M2P Fintech, a Chennai-based digital banking infrastructure startup, has raised Rs 35 crore in debt funding from Anicut Capital. This marks the first debt financing round for the company, which has been steadily growing its suite of financial products and services since its inception in 2014. The infusion of capital is expected to significantly enhance M2P’s operational capabilities and support its expansion plans.
M2P Fintech, known for its comprehensive digital banking infrastructure, has made a strategic move to raise Rs 35 crore through the issuance of 350 non-convertible debentures (NCDs) at an issue price of Rs 10,00,000 each. The decision to opt for debt financing reflects the company’s intent to leverage additional financial resources without diluting equity, thereby maintaining control over its strategic direction and operations.
Founded in 2014, M2P Fintech offers a range of financial services including core banking and loan management systems, payment tools, and embedded finance solutions. The company’s innovative payment solutions account for 60% of its revenue, while the remaining 40% comes from its core banking business and value-added services (VAS). With over 1,200 organizations, including banks, fintech companies, and businesses using its solutions, M2P has positioned itself as a critical player in the digital finance ecosystem
The recent funding round comes after a successful Series C equity round in January 2022, where M2P Fintech raised $56 million at a valuation of $600 million. This round was led by Insight Partners, with participation from Tiger Global Management, MUFG Innovation Partners, and others. The equity round significantly bolstered M2P’s valuation and provided the necessary capital to fuel its expansion and acquisition strategy.
M2P Fintech has been actively expanding its API infrastructure through strategic acquisitions. In December 2023, the company acquired Goals101, a firm specializing in transaction behavioral intelligence, for Rs 250 crore in cash and equity. Other notable acquisitions include the identity validation startup Syntizen and the debt recovery startup Origa.ai. These acquisitions have been instrumental in enhancing M2P’s service offerings and operational capabilities .
Despite its rapid growth, M2P Fintech has faced challenges in maintaining profitability. The company reported a significant increase in revenue, spiking 4.6 times to Rs 194 crore in FY22. However, this period also saw its losses balloon by 6.2 times to Rs 41 crore. This dichotomy underscores the aggressive investment strategy and the inherent risks of scaling a fintech startup.
Conclusion:
The Rs 35 crore debt funding from Anicut Capital is a pivotal development for M2P Fintech, providing the financial leverage needed to accelerate its growth and expansion in the digital banking sector. By opting for debt financing, M2P aims to sustain its innovative edge while minimizing equity dilution. This strategic move highlights the company’s commitment to enhancing its service offerings and solidifying its position as a leader in the fintech industry.
