Amazon leads $10-million investment in MSME fintech startup M1xchange

The round also saw participation from BEENEXT and Mayfield

M1xchange, an RBI-approved trade receivable discounting system, announced it has raised $10 million in its current funding round, which was led by Amazon, and saw participation from BEENEXT and existing investor Mayfield.

M1xchange is a leading players among holders of the three Trade Receivables Discounting System (TReDS) licenses issued by RBI, in terms of cumulative value of invoices discounted.

Since the launch of the exchange, a little over 3 years ago, M1xchange has discounted invoices totaling $1.7 billion across 10,000 MSME suppliers. These suppliers access the website from 352 cities digitally to finance their receivables and enjoy a rate of interest, that is, 6-10 per cent per annum; which is lower than the bilateral funding rate available outside M1xchange.

“We are proud to welcome a global technology company like Amazon to join us as a shareholder in our goal to become a leader in supply chain finance. Over the last decade, India has gone through a sea change in the enormous number of MSMEs now selling their wares online. Our unique approach to supply chain finance will also benefit the large ecosystem of vendors built by Amazon in India,” said Sundeep Mohindru, CEO, M1xchange.

He further added, “This investment comes at a time when M1xchange is working towards integrating this secured marketplace for receivables financing with other government digital initiatives. With this new funding, we plan to further expand our reach beyond the 352 cities from where MSMEs currently enjoy the benefit of discounted invoices.”

M1xchange’ digital process enables seamless presentation of bills, their validation, discounting, and disbursement of funds in an average TAT of 2 days. Amongst options available, M1xchange allows the shortest time for MSMEs to receive funding.

M1xchange is the only TReDS exchange wherein the assignment of receivables under Factoring, is done digitally for every transaction, in favour of the financing bank. The internal risk and repayment scoring algorithm of M1xchange has mitigated risk of fraudulent bills with zero exceptions in the past three years. Another USP of M1xchange is that it is a bank agnostic exchange with 36 lenders on board.

M1xchange’s team is continuously enhancing user experience and has lately announced the launch of its mobile app.  Amongst the various unique features offered is the usage of Aadhaar Based e-sign to enable quick Authorization/Acceptance of invoices and bids on mobile app.

Maple Capital Advisors from Delhi has helped M1xchange in this round of  investment.

“Sundeep is a visionary who has built a good quality service in M1xchange which has the potential to immensely benefit MSMEs in India. MSMEs are the backbone of India’s economy. Today over 700,000 sellers sell on the Amazon India marketplace, a majority being MSMEs. As we continue to focus our efforts to realize our pledge of digitising 10 million MSMEs by 2025, we believe an efficient digital exchange like M1xchange will encourage many more MSMEs to adopt ecommerce to access a nationwide customer base,” says Amit Agarwal, SVP and Country Head, Amazon India  

“We are happy to see Amazon share the same vision we had by investing in M1xchange in 2019 and look forward to working with Sundeep and the new investors in the Company to grow in this very large and under penetrated market,” said Vikram Godse, Managing Partner, Mayfield India.