Velocity Launches Rs 300 Crore Growth Capital Fund For Indian B2B SaaS companies

Data-driven financial solution provider, Velocity has announced a 300-crore growth capital fund to back the next wave of B2B software-as-a-service (SaaS) businesses in India. 

The company offers customised financial solutions to meet the requirements of modern businesses. Velocity has partnerships with India’s leading NBFCs and regulated entities.  

Velocity's offering of a fixed-term credit product is specifically designed to provide SaaS businesses with financing proportional to 3 to 6 times the amount of their monthly recurring revenue. This innovative approach ensures that the capital offered is directly correlated with the revenue strength of the company, providing a sustainable and balanced financial solution for growing businesses. The company claims. 
 
"SaaS enterprises encounter distinctive hurdles in their expansion, mainly concerning the costs associated with customer acquisition. These companies must allocate significant funds towards Sales and Marketing to attract customers, with the breakeven point for such investments typically falling between 6 to 18 months. Particularly for firms on a high growth trajectory, this results in negative cash flows due to ongoing investments. This period underscores the need for flexible and understanding capital solutions that can bridge this gap. Our financing is designed to support these unique requirements, ensuring that SaaS enterprises have the necessary resources to innovate, market effectively, and scale with efficiency,” said Abhiroop Medhekar, founder and CEO of Velocity. 

Founded in 2020, by Abhiroop Medhekar, Atul Khichariya, and Saurav Swaroop, the company has expanded its financing suite now encompasses fixed-term credit, revenue-based financing, revenue-based overdrafts, and credit lines, it added in a statement.  
 
“Our focus revolves around deeply understanding the revenue dynamics of SaaS businesses and the goal is not just to finance businesses but to empower them to thrive in a competitive marketplace.  We offer financing directly proportional to their monthly recurring revenue, thus aligning the capital amount closely with the business's revenue.  The repayment structure, spread over 12 months, is straightforward and suited to the unique financial rhythms of SaaS enterprises," said Medhekar. 
 
In 2024, the company is planning to double its e-commerce disbursements to 800 crore and allocate an additional 500 crore to new sectors including B2B SaaS, it said. 
   
Founded in 2020 by Abhiroop Medhekar, Atul Khichariya, and Saurav Swaroop, Velocity's financing suite includes various financing products such as fixed-term credit, revenue-based financing, overdrafts, and credit lines. The Bengaluru-based fintech works with 4,000+ brands and has disbursed over Rs 700 Crore. 

Velocity has partnerships with 26 ecosystem players, including four of the largest marketplaces. Velocity has raised $30 million in funding so far led by Peter Thiel’s Valar Ventures. Its portfolio includes many of India’s fastest-growing D2C brands such as French Crown, Soulflower, Chumbak, Off Duty, Itsy Bitsy, Bear House, and Zlade to name a few.