Filter Capital Invests $10 million (INR 84 cr) in M1xchange to Back the Digital Transformation of Supply Chain Finance for MSMEs in India

12th May 2025: Filter Capital, a growth-stage investment firm targeting technology-led businesses in India, has acquired approximately $10 million (84 Cr) worth of stake in M1xchange, India’s leading Trade Receivables Discounting System (“TReDS”) platform. This investment, made through a secondary transaction, highlights Filter Capital’s belief in the potential of digital supply chain finance in driving financial access for India’s micro, small and medium-sized businesses (“MSMEs”).

India’s supply chain finance sector is witnessing accelerated growth, driven by the need for faster working capital access for MSMEs and digital transformation across industries. With the RBI’s TReDS framework, digital platforms are increasingly becoming the backbone of MSME financing. Amid this evolution, M1xchange, set up by Sundeep Mohindru and Vivek Misra, has emerged as a category- defining player—facilitating invoice financing of nearly ₹10,000 crore ($1.2 billion) each month, empowering MSMEs with faster access to working capital and driving adoption across corporates, vendors, and financial institutions.

“This marks an important milestone in M1xchange’s journey of innovation, technology-led growth, and financial inclusion. The values of Filter Capital are closely aligned with ours – long-term thinking, a customer-first execution approach, and a strong understanding of scaling technology-first businesses. The investment by Filter Capital reinforces our vision of building a digitally empowered, transparent, and comprehensive bouquet of supply chain finance ecosystem for MSMEs and Enterprises in India. We remain committed to driving financial access for MSMEs and creating long-term value for our stakeholders,” said Sundeep Mohindru, Founder and CEO of M1xchange.

To date, M1xchange has facilitated over ₹1.75 lakh crore, or $20 billion, of invoice discounting. The platform has witnessed a 100% YoY growth and has a base of 50,000+ MSMEs and 2,800+ corporates with over 66 banks and NBFCs.

“M1xchange has consistently demonstrated the ability to keep innovating, while delivering revenue growth coupled with financial discipline. They have built a scalable, three-sided exchange with network effects and a clear win-win proposition for all stakeholders,” said Zareer Shroff, Principal at Filter Capital. “We are proud to partner with a team that is leading the charge in modernizing supply chain finance.”

“India has over 60 million MSMEs that contribute nearly 30% to the country’s GDP, yet this segment remains severely underserved when it comes to access to formal credit,” added Nitin Nayar, Co- Founder and Managing Partner at Filter Capital. “The Company has built a unique platform addressing this gap, and we believe this team is strongly positioned to drive meaningful and scalable impact.”

About M1xchange

M1xchange is a TReDS (Trade Receivables Discounting) exchange that started in April 2017. M1xchange facilitates the financing of trade receivables of MSMEs from corporate buyers through ‘factoring’ or ‘invoice discounting’ by financiers (Banks and NBFC). In a short span of time, M1xchange has onboarded 65+ Banks, 2,800+ corporates, and 50,000+ MSMEs and has facilitated discounting of invoices of more than Rs 1,75,000 Crores ($20 billion). Transactions on the TReDS platform happen digitally and start when the MSME Supplier of Goods & Services raises the invoice, and the Buyer validates the same. This permits the financiers (Banks/ NBFCs) to bid against the verified and approved invoice. Once the supplier accepts the bid, the payment is processed in 24 hours and credited to the MSMEs bank account. Through this platform, M1xchange promises MSMEs “greater access to finance" at competitive rates and without providing any collateral. Further, the financing is without recourse. MSMEs pass on the risk of receivables to the financiers (NBFCs/Banks) by selling their receivables.