCommerce has also seen some popularity among investors, with Amadeus Capital leading a Series C funding round for the nation’s IndiaMART this month.
When it comes to alternative lending, however, venture capital has not been has prevalent. Authorities have looked to ways to help improve SMEs’ access to capital by alternative and traditional means in recent months.
Last year, Indian authorities announced plans to explore regulations for the alternative small business lending industry. The Securities and Exchange Board of India introduced the Alternative Capital Raising Platform initiative, an effort that looks to encourage SMEs to remain in India instead of going abroad to raise funds.