Peter Thiel’s Valar Ventures invests in tech startup Velocity

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Chennai: Income-based funding startup Velocity.in has raised $ 20 million in Series A funding led by Valar Ventures of Peter Thiel, a Silicon Valley-based venture capital firm.
Velocity has implemented income-based financing as an alternative to venture capital and traditional bank debt for e-commerce businesses in India. The company has more than Rs 1200 crore in fundable income connected to its platform and has already processed more than 250 investments in 175 companies.
The round brings Velocity’s total fundraising to $ 30.3 million, as it raised around $ 10.3 million in the round earlier this year. The startup aims to roll out Rs. 1,000 crore to more than 1,000 e-commerce companies supported by the new funds.
Velocity leverages this numerical data to evaluate an application on over 50 parameters and expand up to Rs. 3 Crore of funding within 5 days. Velocity does not take any guarantees, personal guarantees or dilution of equity and only charges a fixed commission of 4 to 8% on the capital deployed. As refunds are directly tied to a company’s revenue, Velocity has a skin in the game to support revenue growth for the companies in its portfolio.
Co-founder Abhiroop Medhekar said that an angel investor in the company previously put them in touch with Peter Thiel and Valar Ventures and the company then took a small position in their seed cycle and kept in touch with the company’s progress since then. “Valar Ventures is a high conviction investor and they move very quickly if they believe in the opportunity. For this reason, just as we were kicking off our Series A fundraising process, Valar offered to lead the company. whole cycle instead, ”Medheker said.
While increased internet penetration and widespread use of digital payments have led to growth in order volume on D2C websites, out of the 75,000+ independent e-commerce businesses built on Shopify and WooCommerce in India, less than 0.5% raised equity, depending on speed.
“If you’re generating healthy income, you don’t need to dilute your equity, especially for repeatable, low-risk expenses like marketing and inventory. Revenue-based financing offers a much faster, more flexible, and no-dilution alternative to continuing to grow your business, ”notes Medheker.

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