TReDS platform M1xchange, promoted by Mynd Solutions, has received Rs 38 crore funding from its existing shareholders IndiaMART and BEENEXT, picking up additional stakes in the company.
This marks the exit of an early investor -- India Opportunities Fund of SIDBI Venture Capital Ltd -- allowing IndiaMART to acquire an additional 3.4 per cent stake and BEENEXT 1.99 per cent, the company said in a release on Tuesday.
Trade Receivables Discounting System (TReDS) is a digital marketplace to sell receivables of Micro, Small and Medium Enterprises (MSMEs) from corporate and other buyers, including government departments and Public Sector Undertakings (PSUs), to banks/financial institutions.
TReDS came alive under the Reserve Bank of India's guidance with the intent to remove constraints MSMEs face in obtaining adequate finance, particularly in their ability to convert their trade receivables into liquid funds.
"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," Sundeep Mohindru, CEO of M1xchange, said.
He said that banks have also benefitted from M1xchange as this has opened new avenue of business for them. The repayments of trade receivables financed is fully digital and the default on repayments is negligible.The company has discounted invoices of over 13,000 MSMEs spread over 1,250 towns, totalling over Rs 34,000 crore.