Velocity, a leading cash flow-based financing platform, has allocated ₹400 crore funds to support D2C and e-commerce brands in preparation for the upcoming festive season. This allocation represents a 60% increase from the ₹250 crore earmarked by Velocity in 2023.
Festive season sales are critical for digital-first brands, contributing approximately 40-50% of their annual sales. The new capital will help these brands invest in inventory, marketing, and operational expenses without diluting their equity. This type of debt financing is particularly valuable for managing seasonal peaks.
“As more Indian consumers turn to online shopping for its 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,” Abhiroop Medhekar, Co-Founder & CEO of Velocity, said.
“Velocity’s debt financing is specifically designed to empower D2C and E-commerce brands to scale their operations, optimise inventory, and implement effective marketing strategies. By providing the financial support they need, we’re excited to support the growth journey of several brands as they prepare to capitalise on the festive season demand and e-commerce growth,” Medhekar, added.
The funds will be available to brands on major e-commerce platforms such as Amazon, Flipkart, Myntra, and Shopify, as well as quick commerce platforms like Blinkit, Instamart, and Zepto to enhance their product assortment, accelerating delivery timelines, and capitalising on emerging trends such as premiumization. This year, quick commerce has emerged as an important sales channel for brands, driving 15-30% of sales depending on category.
Velocity’s financing aims to support brands in enhancing their product assortment and delivery timelines and to capitalise on emerging trends like premiumisation. According to a RedSeer report, e-commerce sales are expected to grow by 20% during the 2024 festive season, up from a 13% increase in the previous year.
Velocity has consistently been a financier of digital-first brands, supporting the growth and success of many D2C companies. Over the last four years, Velocity has leveraged its partnerships with India’s leading NBFCs and regulated entities to empower over 1500 e-commerce brands like Koskii, Power Gummies, Hammer, Bella Vita Organic, Bewakoof, Bunaai, Leaf, Crossbeats, Blaupunkt, Zlade, and Soulflower among others.
Several brands have already raised funds from Velocity to help bolster their growth in the 2024 festive season.
Founded in 2020, the platform has disbursed over ₹900 crores and has raised $30 million in equity funding led by Peter Thiel’s Valar Ventures. Its portfolio includes many of India’s fastest-growing D2C brands like Soulflower, Chumbak, and Off Duty. Velocity partners with major marketplaces and ecosystem players to offer innovative financing solutions.
