M1xchange Raises $10 MM Led by Amazon

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  • MSMEs across 352 Cities use the M1xchange TReDS

  • M1xchange will expand its network across India and emerge as a comprehensive supply chain financing leader for MSMEs of all sizes

  • MSMEs can access funds at a much lower rate through M1xchange TReDS exchange

  • MSMEs can access funds within a turnaround time of 2 days and at a rate lower than bilateral funding rate. The exchange is bank agnostic with 36 banks on boarded.

  • M1xchange’s product and tech has reduced the risk of fraudulent bills with zero exceptions.

M1xchange has raised $10 million in its current funding round, which was led by Amazon and had participation from BEENEXT and existing investor Mayfield.

Mr. Sundeep Mohindru, CEO M1Xchange

M1xchange is the leader amongst the 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 US$ 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 annum; which is lower than the bilateral funding rate available outside M1xchange.

M1xchange brings down the cost of borrowing for all participants, thereby making MSMEs more competitive. The 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 past 3 years. Another USP of M1xchange is that it is a bank agnostic exchange with 36 banks 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.

The numbers of corporates that are approving invoices on M1xchange are by far the largest amongst all exchanges, thereby giving an opportunity to MSMEs to discount invoices of multiple buyers. During this pandemic time, M1xchange took steps to further enable social distancing and implemented Digital On-boarding of MSMEs on the website. This paperless and digital onboarding enables them to complete their digital onboarding journey within 15 minutes, without usage of courier for delivery of documents. Maple Capital Advisors from Delhi has helped M1xchange in this round of investment.

“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. 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,” said Sundeep Mohindru, CEO of M1xchange.

“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 7 lakh sellers sell on the Amazon India marketplace, a majority being MSMEs. We are continuously exploring different ways to help MSMEs scale their business and grow. As we continue to focus our efforts to realize our pledge of digitizing 10 million MSMEs by 2025, we believe an efficient digital exchange like M1xchange will encourage many more MSMEs to adopt e-commerce to access a nationwide customer base,” says Amit Agarwal, SVP and Country Head, Amazon India.

“As a regulated TReDS, M1xchange is accelerating MSME digitization, simplifying B2B payments, and deeper commerce penetration across India. We are still in early innings and next decade will be a golden age for Bharat MSMEs. M1xchange is ready to support them through technological solutions. Amazon’s investment will help accelerate this journey,” said BEENEXT partner Hero Chaudhary.

“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.

“We are existing investor in M1xchange and witnessed TReDS solving the challenge of delayed payments to MSMEs. We welcome Amazon in this journey to enhance the cause of MSME supply chain finance,” said Mahendra Lodha, Vice President & CS, SIDBI Venture, managing VC Funds & AIF primarily focused on MSMEs.

About M1Xchange

M1xchange is an RBI approved TReDS (Trade Receivable Discounting System). TReDS is an institutional mechanism set up in order to facilitate the financing of trade receivables of MSMEs from corporate buyers through multiple financiers. TReDS will boost the Indian economy by solving the erratic cash flow problems of MSMEs caused due to slow paying invoices. M1xchange has digitally transformed the vender payment ecosystem and the way MSMEs generate working capital.

Mayfield India and SIDBI Ventures invested in M1xchange in 2019. SIDBI has invested through their 2 funds in M1xchange namely Maharashtra State social venture Fund & Indian Opportunities Fund.

More details on M1xchange can be accessed at www.m1xchange.com. The utility of TReDS has been explained through videos at www.m1xchange.com/videos.php.

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