Financial solutions provider Velocity on January 10 announced setting up a debt fund of Rs 300 crore to invest in Business-to-Business (B2B) Software-as-a-Service (SaaS) startups in India, at a time when investors are betting big on the segment.
"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.
Velocity's new fund will offer a fixed-term credit product specifically designed to provide SaaS businesses with financing proportional to three to six times the amount of their monthly recurring revenue, the firm said in a statement.
"Selected companies will receive growth capital without the need to dilute their equity, thus enabling them to scale operations, accelerate product development, and expand their market reach," The firm said in a media statement.
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 claims to work with 4,000 brands and has disbursed Rs 700 crores of credit. In 2023, Velocity disbursing over Rs 400 crore of loans offering credit D2C brands and e-commerce businesses.
Velocity has around 500 brands funded in 2023 which include French Crown, Iconic Fashion, Soulflower, Chumbak, IDC Kitchen, Off Duty, Itsy Bitsy, Bear House, and Zlade.
The firm plans to double down on e-commerce disbursements.
"Velocity plans to double its e-commerce disbursements to Rs 800 crore and allocate an additional 500 crore to new sectors including B2B SaaS," the firm's statement said.
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