The Hindu Business Line : Citigroup sanctions $1.5 m loan to Secova

CHENNAI: In its first venture lending globally, Citigroup has sanctioned a $1.5 million loan (Rs 6.5 crore) to Chennai-based HR BPO Secova eServices to assist the start-up company to fund its expansion plans.

The funding, through Citigroup India's corporate investment bank division, is structured as a three-year term loan with an additional pledge of stock warrants, Mr Ajay Hattangadi, Vice-President, Citigroup Venture India, told PTI.

"This is the first formal approach to venture lending by Citigroup globally. It is part of our SME strategy to identify good quality start-up companies and fund their growth," he said.

The venture lending was a better option for good quality small companies compared to the painful cost of diluting their holdings in a typical venture capital funding, he explained.

Elaborating the concept of venture lending, Mr Sanjay Nayar, Citigroup's country officer for India said, "Citigroup recognises the challenges facing entrepreneurs associated with early-stage businesses. Our venture lending proposition is intended to prov ide funding to promising growth companies like Secova, enabling them to get the financial cushion they need to stay focused on the business."

Mr Venkat Tadanki, co-founder and CEO of Secova eServices, said the funding would help the company continue its pioneering work in the HR BPO space. "We grew by 70 per cent over the last one year period. We are looking to maintain the same pace in the co ming years as well," he said. - PTI

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