How Much Did Velocity Raise? Funding & Key Investors

Velocity has successfully raised $20 million in Series A funding, with additional seed funding of $10.3 million led by Valar Ventures. The platform offers a range of services including revenue-based financing, term loans, and AI-powered tools to support the growth of eCommerce brands in India.

Keep reading to explore the intricacies of Velocity's fundraising journey and the investors backing this innovative platform.

What Is Velocity?

Velocity, founded in 2020, is a prominent eCommerce enabler and fintech company based in Bengaluru, Karnataka, India. The company specializes in providing financial solutions to digital-first businesses, including revenue-based financing, term loans, and AI-powered tools.

With an employee count ranging from 101 to 250, Velocity has quickly established itself as a leader in the financial services sector. The company is dedicated to empowering eCommerce brands with innovative products and services, aiming to build the future of banking for new-age businesses in India.

How Much Funding Has Velocity Raised?

1. Seed Round
   • Amount Raised: USD 10,300,000
   • Date: March 2021
   • Lead Investors: Valar Ventures
   • Valuation at Round: Not publicly disclosed
   • Motivation Behind the Round: To support the initial growth and establishment of revenue-based financing as a credible alternative for e-commerce businesses in India.
2. Series A
   • Amount Raised: USD 20,000,000
   • Date: November 2021
   • Lead Investors: Valar Ventures
   • Valuation at Round: Not publicly disclosed
   • Motivation Behind the Round: To build multiple world-class products for thousands of new-age businesses and to deploy over Rs 1,000 crore towards more than 1,000 e-commerce businesses.

Total Amount Raised: USD 30,300,000. Current Valuation: Not publicly disclosed.

Key Investors

• Valar Ventures
  • Details: Valar Ventures is a US-based venture capital firm founded by Peter Thiel. It has led both the seed and Series A funding rounds for Velocity.
  • Investment Focus Areas: Fintech, technology startups, innovative financial solutions.
  • Notable Investments: TransferWise, N26, Xero.
• Presight Capital
  • Details: Presight Capital is a global venture capital firm that participated in Velocity's Series A round. The firm focuses on technology-driven companies.
  • Investment Focus Areas: Technology, healthcare, consumer sectors.
  • Notable Investments: Not publicly disclosed.
• Utsav Somani’s iSeed
  • Details: Utsav Somani is the head of AngelList India and runs the iSeed fund, which focuses on early-stage startups in India.
  • Investment Focus Areas: Early-stage startups in India.
  • Notable Investments: Not publicly disclosed.
• Maninder Gulati (Oyo)
  • Details: Maninder Gulati is the Chief Strategy Officer at Oyo, a well-known hospitality chain. He has invested in Velocity's Series A round.
  • Investment Focus Areas: Hospitality, technology, startups.
  • Notable Investments: Not publicly disclosed.
• Zac Prince (BlockFi)
  • Details: Zac Prince is the CEO of BlockFi, a crypto-financial services company. He participated in Velocity's Series A funding round.
  • Investment Focus Areas: Cryptocurrency, fintech, financial services.
  • Notable Investments: Not publicly disclosed.

What's Next for Velocity?

Velocity is poised to seize significant opportunities in the eCommerce and direct-to-consumer sectors. With plans to deploy over $134 million to more than 1,000 businesses in the next year, the company aims to expand its offerings beyond revenue-based financing. This includes introducing multiple financing products and enhancing its analytics toolkit, Velocity Insights, to provide actionable insights to businesses.

Future fundraising opportunities appear promising as Velocity continues to grow its customer base and product offerings. The company is likely to attract additional equity rounds and secure more debt lines with NBFCs, bolstered by the strong support from existing investors like Valar Ventures.

However, challenges lie ahead. Velocity must manage the risks associated with revenue-based financing, especially if partner businesses' revenues decline. Competition from other alternative financing platforms and traditional lenders also poses a threat. Ensuring the quality of its portfolio while scaling rapidly will be crucial for sustained success.

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