Updated January 10th, 2024 at 18:46 IST

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

The 2020-founded company allows financing without equity dilution.

Reported by: Business Desk
Edited by: Rajat Mishra
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Enabling enterprises: Financing platform Velocity has launched a growth capital fund worth Rs 300 crore for Business to Business (B2B) Software-as-a-Service players.

Notably, the Indian SaaS industry is expected to reach around $26 billion revenue by 2026, garnering the interest of investors in 2024.

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The company said has partnerships with leading NBFC’s and regulated entities in the country, and offers fixed term credit for SaaS businesses with financing proportional to three to six times the amount of their monthly recurring revenue. This will enable companies to receive funds without diluting equity.

SaaS businesses require substantial investments in sales and marketing efforts to draw in customers, with the breakeven usually occurring within 6-18 months. The repayment structure for companies is thereby spread over 12 months to suit the financial cycles SaaS enterprises, Medhekar added.

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“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.

The 2020-founded company disbursed Rs 400 crore in investments in 2023, and has options like fixed-term credit, revenue-based financing, revenue-based overdrafts, and credit lines.

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Velocity plans to double its e-commerce disbursements to 800 crore in 2024, allocating additional Rs 500 crore to new sectors including B2B SaaS.

Started by Abhiroop Medhekar, Atul Khichariya, and Saurav Swaroop, the company has a client portfolio crossing 2000 investments in the past three years since its launch.

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Brands funded by the company include Chumbak and IDC Kitchen among others, and partnerships with 26 players in the B2B ecosystem.

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Published January 10th, 2024 at 18:46 IST