FinTech Start-up Velocity raises $10.3m from Peter Thiel’s Valar Ventures

By Leandra Monteiro

Bengaluru-based FinTech start up, Velocity, has raised a total of $10.3 million in seed funding led by Valar Ventures, a US-based VC firm backed by PayPal co-founder Peter Thiel. This is Valar Venture’s first investment in an Indian start up.

According to the FinTech, the funds will be utilised for ramping up its customer base, as well as building on its products. Velocity is currently focusing on the fast-growing segment of online marketplace merchants and direct-to-consumer businesses in India. This segment is thriving as the shift from offline to online retail got accelerated due to the COVID crisis.

Launched a year ago, Velocity provides revenue-based financing up to $280,000 with zero equity dilution or personal guarantees. Revenue-based financing is a new alternative to venture capital or bank debt, wherein repayments happen as a fixed percentage of future revenues.

The start-up was launched by IIT Bombay graduates, Abhiroop Medhekar, Atul Khichariya and Saurav Swaroop. According to the company, it funds millions of marketing and inventory spends for its customers every month, with no collection delays or stress in its portfolio so far.

“Having been a VC and a founder myself, I strongly felt the need to reimagine financing products for new age businesses. Incumbents fall short on the speed, efficiency and flexibility expected by today’s entrepreneurs. We want to change that. We are thrilled to have Valar Ventures support our audacious vision of building the future of business financing in India,” said Abhiroop Medhekar, Co-founder and CEO at Velocity, according to media reports.

Commenting on the Velocity and the India opportunity, James Fitzgerald, a founding partner at Valar Ventures, said, “As one of the fastest growing economies in the world, India’s digital ecosystem is at an inflection point. We have been impressed with Velocity’s strong customer orientation and aggressive plans to build innovative financing solutions. We believe the Velocity team will empower thousands of entrepreneurs in India and we are excited to be partners with them in that.”

Valar Ventures is a venture capital fund based in the United States, founded by Andrew McCormack, James Fitzgerald and Peter Thiel. The firm is known for investing in fast-growing fintech companies.