Bengaluru, Mar 24 (IANS): Fintech startup Velocity on Wednesday announced it has raised $10.3 million (a little over Rs 74 crore) in seed funding led by Valar Ventures, a US-based VC firm backed by billionaire investor Peter Thiel.

Velocity facilitates revenue-based financing up to Rs 2 crore with zero equity dilution or personal guarantees.

Revenue-based financing is a new flexible alternative to venture capital or bank debt, wherein repayments happen as a fixed percentage of future revenues.

According to the company, this is Valar Venture's first investment in an Indian startup, which will be utilised for ramping up its customer base and for building world-class financing products.

"I strongly felt the need to reimagine financing products for new-age businesses. Incumbents fall short of the speed, efficiency and flexibility expected by today's entrepreneurs. We want to change that," said Abhiroop Medhekar, Co-founder and CEO at Velocity.

The company, launched in early 2020 by IIT Bombay graduates, Medhekar, Atul Khichariya and Saurav Swaroop, said that any business with digitally trackable revenues can just share access to their online data and get funded within a week.

Velocity is currently focused on the fast-growing segment of online marketplace merchants and direct-to-consumer (D2C) businesses in India.

Over 300 online businesses have signed up for Velocity's revenue-based financing.

"We believe the Velocity team will empower thousands of entrepreneurs in India and we are excited to be partners with them in that," said James Fitzgerald, a founding partner at Valar Ventures.

Thiel is the co-founder of PayPal, Palantir Technologies and Founders Fund, and was the first outside investor in Facebook.