News

Velocity Allocates ₹200 Crore for Working Capital Needs of Restaurants and Cloud Kitchens

• ByStartupStory     |    December 19, 2024

Indian fintech startup Velocity has announced a ₹200 crore fund to support restaurants and cloud kitchens operating on food delivery platforms like Zomato and Swiggy. Scheduled to roll out in 2025, the initiative aims to provide cash-flow-based financing to food and beverage (F&B) brands seeking to expand operations, purchase equipment, or invest in marketing.

Highlighting the growth opportunities in India’s F&B sector, Atul Khichariya, Co-founder and COO of Velocity, said, “The growing appetite of Indian consumers for diverse culinary experiences, combined with the convenience of online food delivery, is driving remarkable growth in the food and beverage sector.” He added that rising disposable incomes and evolving dining preferences are fueling expansion, while premiumisation trends underscore consumers’ willingness to spend on high-quality dining experiences.

Since its inception in 2020, Velocity has funded notable F&B brands such as IDC Kitchen, Smoor, Daily Sushi, Brahma Brew Works, Milano Ice Cream, Imperio, Amore Gelato, Jamie’s Pizza, and Babas Chicken. The company’s cash-flow-based financing model offers an alternative to traditional funding sources like banks and non-banking financial companies (NBFCs), which many F&B brands struggle to access.

“F&B brands often struggle to secure financing from traditional sources like banks and NBFCs. Recognizing this gap, Velocity offers cash-flow-based financing, enabling restaurants and cloud kitchens to effectively manage capital expenditure, working capital, open new outlets, purchase equipment, and launch sub-brands under existing ones without impacting operational profits,” the company said in a statement.

The Indian F&B sector is undergoing a significant transformation driven by quick commerce, cloud kitchens, and ultra-fast delivery options. Companies like Zepto, Swiggy Instamart, and Blinkit have pioneered 10-minute delivery services through initiatives like Zepto Cafe, Bolt, and Bistro. Meanwhile, competitors such as Bigbasket and magicpin are enhancing their offerings to capture this market, with newcomers like Swish and Zing also entering the fray.

“This shift to ultra-fast delivery is redefining convenience for consumers, pushing F&B brands to adapt swiftly,” Velocity stated. “To stay competitive, F&B brands are embracing technologies to better understand consumer behavior, standardize processes, and are investing in automation and machinery. As India’s F&B sector evolves rapidly, Velocity’s ₹200 crore fund is designed to support new-age innovators in the space.”

Follow Startup Story