New Delhi: In anticipation of a significant surge in festive season demand, debt financing startup Velocity has set aside Rs 400 crore to support digital-first brands with their inventory, marketing, and operational expenses. This allocation marks a 60 per cent increase from the Rs 250 crore deployed during the previous festive season, according to Abhiroop Medhekar, co-founder and CEO of Velocity.
Medhekar emphasized the critical role of the festive season for digital-first brands, noting that it typically accounts for 40-50 per cent of their annual sales. “These companies need substantial funding for marketing and inventory management during this period, and our financing solutions enable them to do so without diluting equity,” he stated.
He added that the company has also partnered with e-commerce platforms to offer funding to brands selling on these platforms.
According to a RedSeer report, e-commerce sales are projected to see 20 per cent growth in the 2024 festive season as compared to 13 per cent growth in e-commerce GMV last year.
In terms of categories, Medhekar said that fashion, beauty, and personal care brands have been aggressively leveraging debt funding, especially ahead of the festive season. Additionally, home improvement brands, including home decor and kitchen, have also been key applicants for funding.
Velocity claims to have backed about 150 startups, including PowerGummies, Soulflower, Aachho, French Crown, Smoor, Furlenco, and more. The company works with brands that operate at a minimum monthly revenue of Rs 40 – 50 lakh. The startup operates on a 48-hour loan disbursal model and charges a fixed fee between 6-10 per cent of the transaction size.
