Velocity allocates Rs 200 crore fund to support restaurants, cloud kitchens in 2025

Revenue-based financing platform Velocity has earmarked a Rs 200 crore fund in 2025 to strengthen the business of restaurants and cloud kitchens, selling on food aggregator platforms.

The Bengaluru-based firm said that fund has been designed to address the challenges faced by the Food & Beverages (F&B) brands. Velocity will be offering cash-flow financing to cloud kitchens and restaurants so that they can effectively manage capital expenditure, working capital, open new outlets, purchase equipments, and launch sub-brands.

India’s F&B industry is undergoing a rapid transformation driven by the convergence of quick commerce, cloud kitchens, and ultra-fast delivery models. Platforms like Zepto, Swiggy Instamart, and Blinkit have introduced 10-minute delivery services such as Zepto Cafe, Bolt, and Bistro. Bigbasket and Magicpin are also preparing to enter this space while emerging players like Swish and Zing are also gaining traction. This shift to ultra-fast delivery is redefining convenience for consumers, pushing F&B brands to adapt swiftly. Moreover, initiatives like the Open Network for Digital Commerce (ONDC) are enabling F&B brands to extend their reach beyond traditional marketplaces, unlocking new revenue streams in India’s evolving food delivery ecosystem.

On the announcement of the fund, Velocity co-founder and COO Atul Khichariya said, "The growing appetite of Indian consumers for diverse culinary experiences, combined with the convenience of online food delivery, is driving remarkable growth in the F&B sector. This shift is also fueling a premiumization trend, as consumers increasingly seek high-quality food and beverage options, reflecting their willingness to spend and indulge in unique dining experiences. Velocity’s cash-flow based financing model ensures that F&B brands can scale seamlessly while maintaining financial flexibility".

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. These businesses utilized the funds to expand operations, strengthen supply chains, and enhance marketing efforts. F&B brands are embracing technologies to better understand consumer behavior, and standardize processes and are investing in automation and machinery to stay competitive. The Bengaluru based fintech has raised $30 million in equity funding led by Peter Thiel’s Valar Ventures.

According to a report by Swiggy and Bain & Company, India’s food delivery and dining-out market is projected to nearly double, growing from Rs 5.5 trillion to Rs 9 trillion by 2030. The surge is driven by rising disposable incomes, evolving consumer preferences, and the expanding reach of food aggregator platforms.