Velocity earmarks Rs 200 Cr for working capital needs of restaurants

Indian fintech startup Velocity will set aside Rs 200 crore to support the growth of restaurants and cloud kitchens that operate on food delivery platforms like Zomato and Swiggy.

The initiative, set to roll out in 2025, will provide cash-flow-based financing to food and beverage brands that want to expand operations, purchase equipment, or invest in marketing.

“The growing appetite of Indian consumers for diverse culinary experiences, combined with the convenience of online food delivery, is driving remarkable growth in the food and beverage sector,” said Atul Khichariya, Co-founder and COO of Velocity. He noted that rising disposable incomes and evolving dining preferences are driving expansion, while premiumisation trends show consumers' willingness to spend on high-quality dining.

Since 2020, Velocity has funded several notable F&B brands such as IDC Kitchen, Smoor, Daily Sushi, Brahma Brew Works, Milano Ice Cream, Imperio, Amore Gelato, Jamie's Pizza, and Babas Chicken.

"F&B brands often struggle to secure financing from traditional sources like banks and NBFCs. Recognizing this gap, Velocity offers cash-flow based financing, enabling restaurants and cloud kitchens to effectively manage capital expenditure, working capital, open new outlets, purchase equipment, and launch sub-brands under existing ones without impacting operational profits," the company said in a statement.

India's food and beverage (F&B) sector is witnessing a significant shift, fueled by the rise of quick commerce, cloud kitchens, and ultra-fast delivery options. Companies such as Zepto, Swiggy Instamart, and Blinkit have rolled out 10-minute delivery services, including initiatives like Zepto Cafe, Bolt, and Bistro. Meanwhile, established players like Bigbasket and magicpin are gearing up to compete in this space, and new entrants such as Swish and Zing are beginning to make their mark.

"This shift to ultra-fast delivery is redefining convenience for consumers, pushing F&B brands to adapt swiftly," Velocity added. "To stay competitive, F&B brands are embracing technologies to better understand consumer behaviour, standardise processes and are investing in automation and machinery. As India’s F&B sector evolves rapidly, Velocity’s Rs 200 crore fund is designed to support new-age innovators in the space."