E-commerce enablement startup Velocity will invest ₹100 crore over two years to scale Velocity Shipping, its AI-driven logistics platform, as shipping grows into a core revenue engine.
For India’s digital-first brands, logistics has shifted from a backend function to a competitive weapon.
Velocity has earmarked ₹100 crore to scale Velocity Shipping, its logistics business formerly known as Shipfast. The investment, to be deployed over the next two years, will be funded entirely from internal cash reserves and operating revenues, underscoring the company’s confidence in shipping as a long-term growth pillar.
The move comes as delivery speed, reliability, and transparency increasingly shape conversion rates and brand loyalty in India’s crowded D2C market.
Shipping becomes a core revenue driver
Launched in 2025, Velocity Shipping has grown rapidly within Velocity’s ecosystem. More than 900 brands are now onboarded, around 60% of them drawn from Velocity’s existing base of merchants. The platform is seeing roughly 70% month-on-month growth in order volumes and now contributes close to 40% of the company’s total revenue.
In December 2025 alone, Velocity Shipping processed over one million orders, placing the company among India’s top three shipping aggregators by volume, according to internal data.
Velocity is now targeting a five-fold increase in monthly shipping volumes in calendar year 2026.
Why logistics is the new bottleneck
For many D2C brands, growth constraints have shifted from customer acquisition to fulfilment. Missed pickups, delayed COD settlements, opaque billing adjustments, and unreliable last-mile delivery directly affect repeat purchases and cash flows.
Industry data supports that pressure. According to DHL eCommerce’s E-Commerce Trends Report 2025, 81% of shoppers abandon carts if preferred delivery options are unavailable.
Velocity’s bet is that solving logistics at scale can unlock faster growth across its broader platform.
AI as an intervention layer, not just automation
Velocity Shipping differentiates itself through an AI-driven intervention layer that operates across the order lifecycle. The system validates addresses, triggers AI-led voice and WhatsApp verification for cash-on-delivery orders, and automatically intervenes when shipments are marked as non-delivery reports or return-to-origin.
The company says orders verified through AI-led calls are delivered at nearly 1.9 times the rate of unverified orders, based on more than 240,000 AI-assisted verification calls. That intervention has helped recover 60–70% of failed deliveries where buyers remain interested, while reducing RTO rates by 8–10 percentage points.
This focus on operational accountability, rather than just aggregation, is central to Velocity’s pitch.
Building scale with partners, not ownership
Velocity Shipping works with multiple third-party logistics partners, including Delhivery, Ekart, Amazon, Blue Dart, Blitz, Pikndel, and XpressBees, covering more than 19,000 pincodes across India.
Instead of building a proprietary delivery network, Velocity is positioning itself as a coordination and intelligence layer—optimising courier selection, escalation, and billing through software and AI.
That approach keeps capital intensity lower while allowing faster geographic expansion.
A broader platform strategy
Founded in 2020 by IIT Bombay alumni Abhiroop Medhekar, Atul Khichariya, and Saurav Swaroop, Velocity began as a non-dilutive financing platform for D2C brands. It has since expanded into logistics, insights, and AI-led customer engagement.
The company says its core financing business is on track to turn profitable in CY26, while shipping is emerging as its fastest-growing vertical.
What this signals for India’s e-commerce stack
Velocity’s ₹100 crore commitment highlights a broader shift in India’s startup ecosystem. As customer acquisition costs rise and marketplaces mature, infrastructure—particularly logistics—is becoming the real differentiator.
AI-led optimisation, transparency, and reliability are increasingly table stakes.
For Velocity, the challenge now is execution at scale. If it succeeds, shipping may no longer be just a support function—but the backbone of India’s next generation of D2C growth.
