Investment

Velocity Allocates ₹400 Crore to Fuel Festive Season Ecommerce Surge

• ByStartupStory     |    August 26, 2024

fintech startup Velocity has announced the allocation of ₹400 crore to support the financing needs of Direct-to-Consumer (D2C) and e-commerce brands. This significant allocation comes as part of the company’s efforts to help brands gear up for the busiest sales period of the year, spanning October and November.

Festive season sales traditionally contribute to 40-50% of annual sales for online brands, making this period crucial for revenue generation. Velocity’s 2024 allocation marks a notable increase of over 60% compared to the ₹250 crore earmarked in 2023, underscoring the industry’s expectations for a robust festive season this year.

“Brands see up to 1.5X-2X jump in their sales during the festive months. Typically the months between September, October, November and December are the top sales periods. They need to build up their inventory and align their marketing plans,” said Abhiroop Medhekar, Founder and CEO of Velocity, in a conversation with The Times of India.

In addition to traditional e-commerce platforms, quick commerce is expected to play a significant role in the 2024 festive season. Medhekar highlighted the impact of quick commerce, stating, “For brands listed on quick commerce platforms, we’re observing a significant sales boost of 20-30%.”

Velocity’s financing model focuses on cash flow-based debt financing, allowing brands to invest in inventory, marketing, and operational expenses without the need to dilute equity. The company works with brands that sell on major e-commerce platforms like Amazon, Flipkart, Myntra, and Shopify, as well as quick commerce platforms such as Blinkit, Instamart, and Zepto.

The 2024 festive season is anticipated to see a 20% growth in e-commerce sales, according to a Redseer report, building on the 13% growth in e-commerce gross merchandise value (GMV) recorded last year. Invest India forecasts that India’s e-commerce sector will attract 500 million shoppers and reach $325 billion by 2030.

Founded in 2020 by Abhiroop Medhekar, Atul Khichariya, and Saurav Swaroop, Velocity has successfully financed ₹1,000 crore across 2,000 deals to date. “In 2023, we had deployed around ₹400 crore. This year, we are on track to double that to around ₹800 crore,” Medhekar shared with The Times of India. The average ticket size of these deals currently stands at around ₹50 lakh.

Velocity’s portfolio in the e-commerce space includes well-known brands such as Chumbak, Koskii, Power Gummies, Bella Vita Organic, and Blaupunkt.

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