TReDS Platform M1xchange Raises Funding from BEENEXT and Mayfield

Rs 10,000Crore throughput volume

MSMEs across 352 Cities used the TReDS Platform during the lockdown period

To expand its network across India and emerge as a comprehensive Supply chain finance leader

Access to funds at a much lower rate through the platform

15th December, 2020, Mumbai, Beenext Asia, Singapore and Mayfield have jointly made an investment of USD 4.5 Million in the current equity round in M1xchange, largest among the three holders of the Trade Receivables Discounting System (TReDS) licenses issued by RBI. The round was led by incoming investor BeeNext from Japan and existing investor Mayfield followed on in this round as well. The utilisation of funds by M1xchange will be to expand its network across India and emerge as a comprehensive supply chain finance leader.

"We are very excited to partner with M1xchange in their journey. COVID-19 has accelerated digitization of cash, digitization of SME workflow and payments, commerce penetration into tier 2, tier3 towns and villages, and B2B payments to name a few things. M1xchange stands to benefit from all of these trends. With a solid software background, team has built a remarkable product to empower Indian MSME vendors over the next decade." said BEENEXT partner, Hero Choudhary.

Sundeep Mohindru, CEO of M1xchange believes, "The pandemic has had a profound effect on supply chains, businesses and economies. In the last few months, substantial positive movement has been felt for growth in business volumes versus previous quarter and this is also reflected in surge in volumes on M1xchange (TReDS). MSMEs across 352 Cities have logged into TReDS Platform since Pandemic time 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 & Tier 4 Cities and are able to take the benefit of this digital revolution. In coming days this secured marketplace for receivables financing will be integrated with other government digital initiatives"

Maple Capital Advisors, a Delhi based Investment Banking firm, acted as the financial advisors for this round of funding.

Started in 2017 under licence from RBI, M1xchange has scaled up to discount invoices worth more than Rs 10,000 crore. Some of their USPs include being a bank agnostic platform with 35 banks on-board. M1xchange is the only TReDS platform wherein the assignment of receivables is done digitally for every transaction, in favour of the financing bank. This gives confidence to bank's legal and risk teams for enforceability of Factoring Act regulations in the court of law, thereby bringing enhanced participation on the platform. The internal risk and repayment scoring algorithm of M1xchange has mitigated risk of fraudulent bills with zero exceptions in past 3 years.

The numbers of corporates that are approving invoices on M1xchange (TReDS platform) are byfar the largest amongst all exchanges and giving an opportunity to MSMEs to discount their 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 platform. This paperless, digital onboarding enables them to complete their digital onboarding journey within 15 minutes, without usage of courier for delivery of documents. "M1xchange plans to utilize the investment over few years to enhance its market reach and further evolve the technology for ease of use. The newer models of Supply chain financing and the resultant technology will be deployed in coming months", said Sundeep Mohindru, CEO of M1xchange.

With so much momentum even during the pandemic the MSME Ministry revised the definition of MSME and launched Udhyam portal as a single source for registration of an enterprise as an MSME. Sundeep Mohindru, CEO of M1xchange concluded by saying, "This has been of great help since many MSMEs have been able to reach out directly to the TReDS platforms and get themselves registered with us. There has been a considerable participation from corporates in the last 8 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, EIL etc. The PSUs are working on gearing up to the digital handling of their MSME suppliers so as to maximize the advantages of the platform."

"M1xchange continues to be the leader in this space and the only TReDS platform who is attracting international investor interest. Continued investor participation validates this large market opportunity. This round should go a long way in enhancing technology development and personnel to achieve greater scale." said Vikram Godse, Partner and Managing Director, Mayfield Fund India.

About M1Xchange

M1xchange is an RBI approved TReDS (Trade Receivable Discounting System) platform. TReDS is an institutional mechanism set up in order to facilitate the financing of trade receivables of MSMEs from corporate buyers through multiple financiers. TReDS will boost the Indian economy by solving the erratic cash flow problems of MSMEs caused due to slow paying invoices. M1Xchange has digitally transformed the vender payment ecosystem and the way MSMEs generate working capital. This has been achieved through seamless presentation of bills, their validation, discounting, and approval of funds on a single platform. There is no need for additional collaterals to raise money through the platform.

More details on M1Xchange can be accessed at http://www.m1xchange.com/. The utility of TReDS has been explained through videos at http://www.m1xchange.com/videos.php.

About BEENEXT

BEENEXT is an early-stage focus venture capital firm managed by serial tech entrepreneurs since 2015. The partners have hands-on capabilities and have been focusing on assisting founders in over 190 early-stage tech startups in Fintech, Marketplace, Healthtech, Agritech, AI/Data, and Spacetech domains. BEENEXT aims to establish the platform of the founders, by the founders, and for the founders across the globe primarily in India, South East Asia, and Japan with their own operational experiences, network, and perspectives.

