Homegrown fintech platform Velocity announced a Rs 400 crore fund to support direct-to-consumer (D2C) and e-commerce brands as India prepares for the upcoming festive season. The new fund marks a 60% increase from the Rs 250 crore allocated last year.

Velocity’s Co-Founder and CEO, Abhiroop Medhekar, highlighted the growing shift towards e-commerce in India, with the market projected to become the world’s third-largest online marketplace, reaching $325 billion and attracting 500 million shoppers by 2030. The debt financing provided by Velocity aims to help D2C and e-commerce brands scale their operations, optimize inventory, and implement effective marketing strategies during the crucial festive period, which typically accounts for 40-50% of annual sales for digital-first brands.

The financing will benefit sellers on major e-commerce platforms and quick commerce platforms like Blinkit, Instamart, and Zepto, which now contribute 15-30% of sales in certain categories. According to a RedSeer report, e-commerce sales are expected to grow by 20% during the 2024 festive season, up from the 13% growth in gross merchandise value (GMV) recorded last year.

Since its founding in 2020 by Medhekar, Atul Khichariya, and Saurav Swaroop, Bengaluru-based Velocity has disbursed over Rs 900 crore, empowering more than 1,500 businesses, primarily D2C and e-commerce companies. The company has built strong partnerships with leading NBFCs and regulated entities in India, allowing it to support brands during peak demand seasons.

In addition to working closely with major e-commerce marketplaces, Velocity is collaborating with ecosystem enablers to ensure smooth operations during the festive rush. The company has also raised $30 million in equity funding led by Peter Thiel’s Valar Ventures, which has further bolstered its capacity to fuel growth for Indian businesses.