In a strategic move to empower B2B software-as-a-service (SaaS) startups, the revenue-based financing platform, Velocity, has unveiled a dedicated Rs 300 crore growth-focused fixed-term credit capital fund. The initiative aims to fuel the expansion of SaaS businesses by offering a tailored fixed-term credit product, providing financing ranging from 3X to 6X of their monthly recurring revenue. The repayment structure spans over 12 months, acknowledging the unique financial needs of SaaS enterprises.
Bridging the Innovation Gap
SaaS companies often face the challenge of significant investments in sales and marketing endeavors to attract customers, with the breakeven point typically occurring within 6 to 18 months. Recognizing this crucial period, Abhiroop Medhekar, the Founder and CEO of Velocity, emphasized the necessity for flexible and understanding capital solutions. “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 Medhekar.
Velocity’s Impressive Track Record
Founded in 2020 by Abhiroop Medhekar, Atul Khichariya, and Saurav Swaroop, Velocity has emerged as a leading lending-tech company addressing fixed-term credit needs, revenue-based financing, revenue-based overdraft, and credit line requirements. In 2023, the platform disbursed over Rs 400 crore, surpassing its total disbursements over the past three years combined. Velocity primarily focuses on high-growth direct-to-consumer (D2C) brands and ecommerce businesses.
Empowering Startups Without Equity Dilution
Velocity’s funding model aims to empower startups without diluting their equity, providing selected companies with growth capital. This approach enables them to scale operations, accelerate product development, and expand their market reach. Notable brands in Velocity’s portfolio include French Crown, Chumbak, IDC Kitchen, and others.
Ambitious Plans for 2024
In line with its commitment to fostering growth, Velocity plans to double its ecommerce disbursements to Rs 800 crore in 2024. Additionally, the platform aims to allocate an additional Rs 500 crore to new sectors, with a particular focus on B2B SaaS. This expansion aligns with Velocity’s vision to diversify its portfolio and support a broader range of innovative businesses.
Significant Series A Funding and Investor Confidence
Velocity’s strategic vision has garnered significant support from investors, including a notable $20 million in Series A funding in November 2021. This funding round was led by Peter Thiel’s Valar Ventures, underscoring the platform’s credibility and potential in the fintech landscape.
In summary, Velocity’s Rs 300 crore growth-focused fund marks a pivotal moment in the evolution of financial support for B2B SaaS startups. By addressing the specific financial challenges faced by these enterprises, Velocity aims to contribute to the thriving ecosystem of innovation and technological advancement.
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