Fintech startup Velocity has raised $10.3 million in seed funding led by Peter Thiel-backed Valar Ventures, a US-based VC firm that specializes in funding early-stage fintech. The Bengaluru-based revenue finance player will utilize the funds to ramp up its customer base and expand its product suites to enterprise customers, the company said in a statement. Revenue financing is a form of debt where the credit is underwritten based on future guaranteed income.

Velocity facilitates such loans up to Rs 2 crore without collateral. Repayments typically happen as a fixed percentage of future revenues. “With Velocity, any business with digitally trackable revenues can just share access to their online data and get funded within a week,” according to the company. The seed round marks Valar Venture’s first investment in an Indian startup. The VC firm, founded by Andrew McCormack, James Fitzgerald, and Peter Thiel, is known to have invested in fintech companies such as Xero, Wise, BlockFi, N26, Qonto, Stash, and others.

“As one of the fastest-growing economies in the world, India’s digital ecosystem is at an inflection point,” Fitzgerald, a founding partner at Valar Ventures, said. “We have been impressed with Velocity’s strong customer orientation and aggressive plans to build innovative financing solutions.”

Velocity has signed up 300 online businesses for its revenue-based financing and is currently focused on the online marketplace merchants and direct-to-consumer (D2C) businesses in India, the company added. Velocity was founded in early 2020 by IIT-Bombay graduates Abhiroop Medhekar, Atul Khichariya, and Saurav Swaroop. “Incumbents fall short on the speed, efficiency, and flexibility expected by today’s entrepreneurs. We are thrilled to have Valar Ventures support our audacious vision of building the future of business financing in India,” Medhekar, the CEO of Velocity said.