About Mayfield

Mayfield is a global venture capital firm with $2.5 billion under management. Since its founding in 1969, the Firm has invested in more than 500 companies resulting in 117 IPOs and more than 200 mergers or acquisitions. Mayfield India has over $200 million under management and is a sector agnostic fund that invests in both technology, as well as, non-technology start-ups across sectors such as financial services, consumer brands, FMCG, logistics, and healthcare amongst others.

RXIL and Tata AIG initiate The 1st Trade Credit Insurance Transaction in Sandbox Environment on the TReDS Platform

Receivables Exchange of India Ltd. (RXIL) recently initiated a Trade Credit Insurance (TCI) backed transaction with Tata AIG as the insurer and ICICI Bank, YES Bank as the financiers in Sandbox environment. This is the first time a TReDS platform has tested the efficacy of TCI backed transaction improving the ability of financiers in assigning credit limits to corporates. TCI, once implemented post regulatory approvals, will enable financiers to discount the invoices drawn on lower rated corporate buyers, by their MSME sellers and will improve the liquidity from lenders.

The adoption of Trade Credit Insurance on TReDS will pave the way for a completely digital bite-sized credit insurance model. Buying credit insurance on TReDS will be as simple as buying travel insurance while buying an air ticket on a travel portal, devoid of the lengthy paperwork generally associated with trade insurance.

Ketan Gaikwad, MD & CEO of Receivables Exchange of India Pvt. Ltd commented, “There has been a need for Trade Credit Insurance (TCI) on TReDS, we are glad that the regulators provided us with a roadmap in a time-bound manner. TCI will help financiers in mitigating the risk of non-payment and insolvency/defaults of the buyers. We collaborated with TATA AIG as the insurer, ICICI and YES Bank as financiers to execute the transaction. This is expected to increase the current throughput of the platform and put our country ahead in league with other developed markets the way this product has been designed"

Trade Credit Insurance is a structural reform that has been re-introduced in India after a gap of 10 years. Globally, factoring and insurance go hand in hand, however, in India, both are being seen with a renewed interest as the economy is gradually moving towards formalisation of small businesses. TCI on TReDS was one of the recommendations by U.K Sinha Committee report on MSME credit. The working group constituted by IRDAI reviewed the guidelines on TCI, which has paved the way for testing in Sandbox environment.

Ajay Gupta, Head Transaction Banking and SMEG, ICICI Bank said, “We are delighted to partner with RXIL for the Trade Credit Insurance (TCI) and successfully piloting the test transaction under IRDA’s regulatory sandbox proposal of TATA AIG. We are sure that TCI will significantly increase the ability of the buyers to get financiers to discount the invoices raised by their MSME suppliers, thereby benefitting a much larger universe of MSMEs. We believe TCI will gather further momentum when it gets approved as Credit Risk Mitigation Technique for lending."

Ajay Rajan, Global Head - Transaction Banking Group, YES BANK said, “With this successful pilot of the Trade Credit Insurance (TCI) backed structure in the Sandbox environment, YES BANK in partnership with RXIL has taken yet another significant step in its efforts towards digitizing and bringing efficacy in the financial supply chain arrangement between Corporate Buyers and their MSME sellers. TCI being a globally accepted Trade Financing & Credit Enhancement structure could potentially help in augmenting and expanding the scope of supply chain financing, thereby supporting the ‘Atmanirbhar Bharat' initiative of the Government.

Risk management and mitigation is an important component of a well-oiled supply chain that drives the economic engine. A simplified trade credit insurance regime that includes MSMEs will encourage more liquidity from lenders and improve the industry’s resilience allowing them to expand faster.


About Receivables Exchange of India:

Receivables Exchange of India is an RBI accredited TReDS (Trade Receivables Discounting System) Exchange Platform that started as a joint venture between Small Industries Development Bank of India (SIDBI) and National Stock Exchange of India Limited (NSE) with State Bank, ICICI and Yes Bank as other stakeholders.


RXIL empowers small businesses to realize their growth potential by accelerating their collections. With its innovative digital platform, MSMEs today can auction their trade receivables on a non-recourse basis at competitive rates, through online bidding by financiers, and gain access to capital in less than 48 hours. This helps MSMEs ease liquidity problems and puts a healthy cash flow back into their working cycles for smoother runs in their businesses. RXIL has over 4,800 MSMEs, 550 buyers and 39 financiers on the platform.