Introduction
Velocity, a cash-flow-based financing platform in India, has launched a ₹200 crore fund for 2025, aimed at empowering restaurants and cloud kitchens. The initiative addresses critical financial barriers faced by food and beverage (F&B) businesses, enabling them to expand operations, enhance infrastructure, and introduce innovative sub-brands.
Challenges in the F&B Sector
1. Access to Capital: Many F&B businesses struggle to secure financing from traditional banks due to limited collateral and fluctuating cash flows.
2. Operational Constraints: Managing capital expenditures, working capital, and equipment purchases without affecting profitability poses significant challenges.
3. Market Competition: Rising consumer demand for diverse cuisines and online food delivery has intensified competition, requiring constant innovation and scalability.
Solution: Velocity’s Cash-Flow-Based Financing
Velocity’s fund offers flexible financing solutions, enabling F&B brands to:
Open new outlets.Purchase equipment and upgrade infrastructure.
Scale operations without impacting operational profitability.
Launch sub-brands and expand their market presence.
Implementation
1. Targeted Support: Velocity identified key F&B players, including restaurants and cloud kitchens operating through platforms like Zomato and Swiggy.
2. Flexible Financing Model: By analyzing cash flows instead of relying on traditional collateral, Velocity made funding accessible to emerging and established brands.
3. Strategic Partnerships: The platform worked closely with funded brands to ensure seamless capital utilization and scalability.
Impact.
1. Growth in Funded Brands: Velocity supported several notable F&B brands such as IDC Kitchen, Smoor, Daily Sushi, and Milano Ice Cream. These businesses expanded operations and strengthened their supply chains.
2. Revenue Boost: Funded brands reported increased revenues by opening new outlets and optimizing operations.
3. Industry Impact: The initiative contributed to the growth of India’s F&B market, which is projected to expand from ₹5.5 trillion to ₹9 trillion by 2030.
Results : Improved Access to Capital: Over 200 F&B businesses received funding, enabling them to overcome financial barriers.
Enhanced Operational Efficiency: Businesses utilized funds for infrastructure upgrades and operational enhancements.
Market Expansion: The initiative allowed brands to enter new markets and attract a broader customer base.
Key Takeaways
1. Innovative Financing Models: Cash-flow-based financing is a game-changer for industries reliant on high operational agility.
2. Sector-Specific Solutions: Addressing the unique challenges of specific industries (e.g., F&B) fosters targeted growth and innovation.
3. Scalable Support: Flexible funding enables businesses to grow without sacrificing profitability.
Future Outlook velocity plans to expand its funding initiatives to other industries facing similar financial challenges.
The company aims to further strengthen the F&B sector by introducing tailored financial products for niche markets, such as quick-service restaurants and premium dining chains.
Conclusion Velocity’s ₹200 crore fund exemplifies the impact of innovative financial solutions in transforming industries. By addressing the financial pain points of the F&B sector, Velocity has set a precedent for cash-flow-based financing as a catalyst for growth, scalability, and market expansion.
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