M1xchange: How Sundeep Mohindru is Revolutionizing MSME Finance Through TReDS
In the massive engine of the Indian economy, Micro, Small, and Medium Enterprises (MSMEs) are the essential cogs. Yet, these businesses often face a crippling paradox: they supply to the world's largest corporates but have to wait 60 to 90 days to get paid. This liquidity gap is estimated at a staggering ₹25 trillion. Sundeep Mohindru, Co-founder and CEO of M1xchange, is building the digital bridge over this gap. By pioneering the Trade Receivables Discounting System (TReDS) in India, Sundeep is ensuring that an MSME in a remote corner of Odisha can get their invoice paid in 24 hours at the interest rates of a multinational giant.
Sundeep Mohindru’s journey is a masterclass in professional evolution. A Chartered Accountant by training with over 20 years of experience, Sundeep founded **Mynd Solutions** in 2002 before identifying a systemic flaw in how Indian businesses manage credit. In 2017, inspired by a Reserve Bank of India (RBI) white paper, he launched M1xchange. Today, the platform has facilitated over **₹1.75 lakh crore** in discounting and is backed by global giants like **Amazon** and **BEENEXT**, proving that deep fintech innovation can solve one of society's most prominent problems.
The RBI White Paper Spark
In 2015, the RBI released a white paper discussing a successful invoice discounting model used in Brazil. Sundeep Mohindru saw this as the ultimate green-field project for India. While large financial institutions were hesitant, Sundeep’s technology-first approach convinced the RBI to grant M1xchange one of the first TReDS licenses in the country.
The Problem: The 'Collection Trap' for MSMEs
Most MSMEs suffer from two major hurdles: collection risk and expensive credit. When they supply to a large corporate, they have to "run after the customer" for their dues. Furthermore, if they need working capital, banks often analyze the MSME's own weak balance sheet, leading to high interest rates or rejected loans. This limits their ability to take new orders and grow.
"We realized that the risk shouldn't be on the MSME," Sundeep explains. "The risk is actually on the corporate buyer who owes the money. We wanted to build a platform where the MSME gets funded based on the corporate's credit rating, bringing their cost of capital down from 18% to as low as 6%."
The Solution: The TReDS Bidding Engine
M1xchange acts as a digital exchange where three stakeholders—MSMEs, Corporates, and Banks—interact in a seamless, automated loop. It turns a piece of paper (an invoice) into a liquid financial asset that 40+ banks compete to fund.
The Invoice Discounting Lifecycle
- Upload: The MSME uploads a digital invoice on the M1xchange platform.
- Validation: The large corporate buyer validates that the goods/services were received and the due date is correct.
- Live Bidding: 40+ public and private sector banks see the validated invoice and bid to discount it.
- Acceptance: The MSME selects the best (lowest interest) bid with one click.
- Instant Payout: Funds are transferred to the MSME’s account by the next morning (8:00 AM to 11:00 AM).
- Auto-Settlement: On the due date, M1xchange automatically collects the payment from the corporate and pays the bank.
Scaling through Crisis: The IL&FS and COVID Tests
M1xchange’s growth wasn't without hurdles. In 2019, the IL&FS crisis caused a massive liquidity crunch in the Indian economy, causing bank funding to dry up overnight. Sundeep and his team had to pivot their customer mix, focusing on double-A and triple-A rated corporates to maintain platform stability. Then, in 2020, the pandemic forced them to make the entire onboarding process 100% digital, as physical document collection became impossible.
"Crisis is a test of your infrastructure," Sundeep notes. "Because we had transitioned to a digital-first model two years before the pandemic, we didn't stop lending. We actually grew 40% month-over-month during the lockdowns, helping MSMEs survive when traditional branches were closed."
M1xchange Impact Scale
- ₹1.75 Lakh Crore+: Total invoice volume facilitated on the platform to date.
- 50,000+ MSMEs: Onboarded from over 600 cities across India.
- 40+ Banks: Including all major public and private sector participants.
- ₹1,000 Crore/Month: Current monthly volume, scaling toward a ₹1 lakh crore annual target.
Lessons in Leadership: Freedom to Innovate
For Sundeep, building a team of 110 people started with attracting talent from the very industry he was disrupting: banking. He emphasizes the importance of "transparency" and "freedom to operate." He believes that a founder's job is to define the vision—fighting for the MSME cause—and then let the team find the innovative digital paths to get there.
"The team can do better than you if you give them the space," he admits. "We empower our people to take manual processes and make them digital. That sense of ownership is why we've been able to replace senior leadership gaps and continue our trajectory without missing a beat."
Founder's Lesson: Knock on 3 Doors
Sundeep believes in the power of persistence. "If you knock on three doors in a honest and confident manner, at least one will open. Whether it's convincing a bank to take a risk or an investor to partner, you have to be fearless and stay the course."
The Future: Blockchain and Beyond
Sundeep’s vision for M1xchange is to become a "household brand" for every business desk in India. He is already looking at integrating **Blockchain** for duplicate invoice checks and future **Tokenization** of trade receivables. For Sundeep, the goal is simple: to ensure that the "Show" always goes on for India's small businesses, powered by the most efficient capital in the world.
M1xchange is proving that the future of finance is a digital exchange. By democratizing access to capital and taking the risk out of collections, Sundeep Mohindru and his team are ensuring that for the Indian MSME, the next growth phase is just an invoice away.
About the Guest
Sundeep Mohindru is the Co-founder and CEO of M1xchange. A Chartered Accountant with over two decades of industry experience, Sundeep is a pioneer in the Indian TReDS and supply chain finance landscape. Before M1xchange, he founded Mynd Solutions, a leading business process outsourcing firm. He is a passionate advocate for MSME empowerment and has worked closely with the RBI and Ministry of Finance to shape the digital lending ecosystem in India.
M1xchange is an RBI-licensed TReDS platform that provides digital invoice discounting services to MSMEs. By connecting suppliers, corporate buyers, and financiers on a single platform, M1xchange enables businesses to access low-cost working capital and solve liquidity challenges through a transparent, market-driven bidding process.