M1xchange, a Reserve Bank of India (RBI)-licensed Trade Receivables Discounting System (TReDS) platform, has successfully raised $10 million (approximately Rs 84 crore) from growth-stage investor Filter Capital through a secondary transaction. This fresh infusion of capital highlights growing investor confidence in digital supply chain finance solutions that are critical for India’s micro, small, and medium enterprises (MSMEs), which often face severe credit constraints.
About M1xchange: Revolutionising Invoice Financing for MSMEs
Founded in 2017 by fintech veterans Sundeep Mohindru and Vivek Misra, M1xchange operates a regulated marketplace that enables MSME vendors to auction their invoices to banks and non-banking financial companies (NBFCs). This innovative platform facilitates faster and more transparent access to working capital, helping MSMEs bridge the credit gap and maintain smooth business operations.
Invoice Financing Scale: M1xchange currently processes invoice financing worth nearly Rs 10,000 crore (around $1.2 billion) every month.
Cumulative Transactions: Since inception, the platform has facilitated over Rs 1.75 lakh crore (close to $20 billion) in trade receivables discounting.
User Base: Serving over 50,000 MSMEs, 2,800 corporates, and 66 financial institutions across India.
M1xchange CEO Sundeep Mohindru said, “This investment marks a significant milestone in our journey of technology-led growth and financial inclusion. Filter Capital’s belief in our vision strengthens our commitment to building a transparent and comprehensive supply chain finance ecosystem.”
Strategic Investment by Filter Capital
Filter Capital, known for its focus on fintech, SaaS, and logistics sectors, made this investment shortly after acquiring its maiden Rs 800 crore fund in April 2024. The $10 million secondary deal involved acquiring shares from existing investors, reflecting strong confidence in M1xchange’s business model and growth prospects.
Nitin Nayar, Co-founder and Managing Partner at Filter Capital, remarked, “India’s MSMEs contribute nearly 30% to the GDP but struggle with limited access to formal credit. M1xchange’s platform uniquely addresses this gap, and we believe they are positioned to scale impactfully.”
Zareer Shroff, Principal at Filter Capital, added, “M1xchange has demonstrated a rare combination of innovation and financial discipline, building a scalable three-sided exchange benefiting MSMEs, corporates, and financiers alike.”
Recent Funding and Market Momentum
This latest round follows a recent investment by Jindal Stainless and its subsidiary Jindal Stainless Steelway, which acquired a 9.62% stake in the Gurugram-based fintech firm. To date, M1xchange has raised approximately $45 million in primary capital from prominent investors including SIDBI Venture Capital, Amazon, IndiaMART, BEENEXT, and Mayfield.
Financial Performance and Growth Trajectory
FY24 Highlights: Operating revenue surged 91% year-on-year to Rs 56.47 crore.
Profitability Path: Net loss narrowed significantly to Rs 3.98 crore, showcasing operational efficiency.
Transaction Growth: The platform witnessed a 100% year-on-year jump in transaction volumes, underscoring robust market adoption.
Why M1xchange is a Game-Changer for Indian MSMEs
India’s MSME sector is the backbone of the economy, accounting for over 60 million enterprises and contributing nearly 30% to the country’s GDP. However, these businesses often face hurdles in accessing timely and affordable credit from traditional financial institutions. M1xchange’s digital TReDS platform offers a transparent, efficient, and scalable solution by connecting MSMEs directly with financiers, reducing dependency on informal credit sources.
What This Means for Bharat Fast Readers
Boost to MSME Financing: M1xchange’s growth signals a positive shift in how MSMEs access working capital in India.
Investor Confidence: Filter Capital’s investment validates the potential of fintech platforms focused on supply chain finance.
Digital Transformation: RBI-regulated platforms like M1xchange are modernising India’s credit ecosystem, promoting financial inclusion.
Growth Outlook: With rising transaction volumes and improving financials, M1xchange is on track to deepen its market presence and impact.
Looking Ahead: The Future of Digital Supply Chain Finance in India
As India’s economy accelerates, the demand for efficient trade receivables financing will only increase. Platforms like M1xchange are poised to play a pivotal role in bridging credit gaps, driving MSME growth, and supporting the broader goal of inclusive economic development.