Velocity launches 300 crore growth capital fund for Indian B2B SaaS companies

Ready for some exciting news? We’ve just earmarked debt capital of ₹300 crores to supercharge the growth of emerging Indian SaaS business! Keep reading to know more.

The Indian SaaS industry is on an impressive growth trajectory, expected to reach around $26 billion in revenue by 2026. Velocity’s fund is perfectly aligned with this growth, offering customized financial solutions to meet the dynamic requirements of modern businesses. Velocity has partnerships with India’s leading NBFC’s and regulated entities.

Velocity’s offering of a fixed term credit product, is specifically designed to provide SaaS businesses with financing proportional to 3 to 6 times the amount of their monthly recurring revenue. This innovative approach ensures that the capital offered is directly correlated with the revenue strength of the company, providing a sustainable and balanced financial solution for growing businesses. 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.

“SaaS enterprises encounter distinctive hurdles in their expansion, mainly concerning the costs associated with customer acquisition. These companies must allocate significant funds towards Sales and Marketing to attract customers, with the breakeven point for such investments typically falling between 6 to 18 months. Particularly for firms on a high growth trajectory, this results in negative cash flows due to ongoing investments. 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.

Founded in 2020, by Abhiroop Medhekar, Atul Khichariya, and Saurav Swaroop, Velocity’s expanded financing suite now encompasses fixed-term credit, revenue-based financing, revenue-based overdrafts, and credit lines. In 2023, Velocity significantly outperformed its previous records, disbursing over 400 crore – a sum greater than its total disbursements over the last three years combined to high growth D2C brands and e-commerce businesses. This milestone underscores the company’s robust growth trajectory and its commitment to diversifying financial solutions.

“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. The repayment structure, spread over 12 months, is straightforward and suited to the unique financial rhythms of SaaS enterprises,” said Medhekar.

Akash Goel, Co-Founder & CEO of Atica Global, a B2B SaaS company specializing in last-mile sales and revenue management for the hotel industry, said “Our partnership with Velocity has been instrumental in providing us with immediate access to growth capital tailored to our specific needs. The team truly understood the challenges of growing B2B SaaS firms and provided flexibility in their funding terms. This collaboration has enabled us to invest in several B2B marketing and customer acquisition strategies to expand in the US. Moreover, the process right from the initial discussion to the final offer was all-digital and seamless, saving significant time compared to traditional growth options that are often manual and offline.
The company’s client portfolio has crossed a significant milestone, having crossed 2000 lifetime investments with 500 exclusive brands funded in 2023 which include French Crown, Iconic Fashion, Soulflower, Chumbak, IDC Kitchen, Off Duty, Itsy Bitsy, Bear House, and Zlade. Velocity’s partnerships with 26 ecosystem players, including four of the largest marketplaces, are a testament to its commitment to creating a robust support system for its clients.

With this strategic fund allocation, Velocity is set to propel the growth of promising SaaS companies, marking a new era of financial innovation and business support. In 2024, Velocity plans to double its e-commerce disbursements to 800 crore and allocate an additional 500 crore to new sectors including B2B SaaS.

Abhiroop Medhekar, Co-Founder & CEO, Velocity at an Interview with CNBC

The following links highlight the comprehensive coverage of Velocity’s initiatives, particularly its recent launch of a ₹300 crore growth capital fund for supporting B2B SaaS startups. Gain insights from respected news sources on Velocity’s strategic moves in the fintech industry:

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