Cash flow-based financing platform Velocity announced on Monday the launch of a $48 million (Rs 400 crore) fund to support the financing needs of D2C and e-commerce brands in the upcoming festive season.
The cash flow-based financing platform earmarked Rs 250 crore last year for D2C brands—marking a 60% increase this year.
The fund will support the financing needs of brands and sellers on major e-commerce platforms such as Amazon, Flipkart, Myntra and Shopify, and new-age quick commerce platforms like Blinkit, Instamart and Zepto The sellers can use the funds to enhance their product assortment, accelerate delivery timelines, and capitalise on emerging trends such as premiumisation, Velocity said in a statement.
“As more Indian consumers turn to online shopping for convenience and personalised experiences, 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. This is an exciting time, as innovation and customer-centric strategies are driving the e-commerce and quick commerce boom,” said Abhiroop Medhekar, co-founder and CEO of Velocity.
Festive season sales are a crucial period for digital-first brands, accounting for about 40-50% of their annual sales, the company said. Quick commerce has also emerged as an important sales channel for brands, driving 15-30% of sales depending on category.
According to a RedSeer report, e-commerce sales are projected to see 20% growth in the 2024 festive season as compared to 13% growth in e-commerce GMV (gross merchandise value) last year.
Over the last four years, Velocity claims to have leveraged its partnerships with Indian NBFCs and regulated entities to empower over 1,500 e-commerce brands like Koskii, Power Gummies, Hammer, Bella Vita Organic, Bewakoof, Bunaai, Leaf, Crossbeats, Blaupunkt, Zlade, and Soulflower among others.
Velocity claims to have disbursed over ₹900 crore, enabling over 1,500 businesses, especially D2C and e-commerce companies, to overcome working capital challenges. Several brands have already raised funds from Velocity to help bolster their growth in the 2024 festive season, per the statement.
The Bengaluru-based fintech had earlier raised $30 million in equity funding led by Peter Thiel’s Valar Ventures. Its portfolio includes D2C brands like Soulflower, Chumbak, and Off Duty.
