Velocity, the dynamic revenue-based financing platform, has committed a substantial corpus of INR 300 Crore ($36.1 Mn) to fuel the growth of B2B Software-as-a-Service (SaaS) startups. This strategic move involves extending fixed-term credit ranging from 3X to 6X of a startup’s monthly recurring revenue, providing a tailored financial lifeline to businesses in the evolving SaaS landscape.
Founded in 2020 by Abhiroop Medhekar, Atul Khichariya, and Saurav Swaroop, Velocity initially focused on offering revenue-based financing to Indian direct-to-consumer (D2C) and e-commerce platforms. The platform goes beyond financing, extending its services to include credit cards and payment solutions for businesses.
In the course of 2023, Velocity claims to have allocated over INR 400 Crore to support 500 D2C brands and e-commerce startups. Notable beneficiaries include French Crown, Iconic Fashion, Soulflower, Chumbak, IDC Kitchen, Off Duty, Itsy Bitsy, Bear House, and Zlade. Looking ahead, the company envisions doubling its e-commerce disbursements to INR 800 Crore while dedicating INR 500 Crore to emerging sectors, particularly B2B SaaS.
Having raised a total of $30 Mn since its inception, Velocity emphasizes a strategic understanding of the revenue dynamics within the SaaS realm. Abhiroop Medhekar, Co-founder, highlights the platform’s commitment to not merely providing financing but empowering businesses to flourish in a competitive marketplace. The financing model aligns capital closely with a business’s monthly recurring revenue, fostering a symbiotic relationship between capital infusion and revenue growth.
However, it’s noteworthy that Velocity underwent a restructuring exercise in the previous year to ensure sustainability and mitigate redundancies. This initiative led to a workforce reduction of approximately 14%. In terms of financials, the platform reported a standalone net loss of INR 7.9 Crore in FY22, witnessing a 32X surge from INR 24 Lakh in FY21. Meanwhile, total revenue experienced a substantial 2.3X increase, reaching INR 5 Crore from INR 2.2 Crore in FY21.
Velocity operates in a competitive landscape, contending with other revenue-based financing startups such as GetVantage, Klub, and Recur Club.
