In a significant boost for India’s fintech and MSME ecosystem, M1xchange, a leading supply chain financing platform, has secured $10 million (INR 84 crore) in a secondary deal from Filter Capital. This funding is expected to further strengthen the startup’s efforts in expanding digital supply chain financing solutions for micro, small, and medium enterprises (MSMEs) across the country.
Revolutionizing MSME Financing in India
Founded in 2016 by Sundeep Mohindru and Vivek Misra, M1xchange operates as a TReDS (Trade Receivables Discounting System) platform regulated by the Reserve Bank of India (RBI). It enables MSMEs to raise short-term working capital by discounting their trade receivables, thereby helping them tackle cash flow challenges without resorting to high-cost loans.
By leveraging invoice-based financing, M1xchange has built a strong digital ecosystem that facilitates seamless transactions between buyers, suppliers, and financiers. Its platform connects over 65 banks and NBFCs with a growing base of more than 50,000 MSMEs, significantly improving access to affordable credit for small businesses.
Strategic Funding for Digital Growth
The fresh infusion of $10 million from Filter Capital via a secondary transaction marks a pivotal moment for M1xchange. While no new shares were issued, the capital will be strategically utilized to:
- Enhance platform capabilities with advanced tech integrations
- Expand reach to underserved MSMEs in Tier-II and Tier-III cities
- Strengthen partnerships with banks, NBFCs, and corporates
- Drive awareness and adoption of invoice discounting among MSMEs
This move aligns with M1xchange’s mission to simplify and digitize the supply chain financing process, making it faster, more transparent, and more inclusive.
Addressing the MSME Credit Gap
India’s MSME sector contributes around 30% of the country’s GDP and employs over 110 million people, but still faces a massive credit gap exceeding $300 billion. Traditional lending mechanisms often overlook small businesses due to lack of collateral, credit history, or formal documentation.
M1xchange addresses this gap by offering a digital-first, data-driven approach that evaluates businesses based on real-time invoices and payment cycles. The platform’s RBI-compliant model ensures security and trust, attracting a wide range of institutional lenders.
Growth and Impact
Over the years, M1xchange has facilitated thousands of crore in invoice financing and continues to see exponential growth in both transaction volume and user base. Its TReDS platform not only accelerates working capital cycles but also enhances MSME creditworthiness over time.
With the new funding and Filter Capital’s backing, M1xchange is well-positioned to scale operations, introduce new financial products, and deepen its impact in the MSME sector.
Final Thoughts
As India moves towards a more digital and inclusive economy, platforms like M1xchange are becoming essential enablers of financial empowerment. With strong leadership, a robust technological foundation, and fresh capital in hand, M1xchange is poised to redefine how MSMEs access and manage working capital in the digital age.
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