M1xchange has raised $10 million in its current funding round, which was led by Amazon, and had participation from BEENEXT and existing investor Mayfield.
M1xchange is 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 three 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 annum.
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.
“Over the last decade, India has gone through a sea change in the enormous number of MSMEs now selling their wares online. Our approach to supply chain finance will 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, M1xchange, in a statement.
The numbers of corporates that are approving invoices on M1xchange are 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.
In a statement Amit Agarwal, SVP and Country Head, Amazon India said, “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 are still in early innings and next decade will be a golden age for MSMEs, M1xchange is ready to support them through technological solutions. Amazon’s investment will help accelerate this journey.” said BEENEXT partner Hero Chaudhary, in a statement.
Vikram Godse, Managing Partner, Mayfield India, in a statement, said, “We are happy to see Amazon share the same vision we had by investing in M1xchange in 2019.”