Fintech Startup Velocity raises $10.3 Mn in Seed Round as Valar Ventures makes First India bet

Valar Ventures makes first India bet

Bengaluru-based fintech startup, Velocity has raised $10.3 million in seed funding led by Valar Ventures, a US-based VC firm backed by Peter Thiel. This was the first investment made by Valar Ventures in an Indian startup. The round has also seen participation from existing investors Mato Peric and Tom Stafford from DST Global alongside the new investors Presight Capital, Utsav Somani’s iSeed, Oliver Jung from LAO Holdings, Robert Frohwein of Kabbage, Dhruv Arora of Syfe and Erik Podzuweit & Florian Prucker from Scalable Capital.

Velocity plans to use new funds to scale its customer base and to create financial instruments for the market. Post the funding round, Velocity announced the launch of its digital marketing focused corporate credit card in partnership with SBM Bank and Visa.

Velocity was founded by Abhiroop Medhekar, Atul Khichariya and Saurav Swaroop who believed that the banking sector & investors are not able to meet the financial requirements of SMBs. The trio had adopted the model of Revenue-based credit disbursement for online businesses. 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. Currently, Velocity provides Revenue-based credit up to Rs 2 crore that could be repaid from the revenues further generated by the business at a certain fixed fee slab. Velocity takes about a week to disburse the credit and mostly concentrates on D2C and online businesses who can share access to their online & revenue data.

Abhiroop Medhekar, Co-founder and CEO of Velocity, said, “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. We have the capability to understand the various data points of online businesses and extract the relevant financial information to feed into our credit model to provide the money.” 

Online businesses usually spend 30% of their revenues on digital marketing. But, a significant number of founders use a personal credit card for these activities, only resulting in the company’s imbalances. Over 300 businesses have subscribed to Velocity’s revenue-based credit. Velocity has been providing crores of money as credit for marketing & inventory expenses of these businesses, with no stress in collecting back.

“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,” said James Fitzgerald, founding partner, Velar Ventures speaking on the firm’s first Indian investment & opportunities in India.

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  • Online Team Asia Tech is a team of Journalists, Entrepreneurs, and Enthusiast Writers who contribute to the platform by bringing everyday stories, updates, opinions and insights from the Asian Startup Ecosystem.

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