NEW DELHI: BeenextAsia, Singapore and Mayfield have jointly made an investment of $ 4.5 million in the current equity round in M1xchange, largest among the three holders of the Trade Receivables Discounting System (TReDS) licenses issued by the RBI.
The round was led by incoming investor BeeNextfrom Japan and existing investor Mayfield followed on in this round as well. The utilisation of funds by M1xchange will be to expand its network across India.
“COVID-19 has accelerated digitization of cash, digitization of SME workflow and payments, commerce penetration into tier 2, tier 3 towns and villages, and B2B payments. With a software background, the team has built a remarkable product to empower Indian MSME vendors over the next decade, ” said BEENEXT partner, Hero Choudhary, in a statement.
In a statement, Sundeep Mohindru, CEO of M1xchange said, “The pandemic has had a profound effect on supply chains, businesses and economies. In the last few months, substantial movement has been felt for growth in business volumes versus previous quarter and this is also reflected in surge in volumes on M1xchange (TReDS). MSMEs across 352 cities have logged into TReDS Platform since the pandemic and have discounted invoices at rate of interest ranging between 4.75% PA to 8% PA. 60% of such MSME Enterprises are from Tier 3 & Tier 4 cities.”
Maple Capital Advisors, a Delhi based Investment Banking firm, acted as the financial advisors for this round of funding.
Started in 2017 under licence from the RBI, M1xchange has scaled up to discount invoices worth more than Rs 10,000 crore. M1xchange is the only TReDS platform where the assignment of receivables is done digitally for every transaction, in favour of the financing bank. This gives confidence to bank’s legal and risk teams for enforceability of Factoring Act regulations in the court of law, thereby bringing enhanced participation on the platform.
“M1xchange plans to utilize the investment over few years to enhance its market reach and further evolve the technology for ease of use. The newer models of Supply chain financing and the resultant technology will be deployed in coming months. There has been a considerable participation from corporates in the last eight months as they witnessed a merit in supply chain finance, as a means for reduction in their Business cost and providing cash flow support to their suppliers under revised definition. PSUs have also started to allow their MSME suppliers to transact on the platform during the last few months,” said Mohindru, in a statement.
