Bengaluru: Velocity, an indigenous financial platform, announced a Rs 400 crore fund on Monday. This fund, one of the largest in the country’s fintech sector, is aimed at supporting direct-to-consumer (D2C) and e-commerce enterprises as the country prepares for the festive season.
Last year, the cash flow-based finance platform set aside Rs 250 crore for direct-to-consumer firms, which has increased by 60% this year.
“We are witnessing a significant shift towards e-commerce, with projections estimating that India will be the world’s third-largest online market, reaching $325 billion and attracting 500 million shoppers by 2030,” said Abhiroop Medhekar, Co-founder and CEO of Velocity, expressing optimism about the future of e-commerce in India.
He explained that Velocity’s debt financing, which can be used for inventory management, technology upgrades, and marketing campaigns, is intended to help D2C and e-commerce firms scale their operations, optimise inventories, and implement efficient marketing strategies.
Festive season sales are critical for digital-first firms, accounting for 40-50 percent of total annual revenues.
The funding will benefit brands and sellers on big e-commerce platforms and newer rapid commerce platforms like Blinkit, Instamart, and Zepto.
Quick commerce has evolved as a key sales channel for brands, accounting for 15-30% of revenues depending on the category.
According to a RedSeer analysis, e-commerce sales are expected to expand by 20% during the 2024 holiday season, compared to a 13% increase in e-commerce GMV (gross merchandise value) last year.
Over the last four years, Velocity has partnered with India’s largest NBFCs and regulated companies to empower over 1,500 e-commerce businesses. This mission has inspired several firms to raise financing from Velocity to support their growth throughout the 2024 holiday season.
Velocity stated it is actively collaborating with the top e-commerce marketplaces and several ecosystem enablers to serve the forthcoming festive demand across industries.
Velocity, founded in 2020 by Medhekar, Atul Khichariya, and Saurav Swaroop, has successfully funded over Rs 900 crore to over 1,500 enterprises, with a focus on D2C and e-commerce.
The Bengaluru-based fintech company, led by Peter Thiel’s Valar Ventures, has raised $30 million in equity capital.
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–IANS
