Velocity Launches Rs 300 Cr Fund for Indian B2B SaaS Growth

Velocity has declared a Growth Capital Fund amounting to Rs 300 crore to support the advancement of B2B software-as-a-service (SaaS) firms in India. The indigenous fintech startup aims to offer a fixed-term credit product designed specifically for SaaS businesses, providing financing equivalent to three to six times their monthly recurring revenue. The capital injection is intended to empower selected companies to expand their operations, hasten product development, and broaden their market presence without the necessity of equity dilution.

Abhiroop Medhekar, Founder and CEO of Velocity, highlighted the distinctive challenges faced by SaaS enterprises during expansion, particularly the significant costs associated with customer acquisition. He emphasized the need for these companies to allocate substantial funds towards Sales and Marketing efforts, with the breakeven point typically spanning six to 18 months.

In 2023, Velocity demonstrated remarkable performance by disbursing over Rs 400 crore, surpassing its total disbursements of the previous three years combined. This substantial sum was directed towards high-growth Direct-to-Consumer (D2C) brands and e-commerce businesses.

Medhekar explained that the financing offered by Velocity is directly proportionate to the monthly recurring revenue of SaaS enterprises, ensuring alignment with their business revenue. The repayment structure, spanning 12 months, is designed to suit the unique financial rhythms of SaaS entities.

Looking ahead to 2024, Velocity plans to double its e-commerce disbursements to Rs 800 crore and allocate an additional Rs 500 crore to new sectors, including B2B SaaS. Founded in 2020 in Bengaluru by Abhiroop Medhekar, Atul Khichariya, and Saurav Swaroop, Velocity aims to further contribute to the growth and development of businesses in the Indian fintech landscape.