● Indian D2C startup WaterScience has raised an undisclosed amount from Velocity.in, India’s largest revenue-based financier
● WaterScience plans to use these funds to finance its inventory and ramp up digital marketing
● Velocity.in leverages online data to offer non-dilutive, collateral-free growth capital within a week.
WaterScience, a direct-to-consumer (D2C) startup that makes shower and tap filters, has raised an undisclosed amount from Velocity.in, India’s largest revenue-based financier. This is the second round of financing they have raised via Velocity.in, having previously raised seed funding from veteran PE professional and angel investor Aditya Somani.
WaterScience manufactures filters that purify water for non-drinking use cases for the masses. As per a Niti Ayog study, India is placed at 120th amongst 122 countries in the Water Quality Index, with nearly 70% of water being contaminated. The poor water quality coupled with the unavailability of solutions for non-drinking water in India led Mohammed Iqbal, Sudeep Nadukkandy and Pavithra Rao to start WaterScience.
WaterScience Co-Founder Sudeep Nadukkandy non-drinking water accounts for more than 95% of daily water usage. “I was surprised to find no solutions in the market to enhance its quality. At WaterScience, we are bridging this gap by building high-quality purification systems. Our products tackle hardwater and chlorine which is a big problem in cities. They also help improve the efficiency of drinking water filters,” says Sudeep Nadukkandy.
The bootstrapped venture is now gearing up for its next leg of growth with this financing. Sudeep Nadukkandy said WaterScience shower and tap filters are seeing growing demand in metros and tier-1 cities with declining water quality.
“We plan to use the funds from Velocity.in to acquire customers and build inventory. The first funding round helped us increase our revenues significantly despite the pandemic. We hope to take this number even higher and are targeting 35 crores this year with this round of financing,” said Sudeep Nadukkandy.
As per Avendus Capital, the D2C segment in India is expected to register a growth of 35% year on year to reach $100 billion in size by 2025. WaterScience is one of such fast-growing D2C businesses that has upended traditional sales channels by selling directly to customers.
“Prior to the pandemic, we used to generate around 5% of revenues via our own website while the remaining was via marketplaces like Amazon. Our focus was always to increase the website’s share of revenues, with the right digital marketing spends we have now successfully increased our website sales to 30% of online revenues,” says Sudeep Nadukkandy.
Speaking about the round of financing, Velocity.in Co-founder & CEO Abhiroop Medhekar said WaterScience is an internet-first brand with impressive returns on digital marketing and strong unit economics.
“An online model coupled with a loyal customer base worked in their favor during the pandemic. Since we had a historical relationship with them, we were able to approve this round of financing within just 3 days. WaterScience has carved a niche and solves a problem that plagues our country. We are happy to fund their growth and build on our long-standing relationship with them,” said Abhiroop Medhekar.
Velocity.in is a Bengaluru-based fintech company and is India’s largest revenue-based financier. The company commenced operations in early 2020 and has since worked with over 500 e-commerce businesses.
Sudeep Nadukkandy said equity and debt financing were not ideal for us, sacrificing equity or providing collateral in exchange for capital would have been an expensive trade-off.
“At the same time, we constantly need working capital to scale our business, thanks to Velocity.in we always have ready access to funding that can be raised without diluting equity or pledging our assets. We use these funds for new product development and to boost digital marketing spends, additionally we have the benefit of paying back the financing flexibly based on our revenues,” says Sudeep Nadukkandy.
Velocity:
Velocity.in was launched in early 2020 by IIT Bombay graduates, Abhiroop Medhekar, Atul Khichariya and Saurav Swaroop. The founding team has a strong background in India’s financial services and tech startup ecosystem. They previously worked in companies like Elevation Capital (earlier SAIF Partners), McKinsey, Acko Insurance, and Hacker Rank. Velocity.in is their second tryst with entrepreneurship. The trio had earlier worked together at Taskbob, a managed marketplace for high-quality home services. For more information, please visit: https://www.velocity.in.
WaterScience:
WaterScience manufactures filters that purifies water for non-drinking use cases. Started in 2014 by Mohammed Iqbal, Sudeep Nadukkandy and Pavithra Rao, WaterScience aims to bring better quality water to everyone. The company has sold around 3 lakh products in the last four years. The products are available on the company’s website as well as eCommerce platforms like Amazon and Flipkart. A Bangalore-based company, WaterScience was started by the founders basis their personal struggles with poor quality water and the lack of affordable, easy-to-install, effective solutions.
