M1xchange, a Trade Receivables Discounting System (TReDS) platform licensed by the Reserve Bank of India, has successfully raised ₹84 crore (approximately $10 million) from growth-stage investor Filter Capital in a secondary transaction. This investment highlights the growing confidence among investors in digital supply chain finance, which serves as a critical lifeline for India’s credit-starved micro, small, and medium enterprises (MSMEs).
The recent funding comes shortly after Jindal Stainless acquired a 9.62% stake in M1xchange. With this latest round, M1xchange has raised around $45 million in primary capital from notable investors, including SIDBI Venture, Amazon, IndiaMART, BEENEXT, and Mayfield.
Understanding M1xchange’s Role
Founded in 2017 by Sundeep Mohindru and Vivek Misra, M1xchange operates an RBI-regulated marketplace that enables MSME vendors to auction their invoices to banks and non-banking financial companies (NBFCs). Currently, the platform processes approximately ₹10,000 crore (around $1.2 billion) in invoice financing each month, having facilitated a total of over ₹1.75 lakh crore (nearly $20 billion) since its inception.
“This marks an important milestone in M1xchange’s journey of innovation and financial inclusion,” said CEO Sundeep Mohindru. He emphasized that Filter Capital shares their long-term vision and understanding of technology-first businesses, strengthening M1xchange’s commitment to creating a transparent supply chain finance ecosystem for MSMEs.
Impressive Growth and Market Reach
M1xchange currently serves over 50,000 MSMEs, 2,800 corporates, and 66 financial institutions. The platform reported a 100% year-on-year increase in transaction volumes. In FY24, operating revenue surged by 91% to ₹56.47 crore, while the net loss narrowed to ₹3.98 crore.
“India has over 60 million MSMEs contributing nearly 30% to GDP, but access to formal credit remains limited,” noted Nitin Nayar, Co-founder and Managing Partner at Filter Capital. He expressed confidence in M1xchange’s ability to address this credit gap effectively. “They have built a scalable three-sided exchange that benefits all ecosystem players,” added Zareer Shroff, Principal at Filter Capital.
