TReDS platform M1xchange raises Series A funding from Mayfield and SIDBI

M1xchange, a digital invoice discounting platform for Micro,Small and Medium Enterprises (MSMEs), has raised a Series A round of venture capital from Mayfield India and SIDBI Ventures.

This online platform, set up by Mynd Solutions in April 2017, will use the proceeds to invest further into technologies like blockchain, enhance its network and boost business growth for the company.

The quantum of Series A funding has not been disclosed.

M1xchange is one among the three Trade Receivable Discounting Systems (TReDS) approved by the RBI to bring together buyers, sellers and financiers for discounting MSME invoices.

The platform’s volume growth in past 12 months reflects its successful adoption by all the participants — MSME vendors, large corporates and banks, said Sundeep Mohindru, CEO, M1xchange.

Vikram Godse, Managing Partner, Mayfield India, said that the RBI and the Government, through TReDS, have created a highly innovative platform which will allow MSMEs to secure financing at the lowest possible cost. “We are excited to partner with Sundeep and the entire team at M1xchange which has emerged as the market leader in the TReDS space. This investment continues to be in line with our focus on the fintech sector in India”, he said.

Mayfield India — which follows an early stage venture capital strategy — has been investing in India since 2008 and has a total of $219 million under management. It invests in companies which targetsconsumer and business sectors across technology, tech-enablers and non-tech verticals.

MSMEs, despite their vastly important role in the Indian economy, continue to face constraints in obtaining adequate finance particularly in their ability to convert trade receivables into liquid funds.Further, those MSMEs that have access to credit do so at very high interest rates.

The TReDS system allows for MSMEs to receive money upfront which enables them to solve their collection-related and working capital needs. Most importantly, it helps MSMEs boost their ability to reinvest in their businesses faster to increase turnarounds, overall scale and financial wellbeing. All this comes at discounting or interest rates that are as low as what their large high-credit rated corporate customers would ordinarily be accustomed to.

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