India e-commerce industry financier raises $20m

Presight Capital and iSeed Fund also participated, as did individual investors associated with the likes of Oyo, BlockFi, and UK-based VC investor Hedosophia. It brings total equity raised to date to $30 million, including a $10 million seed round earlier this year provided by Valar, Presight, and iSeed.

Velocity aims to offer revenue-based financing as a credible alternative to venture capital and traditional bank debt for e-commerce businesses in India. The idea is to use online businesses’ data for evaluations that could lead to financing up to INR30 million ($400,000) as fast as within five days. Repayment terms are designed to be flexible, linked to the businesses’ online revenues.

This model requires no collateral, personal guarantee, or equity dilution, and includes a fixed fee of 4-8% on the deployed capital. The company says that some brands that have raised capital with the service have grown their revenues by 1.5x within 6 months of funding and that 78% of these brands have become repeat customers of Velocity.

Velocity has made more than 250 investments across 175 companies to date. The goal is to deploy INR10 billion to more than 1,000 e-commerce companies. About 1,500 direct-to-consumer and e-commerce businesses have applied to the platform.

“Since our last investment, Velocity has grown 10X and secured the lead position in this fast-growing market,” Andrew McCormack, a general partner at Valar, said in a statement. “Despite this exponential growth, their portfolio quality remains strong. We were impressed by their strong customer orientation, tech-product DNA, and ambitious growth plans.”

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• Topics
• South Asia
• Financials
• Early-stage
• India
• Valar Ventures
• Financial Services
• NBFCs
• e-commerce