Peter Thiel-backed VC firm leads $10.3m seed round in Indian fintech firm

Bengaluru-based Velocity said it has raised US$10.3 million in seed funding in a round led by Valar Ventures, a US-based VC firm backed by Peter Thiel.

Other participating investors were tech entrepreneur and investor Mato Peric, DST Global’s Tom Stafford, Presight Capital, Utsav Somani’s iSeed, Oliver Jung from LAO Holdings, Kabbage CEO and co-founder Robert Frohwein, Syfe founder Dhruv Arora, and Scalable Capital founders Erik Podzuweit and Florian Prucker.

Velocity co-founders (from left) Atul Khichariya, Abhiroop Medhekar, and Saurav Swaroop / Photo credit: Velocity

Launched in 2020, Velocity provides revenue-based financing of up to US$280,000 with zero equity dilution or personal guarantees. This presents businesses an alternative to venture capital or bank debt, as Velocity’s format allows it to receive a fixed percentage of future revenues as repayment.

With its platform, businesses with digitally trackable revenues can share access to their online data and get funded within a week, according to the fintech firm.

It is currently focused on online marketplace merchants and direct-to-consumer (D2C) businesses in India, which are booming since the pandemic accelerated the shift from offline to online retail.

Velocity claims that over 300 online businesses have signed up for its revenue-based financing.

It also announced the launch of its digital marketing-focused Visa corporate credit cards in partnership with SBM Bank.

With the new fund, the company said it will ramp up its customer base and build its financing products.

Velocity was founded by Abhiroop Medhekar, Atul Khichariya, and Saurav Swaroop. The trio previously worked in Taskbob, a managed marketplace for home services. Medhekar had also served as an executive at Elevation Capital (formerly SAIF Partners) and McKinsey.