M2P Fintech raises $56 million in Series C1 round, valuation doubles to $600 million

M2P Fintech founders (left to right) Madhusudanan R, Prabhu R and Muthukumar A.

Application Programming Interface (API) infrastructure company M2P Fintech has raised $56 million in a Series C1 round led by New York-based venture capital firm Insight Partners with participation from MUFG Innovation Partners, a CVC company of Mitsubishi UFJ Financial Group, Inc. (MUFG).

Existing investors Tiger Global and Better Capital also participated in the round. This is the company's third fundraise in less than a year and takes its valuation to $600 million, up from the $335 million valuation during its Series C round in October 2021.

In a conversation with Moneycontrol, the startup's Co-founder and CEO Madhusudanan R said that this third consecutive and largest fundraise till date is to fuel the company's growth plans.

"There are two reasons for us to raise capital. One is to supplement our international expansion plans by growing the infrastructure in a few markets. Secondly, we see acquisitions as the way forward," Madhusudanan said.

Previously known as Yap, the company was founded in 2014 by Madhusudanan R, Muthukumar A and Prabhu R. The company provides API infrastructure capabilities to banks, fintech, and consumer internet companies across Asia. API refers to software intermediaries that help computers communicate with one another.

As part of its offerings, M2P Fintech helps companies build interfaces for cross-border payments, prepaid and credit cards, neobanking, Buy Now Pay Later (BNPL) solutions, among others.

M2P has a market presence in India, Nepal, the United Arab Emirates, Australia, New Zealand, the Philippines, Bahrain, and Egypt. The company plans to further expand its footprint to Indonesia, Bangladesh, Vietnam, and across the Middle East and North Africa (MENA) region.

"We are live in eight countries and are in the process of growing that number to 20. The process of seeking regulatory approvals and setting up in these new markets is underway," he said.

For growing its offerings to clients, the company will look to acquire firms offering APIs for account aggregators and upgrading checkout experiences for card-related products.

This round brings the Chennai-based startup close to the $1 billion valuation unicorn club and the total funds raised by the company stand at $107 million. The company is seeing this as an intermediary round. However, the company will now look at raising a fresh round for at least two more quarters, Madhusudanan said.

With banks doubling down on their digital presence and offerings and fintechs seeing a massive growth in consumer adoption over the past two years, the need for banking and financial services APIs is only set to grow. However, hiring and retaining tech talent remains a key challenge to growth amid the ongoing talent war.

Speaking on further challenges for the business, Madhusudanan said, "The second challenge is that the growth in other markets may not be as rapid as what India is seeing right now. From our own growth perspective, we still have to wait and watch how the whole international playbook evolves."

“M2P is India’s leading fintech infrastructure-as-a-service company – they knit together the broadest set of banking and fintech relationships in the market and have built powerful products delivered as an API with a strong commitment to customer service,” said Nikhil Sachdev, Managing Director at Insight Partners in a statement.

The company has over 500 clients including Razorpay, ICICI Bank, Ola,  RBL Bank, Slice, among others. In its last round the company raised $35 million, before which it had raised $10 million a Series B round in March 2021.