Velocity raises $10.3 million in funding led by Peter Thiel’s Valar Ventures
The Bengaluru-based fintech startup said that it would use the funds to ramp up its customer base and building better quality finance products.
Velocity, a Bengaluru-based fintech startup, on Wednesday announced it had raised a total of $10.3 million in seed funding led by Valar Ventures, a US-based VC firm backed by Peter Thiel. The startup pointed out that it was Valar Ventures' first investment in an Indian startup.
Other investors who participated in Velocity's seed rounds include founding investors Mato Peric and Tom Stafford (DST Global) as well as Presight Capital, Utsav Somani's iSeed, Oliver Jung (LAO Holdings), Robert Frohwein (Kabbage), Dhruv Arora (Syfe) and Erik Podzuweit & Florian Prucker (Scalable Capital).
The startup said it would use the capital to ramp up its customer base and build better quality finance products. Velocity was launched in early 2020 by IIT Bombay graduates Abhiroop Medhekar, Atul Khichariya and Saurav Swaroop. The startup currently focuses on the online marketplace and direct-to-consumer businesses in India. It said that more than 300 online firms had signed up for Velocity's revenue-based financing.
The company said it facilitates revenue-based financing up to ₹2 crore ($280K) with zero equity dilution or personal guarantees.
“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. With Velocity, any business with digitally trackable revenues can just share access to their online data and get funded within a week,” it said.
With this funding, Velocity also announced the launch of its digital marketing focused Visa corporate credit cards in partnership with SBM Bank.
“Online businesses spend up to 30% of their revenues on digital marketing but primarily end up using a personal credit card for this. Velocity aims to provide the best corporate credit card for the digital marketing use case, which allows online businesses to “put their marketing on autopilot,” the company said in a release.
Fintech is one of the fastest-growing tech sectors in the country. According to a recent KPMG report, India had attracted about $2.7 billion in fintech investment in 2020. The payment was the most popular category followed by Insurtech and Wealthtech.