Velocity Raises $10.3 Mn In Seed Round Led By Valar Ventures
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Bengaluru-based fintech startup Velocity on Wednesday announced that it has raised a total of $10.3 million in a Seed funding round led by US-based venture capital (VC) firm Valar Ventures, backed by Peter Thiel. This marks Valar Venture’s first investment in an Indian startup.
Other investors who participated in Velocity’s Seed rounds include founding investors Mato Peric and Tom Stafford (DST Global) as well as Presight Capital, iSeed, Oliver Jung (LAO Holdings), Robert Frohwein (Kabbage), Dhruv Arora (Syfe), and Erik Podzuweit and Florian Prucker (Scalable Capital).
The funds will be utilized by the company for ramping up its customer base and for building world-class financing products for the businesses of tomorrow.
“As one of the fastest-growing economies in the world, India’s digital ecosystem is at an inflection point. We have been impressed with Velocity’s strong customer orientation and aggressive plans to build innovative financing solutions. We believe the Velocity team will empower thousands of entrepreneurs in India and we are excited to be partners with them in that,” said James Fitzgerald, founding partner, Valar Ventures, while talking about Velocity and the India opportunity.
Velocity facilitates revenue-based financing up to INR 2 crore with zero equity dilution or personal guarantees. Revenue-based financing is a new, more flexible alternative to venture capital or bank debt, wherein repayments happen as a fixed percentage of future revenues. With Velocity, any business with digitally trackable revenues can just share access to their online data and get funded within a week.
Velocity is currently focused on the fast-growing segment of online marketplace merchants and direct-to-consumer (D2C) businesses in India. This segment is booming as the shift from offline to online retail got accelerated post COVID. Over 300 online businesses have signed up for Velocity’s revenue-based financing. Velocity already funds crores of marketing and inventory spends for its customers every month, with no collection delays or stress in its portfolio so far.
“Having been a VC and a founder myself, I strongly felt the need to reimagine financing products for new-age businesses. Incumbents fall short of the speed, efficiency, and flexibility expected by today’s entrepreneurs. We want to change that. We are thrilled to have Valar Ventures support our audacious vision of building the future of business financing in India,” added Abhiroop Medhekar, co-founder and chief executive officer, Velocity.
With this funding, Velocity also announced the launch of its digital marketing-focused Visa corporate credit cards in partnership with SBM Bank. Online businesses spend up to 30 per cent of their revenues on digital marketing but primarily end up using a personal credit card for this. It aims to provide the best corporate credit card for the digital marketing use case, which allows online businesses to put their marketing on autopilot.