TReDS platform M1xchange raises $4.5 mn to scale operations

Mynd Solutions-operated M1xchange, which holds a central bank-issued Trade Receivables Discounting System (TReDS) license, on Tuesday said that it has raised $4.5 million from Beenext Asia and Mayfield.

While the round was led by new investor BeeNext, returning investor Mayfield participated in it, a statement said.

The Gurugram-based startup said it will use the fresh capital to expand M1xchange’s network across India and scale its supply chain finance offering.

Through the TReDS platform, M1xchange offers trade receivables exchange for suppliers, corporates and financiers. The platform helps users calculate the final transaction amount and enables fund transfer from the financier's bank account to the supplier’s account.

It also aids suppliers to select the most suitable bids. The company claims to be the largest among the three RBI-issued TReDS licenses holders.

The company, founded by Sundeep Mohindru and Vivek Misra, has a presence in Maharashtra, Karnataka, Tamil Nadu, and West Bengal, apart from its headquarters. According to VCCEdge data, the company has raised $6.8 million in funding, excluding the latest round.

The M1xchange platform, launched in 2017, has scaled up to discount invoices worth over Rs 10,000 crore, as per the statement and currently supports 35 banks. 

“The internal risk and repayment scoring algorithm of M1xchange has mitigated risk of fraudulent bills with zero exceptions in the past three years,” the statement said.

During the ongoing pandemic, M1xchange said it took steps to further enable social distancing and implemented digital on-boarding of MSMEs on the platform. “This paperless, digital onboarding enables them to complete their digital onboarding journey within 15 minutes, without usage of courier for delivery of documents,” it said.

The pandemic, the company said, had a profound effect on supply chains, businesses and economies.

“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 and Tier 4 cities, and are able to take the benefit of this digital revolution. In (the) coming days, this secured marketplace for receivables financing will be integrated with other government digital initiatives,” Mohindru, also the CEO of M1xchange, said.

The government this year also revised the definition of MSMEs and launched Udhyam portal as a single source to enable enterprises to register as MSMEs.

“There has been a considerable participation from corporates in the last eight months (post lockdown) 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. Some of these are IOCL, BPCL, NTPC, ONGC, Power Grid, HAL (and) EIL,” Mohindru said.