Jindal Stainless, along with its wholly owned subsidiary, Jindal Stainless Steelway Limited, acquires a 9.62% stake in M1xchange, an RBI-licensed Trade Receivables Discounting System (TReDS) platform. The deal includes a combination of primary capital and secondary purchase of shares from existing stakeholders.
M1xchange plays a crucial role in bridging MSMEs with financiers by digitizing invoice discounting and providing early access to working capital. Jindal Stainless’ investment aims to enhance liquidity, improve digital supply chain financing, and accelerate digital transformation in payment processing and financing operations. The acquisition also aligns with Jindal Stainless’ broader vision of optimizing its working capital cycle and fostering seamless business operations.
M1xchange has onboarded over 65 banks, 2,000 corporates, and 48,000 MSMEs, facilitating invoice discounting transactions worth more than Rs 160,000 crore. With a significant revenue increase of 91% in FY24 and a strategic investor portfolio including Amazon, IndiaMART, and SIDBI, the platform is poised for exponential growth. Jindal Stainless’ market presence and financial backing will further strengthen the ecosystem, ensuring affordable credit accessibility for MSMEs and corporate partners.
1. Introduction to M1xchange
1.1 Working Model of M1xchange
M1xchange is a digital platform that facilitates trade receivables discounting for MSMEs through an auction-based system. This allows MSMEs to receive early payments against invoices, improving cash flow and reducing dependence on traditional banking loans. The platform ensures transparency, competitive rates, and seamless integration with banks and NBFCs.
1.2 Revenue Model of M1xchange
M1xchange earns revenue through transaction-based fees from invoice discounting and other digital financial services. It charges professional fees for connecting businesses with financial institutions, facilitating smooth transactions between vendors and buyers.
1.3 Funding Background and Investors
Since its inception, M1xchange has raised over $19 million from investors like SIDBI Venture, Amazon, IndiaMART, BEENEXT, and Mayfield. SIDBI holds an 11.85% stake, while Amazon owns 9.75%, making M1xchange a well-backed fintech venture with a strong industry presence.
1.4 Founders and Background
Founded in 2017, M1xchange is promoted by Sundeep Mohindru, an industry expert in digital supply chain financing. Under his leadership, the platform has revolutionized MSME financing, providing liquidity through innovative financial solutions.
1.5 Services Offered by M1xchange
- TReDS Platform: Facilitates invoice discounting for MSMEs with verified buyers.
- ITFS (GIFT City): Enables international trade finance solutions.
- Mynd Fintech: Offers channel financing to MSMEs for enhanced liquidity.
2. Jindal Stainless’ Investment in M1xchange
2.1 Deal Structure
Jindal Stainless and its subsidiary acquires a 9.62% stake in M1xchange through primary capital and secondary share purchase. The acquisition cost approximately Rs 154 crore ($18 million).
2.2 Strategic Importance for Jindal Stainless
This investment helps Jindal Stainless streamline its supply chain financing, enhance digital transformation, and improve liquidity for its partners. The deal aligns with Jindal Stainless’ vision of optimizing financial operations and expanding digital initiatives.
2.3 Enhancing Liquidity in the Ecosystem
The partnership will provide MSMEs with better access to working capital, ensuring quicker payment processing and strengthening Jindal Stainless’ financial health.
2.4 Leadership Commentary
Managing Director of Jindal Stainless, Abhyuday Jindal, emphasized the importance of timely financing for MSMEs. Executive Director & CFO, Anurag Mantri, highlighted the potential to revolutionize financing practices through M1xchange’s solutions.
3. Impact of the Acquisition
3.1 Strengthening the Digital Supply Chain Financing Ecosystem
The investment will empower MSMEs with faster access to capital, boosting economic growth and competitiveness.
3.2 Expansion of M1xchange’s Market Reach
With Jindal Stainless’ backing, M1xchange can further expand its footprint, onboarding more MSMEs and financial institutions.
3.3 Digital Transformation in Payment Processing
The partnership accelerates the digitalization of financing operations, reducing working capital cycles and increasing efficiency.
3.4 Financial Growth of M1xchange
M1xchange reported a 91% rise in operating revenue in FY24, signaling strong market potential. The investment by Jindal Stainless will further drive financial stability and expansion.
4. Learning for Startups and Entrepreneurs
4.1 Importance of Digital Financial Solutions
Startups should leverage digital platforms like M1xchange to optimize cash flow and gain access to early financing.
4.2 Strategic Investments Enhance Growth
Investing in innovative solutions can strengthen financial operations and business scalability.
4.3 Building an Ecosystem of Partnerships
Collaborations between established businesses and fintech startups can drive digital transformation and financial inclusion.
4.4 Role of Government Policies in Digital Financing
RBI-licensed platforms like TReDS play a crucial role in fostering MSME growth and providing structured financial solutions.
5. About The Startups News
The Startups News provides the latest insights, trends, and industry updates on startup investments, business innovations, and digital transformations. Our platform is dedicated to keeping entrepreneurs informed about key developments in the startup ecosystem, offering strategic knowledge to scale their businesses efficiently.
