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Revenue-based financing platform Velocity has launched a Rs 300 crore growth-focused fixed-term credit capital fund dedicated to B2B software-as-a-service (SaaS) businesses.

Through the fund, Velocity will offer a fixed-term credit product, specifically designed to provide SaaS businesses with financing amounting to 3X to 6X their monthly recurring revenue. The offering has a repayment structure spread over 12 months.

SaaS businesses require substantial investments in sales and marketing efforts to draw in customers, with the breakeven usually occurring within 6-18 months. “This period underscores the need for flexible and understanding capital solutions that can bridge this gap,” said Abhiroop Medhekar, Founder and CEO of Velocity.

“Our financing is designed to support these unique requirements, ensuring that SaaS enterprises have the necessary resources to innovate, market effectively, and scale with efficiency,” Medhkar added.

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Saas startups are here to stay

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Founded in 2020 by Abhiroop Medhekar, Atul Khichariya, and Saurav Swaroop, Velocity is a lending-tech company providing products to solve companies’ fixed-term credit, revenue-based financing, revenue-based overdraft, and credit line needs. In 2023, Velocity disbursed over Rs 400 crore, which it said was greater than its total disbursements over the last three years combined.

It focuses on high-growth D2C brands and ecommerce businesses. Some of the funded brands in the portfolio comprise French Crown, Chumbak, IDC Kitchen, etc.

Selected companies will receive growth capital without the need to dilute their equity, the company said in a statement, which will enable them to scale operations, accelerate product development, and expand their market reach.

In 2024, Velocity plans to double its ecommerce disbursements to Rs 800 crore and allocate an additional Rs 500 crore to new sectors, including B2B SaaS.

In November 2021, it had raised $20 million in Series A funding led by Peter Thiel’s Valar Ventures.