Indian revenue-based financing startup Velocity has raised $20m in a Series A funding round led by US venture capital firm Valar Ventures.
Other investors who joined the round include Presight Capital, Utsav Somani’s iSeed, Maninder Gulati (Oyo), Zac Prince (BlockFi), and Philippe De Mota (Hedosophia).
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Founded in early 2020, Velocity has established itself as an alternative to venture capital and traditional bank debt for online firms in India.
The fintech claims to have onboarded over 1500 direct to consumer and e-commerce clients for revenue-based financing and processed 250+ investments across 175 companies.
Velocity will use the proceeds to offer nearly $134m in financing to 1000+ e-commerce companies.
It has raised $30m in funding to date along with multiple debt lines with several NBFCs to scale its platform.
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By GlobalDataVelocity co-founder and CEO Abhiroop Medhekar said: “Our vision is to build the future of business financing in India. We are glad to partner with high-conviction investors like Valar since our early days.
“They have re-affirmed their belief in Velocity by doubling down and leading our Series A. We are already India’s largest revenue-based financier and keen to use this funding to build multiple world-class products for thousands of new-age businesses.”
Valar Ventures Andrew McCormack said: “Since our last investment, Velocity has grown 10X and secured the lead position in this fast-growing market. Despite this exponential growth, their portfolio quality remains strong.
“We were impressed by their strong customer orientation, tech-product DNA, and ambitious growth plans. We are excited to support their bold vision of empowering thousands of entrepreneurs in India.”
It offers up to INR30m in financing after evaluating an online business across 50+ parameters.
Velocity charges a fixed fee of 4-8% on the financed sum and the repayments happen as a share of the company’s online revenues.
