IndiaMART & BEENEXT acquire additional stake in Mynd Solutions

IndiaMART & BEENEXT, the existing shareholders have invested â‚¹38 crores approximately to acquire an additional stake of 3.4% & 1.99% respectively in India’s largest TReDS platform Mynd Solution’s M1xchange. This also marks the exit of India Opportunities Fund of SIDBI Venture Capital Limited, an early investor in the company. 

Mynd Solutions, under its brand name ‘M1xchange’, is a digital marketplace to sell receivables to banks/ financial institutions setup under the approval of RBI. Mynd Solutions Private Limited is one of the three companies to set up TReDS platform under the Payment and Settlement Act, 2007 to facilitate discounting of invoices and bills of exchange for MSMEs on PAN India basis.

With the help of onboarded 48 banks and financial institutions, the transaction illustrates that the TReDS platforms have matured into an important source of funding for the economy, easing accessibility of funds to more than 13000 MSMEs as well as recovery for the financed and the financiers. 

MSMEs are the backbone of the Indian economy and M1xchange with an end-to-end digital process has discounted invoices of over 13000 MSMEs spread over 1250 towns totaling over Rupees 34,000 crores. TReDS enables the financial inclusion of MSMEs on a high scale, digitally, and with a positive social impact. This financing is without any hard collateral or security and without recourse to MSMEs.

“M1xchange has improved liquidity for Indian MSMEs by enabling discounting of trade receivables at competitive rates. The discounting is based on credit rating of the MSME’s customer and therefore cost of finance is very cheap. This makes MSME more competitive in pricing to his customer.  Banks have also benefitted from M1xchange as this has opened new avenue of business for banks and the repayments of Trade receivables financed is fully digital and the default on repayments is negligible “Said Sundeep Mohindru, CEO of M1xchange.

“Indian businesses have diverse credit needs. Low cost working capital finance provides liquidity to businesses, especially small and micro businesses. This investment is in line with IndiaMart’s long term objective of making business easy for Indian businesses. We are excited to strengthen our relationship with M1Xchange”, said IndiaMart’s founder and MD, Mr. Dinesh Agarwal.

Commenting on the deal, Hero Choudhary, Managing Partner, from BEENEXT said “We are big believer in financial inclusion – a core theme around M1xchange partnership. Bringing MSMEs into formal credit economy through TReDS platform, we believe Indian businesses can unlock tremendous value for their vendors. At the same time,  PSU, private sector banks can have diverse credit exposure resulting in more differentiated credit portfolio. At BEENEXT, we are very excited to be part of this journey.”

“SIDBI Venture capital has made spectacular gains on its second tranch investment done in 2019, realizing around 4.6 X on its total investment. Being the first institutional investor in M1xchange, SIDBI has witnessed TReDS process from the initial stage of setting up of the idea to solve delayed payments of MSME’s, said Mr Mahendra Lodha, Nominee Director & Senior Fund Manager, SIDBI Venture Capital Limited, which manages multiple VC funds & AIF's primarily focused on MSMEs / startups in India.