Introduction
Velocity is a revenue-based financing platform based in Bengaluru, India. Founded in 2017, Velocity provides alternative finance options to small and medium-sized enterprises (SMEs) using a data-driven approach. The company offers flexible financing options that are based on the revenue forecasts of the SMEs that they invest in.
History and Overview
Velocity was founded in 2017 by Anurag Srivastava and Parameswar V. Initially, Velocity started as a small-scale pilot program with a small number of investors and partners. However, in 2018, the company raised $2.5 million in seed funding from a group of investors, including Y Combinator.
Velocity’s business model is simple – they provide revenue-based financing to SMEs. Unlike traditional lenders, Velocity does not require collateral from companies. Instead, they calculate the amount of financing a company can receive based on their future revenue forecasts. Velocity’s innovative approach has attracted investors and partners across the world.
Investors and Funding
Velocity has received funding from some of the most well-known investors in the industry. In addition to Y Combinator, the company has received funding from the likes of Venture Highway, EMVC, Better Capital, and several other top tier VCs.
In 2021, Velocity further cemented its position by raising more than $30 million in a Series A funding round. The funds are intended to help Velocity expand its operations across multiple geographies.
Performance
Velocity has witnessed tremendous growth since its inception. The company has grown from a small-scale pilot program to a global revenue-based financing platform that has helped numerous SMEs finance their operations.
In 2019, Velocity participated in the Y Combinator Demo Day and was named as one of the top startups to watch in the fintech industry. The company’s cutting-edge technology and commitment to supporting SMEs have helped to set them apart from other lenders in the industry.
Layoffs
Like many other companies in the world, Velocity was hit hard by the COVID-19 pandemic. The pandemic caused a decline in the number of SMEs that were able to take on financing.
In September 2023, Velocity announced that it would be laying off 22 of its employees, which represent approximately 14% of its workforce. The layoffs are a result of the impact that the pandemic has had on Velocity’s operations. The company stated that it was necessary to right-size the organization to ensure that they could continue to provide much-needed funding to SMEs.
Statement from Velocity’s Stakeholders
In a statement released following the announcement of the layoffs, Velocity CEO Anurag Srivastava stated, “These are challenging times for our industry, and we have seen the impact of the pandemic on our operations. We are deeply saddened to say goodbye to members of our team, but we are hopeful that this restructuring will help us get back to a place of stability where we can continue to help SMEs get access to the funding they need to succeed.”
Conclusion
In summary, Velocity is a fintech company that has been committed to providing revenue-based financing to small and medium-sized enterprises. Despite the challenges that have come with the COVID-19 pandemic, Velocity has remained dedicated to helping SMEs access the funding they need to grow. While the recent layoffs are regrettable, the company remains optimistic about its future and is committed to its mission of helping SMEs thrive.
