Financial platform Velocity allocates Rs 400 million to fuel festive growth for digital brands and ET Retail

<p>Velocity Founders – Abhiroop Medhekar, Atul Khichariya and Saurav Swaroop </p>
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New Delhi: Anticipating a significant increase in demand during the festive season, debt finance startup Velocity has earmarked Rs 400 crore to support digital brands with their inventory, marketing and operational expenses. The allocation is a 60 per cent increase from the Rs 250 crore it spent during the previous festive season, according to Abhiroop Medhekar, co-founder and CEO, Velocity.

Medhekar highlighted the criticality of the festive season for digital brands, noting that it typically accounts for 40-50 percent of their annual sales. “These businesses require significant funding for marketing and inventory management during this period, and our financing solutions enable them to do so without diluting equity,” he said.

He added that the company has also partnered with e-commerce platforms to offer financing to brands selling on those platforms.

According to a report by RedSeer, e-commerce sales are expected to grow by 20% during the festive season in 2024, while e-commerce GMV grew by 13% last year.

In terms of categories, Medhekar said fashion, beauty and personal care brands are aggressively using debt financing, especially ahead of the festive season. Additionally, home improvement brands, including home décor and kitchens, were also key applicants for financing.

Velocity claims to have backed around 150 startups, including PowerGummies, Soulflower, Aachho, French Crown, Smoor, Furlenco and others. The company works with brands that have a minimum monthly revenue of Rs 40-50 lakh. The startup operates on a 48-hour loan disbursement model and charges a flat fee of 6-10 percent of the transaction size.

Published on 26 Aug 2024 at 07:41 AM IST

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