Revenue-based financing platform Velocity on Wednesday (January 10) said it has earmarked INR 300 Cr ($36.1 Mn) to offer financing to B2B software-as-a-service (SaaS) startups.
Under this, it will offer fixed-term credit up to 3X to 6X of a startup’s monthly recurring revenue.
According to the financing platform, the fresh capital aligns with the growth in the Indian SaaS market’s revenue to around $26 Bn by 2026.
Founded by Abhiroop Medhekar, Atul Khichariya and Saurav Swaroop in 2020, Velocity offers revenue-based financing to Indian direct-to-consumer (D2C) and ecommerce platforms. Besides this, the startup also offers these businesses credit cards and payment solutions.
The startup claims to have allocated more than INR 400 Cr to 500 D2C brands and ecommerce startups, including French Crown, Iconic Fashion, Soulflower, Chumbak, IDC Kitchen, Off Duty, Itsy Bitsy, Bear House and Zlade in 2023. It aims to double its ecommerce disbursements to INR 800 Cr and allocate INR 500 Cr to emerging sectors, including B2B SaaS.
It has raised $30 Mn in total since its inception.
“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 are offering financing that is directly proportional to their monthly recurring revenue, thus aligning the capital amount closely with the business’s revenue,” said Medhekar.
Last year the startup also underwent a restructuring exercise to avoid redundancies and for sustainable future growth. As part of this exercise, it laid off about 14% of its workforce. It reported a standalone net loss of INR 7.9 Cr in FY22, a 32X jump from INR 24 Lakh in FY21. Total revenue rose 2.3X to INR 5 Cr from INR 2.2 Cr in FY21.
Velocity competes with the likes of revenue-based financing startups – GetVantage, Klub and Recur Club.
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