What does Velocity offer?
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Velocity facilitates financing in India for e-commerce businesses (eCommerce, Restaurants, EdTech, B2B SaaS) against a fixed fee of 5-8%. Unlike traditional financing options like VCs and Banks, our capital comes without any equity dilution, collateral or personal guarantees. Repayments are made either as a percentage of revenues or as a fixed monthly repayment, and you can raise anywhere between Rs. 5 lakhs to 3 crores depending upon your business's performance and requirements.
Here is an example on how financing works. Let's assume Company A raises Rs 40 Lakhs from Velocity at a 6% fixed fee. Your repayment can be structured as follows:
Revenue Based Financing: With a 10% revenue share, Company A would keep sharing 10% of its future revenue with Velocity till it pays back a total of Rs 42.4 lakhs (Rs. 40 lakhs + 6%*40 lakhs)
Term Loan: In case of a term loan, Company A would pay back a total of Rs 42.4 lakhs (Rs. 40 lakhs + 6%*40 lakhs), through EMI payments over 6, 9 or 12 months.
It's that simple! No other interest component, no processing fee. Nothing else.
How does Velocity's Growth Capital differ from other financing options?
Traditional financing options are broken.
Banks typically provide loans against collateral and seek personal guarantees, have long turnaround time and look for multiple years of profitability. Raising money from VCs is even more time consuming and results in equity dilution which in turn reduces control of your business.
Velocity offers a fast, flexible and non-dilutive alternative source of growth capital. With Velocity’s growth capital, you can grow your business at your own terms without losing any equity.
Is Velocity's funding a substitute for Venture Capital? How is Velocity different from Venture Capital?
We believe that for many businesses, venture capital is not the best way to fund their growth. VCs look for really large markets and an exponential growth trajectory, factors which may not hold true for a vast majority of businesses. Velocity offers a great alternative to founders that are building a healthy, profitable business and at the same want to retain control of their business.
Even for businesses that do raise VC money, we believe equity capital should not be spent on repeatable, ROI linked spends such as digital marketing and working capital. Such businesses can raise financing via Velocity and significantly reduce dilution by 30-40% in every VC round.
