M1xchange

M1xchange is India’s leading RBI-licensed Trade Receivables Discounting System (TReDS) platform operating in the financial services and fintech sector, M1xchange serves a critical role in the digital transformation of supply chain finance, primarily targeting Micro, Small, and Medium Enterprises (MSMEs), large corporates, banks and Non-Banking Financial Companies (NBFCs).

Core Products and Services

• Digital Invoice Discounting & Factoring: M1xchange provides a secure, online marketplace where MSMEs can sell their trade receivables (invoices) to banks and NBFCs for immediate liquidity, bypassing the traditional delays in payment cycles.

• End-to-End Digital Process: The platform enables MSME suppliers to upload invoices, which are then validated by buyers (corporates). Multiple financiers bid for these invoices and upon acceptance, payment is processed within 24 hours-without the need for collateral.

• Small-to-Small (S2S) Financing: An innovative initiative that integrates tier 2 and tier 3 MSMEs into the formal credit system, further expanding the reach of digital supply chain finance.

Unique Value Proposition

• Collateral Free, Competitive Financing: MSMEs receive access to working capital at rates typically reserved for large corporates, reducing their cost of funds and mitigating credit risk.

• Digital Efficiency & Transparency: M1xchange’s robust IT infrastructure, digital signing, OCR technology and real-time dashboards streamline the entire invoice lifecycle, enhancing user experience and operational transparency.

• Financial Inclusion: The platform is recognized for driving financial inclusion by making supply chain finance accessible to even the smallest MSMEs across India.

Business Model & Revenue Streams

• Transaction-Based Fee Model: M1xchange earns revenue by charging a variable fee as a small percentage of the transaction value for each invoice discounted on its platform. This fee is typically borne by the MSME supplier or the financier, depending on the arrangement.

• Marketplace Commissions: As a digital exchange, M1xchange facilitates competitive bidding among multiple financiers for each invoice, ensuring the best rates for MSMEs and earning a commission per transaction.

• No Subscription or Advertising Revenue: The company’s primary monetization strategy is transaction-driven rather than through subscriptions or advertisements.

• Invoice Discounting Fees: The bulk of M1xchange’s income comes from fees charged on the value of invoices discounted through its platform.

• Value Added Services: The platform may offer additional services such as analytics, reporting and integration support, although the core revenue remains transaction-based.

Customer Segmentation

• B2B Focus: The platform caters exclusively to business clients, including MSMEs (sellers), large corporates (buyers), and financial institutions (financiers)

• Enterprise and MSME Onboarding: M1xchange has successfully onboarded over 50,000 MSMEs and 2,800+ corporates, with participation from more than 66 banks and NBFCs.

Growth Strategy:

• Market Expansion: Aggressively expanding its user base by onboarding more MSMEs and corporates, especially in tier 2 and tier 3 cities through initiatives like S2S financing.

• Product Innovation: Continuously developing new features and digital capabilities to enhance user experience and streamline supply chain finance.

• Strategic Partnerships: Collaborating with government agencies, corporates and financial institutions to boost adoption and trust in digital invoice discounting.

• Policy Advocacy: Leveraging government initiatives that lower the threshold for mandatory TReDS participation, thereby increasing the addressable market.