Chennai-based AI startup Mad Street Den is being acquired by fintech infrastructure company M2P in a cash and stock deal valued at around $10-15 million, underscoring the growing trend of consolidation among SaaS firms in India.
The development was confirmed by two people directly familiar with the development. Moneycontrol has reached out to M2P and Mad Street Den for comment and will update this article upon receiving a response.
Sources say M2P has also acquired MSD’s full stack AI platform, Vue.ai to double down on its AI and data first growth strategy. Vue.ai's platform powers large enterprises ranging from banking, finance, insurance and logistics to retail, government services and more.
The fintech heavyweight's acquisition positions M2P as an AI-native enterprise. The deal is a mix of stock and cash. Both founders, Madhusudanan from M2P and Ashwini Asokan from Mad Street Den, also have a Chennai connection.
Moneycontrol learns that since Mad Street Den is domiciled overseas this isn't a straight acquisition but an asset purchase. M2P will acquire Mad Street Den's intellectual property, contracts, and employees. Furthermore, the deal value, between $10 million and $15 million, will be used to cover staff costs and other liabilities.
“While Mad Street Den started with retail, they have built an omnibus platform for AI solutions across sectors, including financial services. M2P is planning an IPO and this will help them with an AI offering,” one of the persons cited above said. Both startups count Avatar as a common investor.
The source further said, "The capital raised by Mad Street Den wasn't commensurate with the growth. So raising future capital would have been a challenge.”
Founded in 2016 by Ashwini Asokan and Anand Chandrasekaran, Mad Street Den created AI-based solutions, through its Vue.ai business unit, that help retailers grow their business by reducing operational costs through automation and increasing revenue with personalised customer experiences.
The firm has an offering under Blox.ai which offers solutions like data management, Intelligent Document Processing, lead generation and more.
In 2023, Mad Street Den raised $30 million in its Series-C round led by Avatar Growth Capital, with participation from existing investors Sequoia Capital and Alpha Wave Global (formerly known as Falcon Edge Capital).
In 2019, MSD raised $17 million in a Series B round led by Falcon Edge Capital, with participation from investors Sequoia Capital India and Global Brain. The company had raised a total of $27.5 million till 2019.
Mad Street Den recently acquired INTURN, a New York-based enterprise solution that helps retailers monetise slow-moving and excess inventory, faster.
Previously known as Yap, M2P was founded in 2014 by Madhusudanan R, Muthukumar A and Prabhu R. Headquartered in Chennai, M2P Fintech is a API infrastructure platform that enables businesses in the banking, financial services, and fintech sectors to launch and scale various digital financial services.
It provides APIs that allow companies to integrate with banks, payment networks, and other financial institutions.
M2P acquisition comes just a few months after it received a large funding round of Rs 850 crore (around $102 million) led by Africa-based Helios Investment Partners through a mix of primary and secondary share capital. The new round will take the company’s valuation to around $800 million.
SaaS consolidation
The Software-as-a-Service (SaaS) industry is experiencing significant consolidation both globally and in India, driven by strategic mergers and acquisitions aimed at enhancing service offerings, expanding market reach, and integrating advanced technologies.
Eka Software, a Bengaluru-based commodity management SaaS provider, was acquired by private equity firm Insight Partners to bolster its global footprint.
Accel-backed Browserstack, a mobile and web software testing SaaS unicorn, on August 27 announced acquiring bug detection and reporting platform Bird Eats Bug for a total investment of $20 million, highlighting the increasing consolidation happening in the SaaS space.
Globally, notable SaaS acquisitions include Cisco Systems' announcement to acquire cybersecurity firm Splunk for $28 billion, aiming to enhance its data security portfolio.
Salesforce agreed to purchase data-security startup Own Co. for approximately $1.9 billion to strengthen its data protection services.
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