M2P Fintech in funding talks with Insight Partners a week after Tiger Global-led round
If the financing goes through, M2P Fintech’s valuation is expected to double from $335 million now, within a few weeks, the people said.
Last week, M2P Fintech
had announced a funding round led by New York-based investment firm Tiger Global, signalling the frenetic dealmaking among Indian startups — especially in sectors like fintech where
companies are racking up back-to-back financing that have either doubled or tripled their valuations within months.
What is working for M2P Fintech is the revenue traction it has been able to pull off. Sources said the Chennai-based company is clocking an annualised revenue of around $20 million currently.
“They have grown four times in the last one year and are on track to clock $20 million in revenue. Insight is in the final stages of negotiations to lead the financing round,” a person aware of the ongoing discussions said.
New York-based Insight Partners has backed startups like Apna.co, BharatPe, Chargebee, BrowserStack and Atlan as it increasingly eyes the Indian tech market. The VC fund has become aggressive over the last year or so and is now being viewed as a direct competitor to Tiger Global in terms of the pace at which it is closing deals in the US.
Silicon Valley tech publication The Information reported that Insight
was looking to close a fresh $16 billion fund, its largest ever corpus, on the back of record deals. According to the report, Insight was the third most active VC investor in the US market behind Tiger and Andreessen Horowitz, in more mature businesses, according to Pitchbook data.
While discussions have progressed with M2P Fintech, Insight has also been in talks with multiple other fintech startups across different stages, sources aware of the matter said.
When contacted by ET, M2P’s cofounder Madhusudanan R did not offer comment on the capital-raising talks. “We are extremely well-capitalised, and we will look at fundraising as the need arises,” he said.
Insight Partners did not respond to ET’s email seeking comment till press time Monday.
Fintech on fire
The fundraising talks at M2P Fintech are a reflection of the broader investment activity in India’s startup ecosystem, which has aided the birth of 31 new unicorns this year. Unicorns are privately held companies valued at $1 billion or more.
A founder of another fintech startup, which recently raised a significant amount of capital from new investors, said it had also begun early discussions for another round of funding. “There is still a lot of interest in fintech, and I couldn’t accommodate many investors in the last round. Now, they are willing to join the next round at a higher valuation,” the founder, who did not wish to be named, said.
PwC India, in a report released on Monday, said that
$4.6 billion was invested in India’s financial technology industry in the first nine months of this year. Compared to the same period a year ago, this is a nearly fourfold increase.
Founded in 2014 by Madhusudanan R, Muthukumar R and Prabhu Rangarajan, M2P
was nominated in the Top Innovator category at the Economic Times Startup Awards 2019. It counts Beenext Pte, Flourish Ventures, Omidyar Network India, 8i Ventures, Better Capital and the DMI Group’s Sparkle Fund among existing investors. Last week, M2P Fintech said the platform
was processing more than $10 billion in annualised payments with over 500 fintech partners.
The startup is looking to expand beyond Asia on the back of new capital infusion. Besides India, it operates in Nepal, the UAE, Australia, New Zealand, the Philippines, and Egypt.
ET reported at the time of Tiger Global’s funding announcement that M2P was looking to expand to markets like Indonesia, Bangladesh, Vietnam as well as the Middle East and North Africa (MENA) region.
The fintech API (application programming interface) space has seen increased demand over the last 12-18 months. Even neobanking startups like Open are looking to build their API services for banks, fintech firms and other partners.