M2P builds war chest for acquisitions with ₹850 cr funding from Helios, others | Mint

M2P Fintech is building a war chest for acquisitions, founder and chief executive officer (CEO) Madhusudanan R. said, after the software-as-a-service (Saas) startup raised ₹850 crore in a funding round led by Helios Investment Partners, half of which would go towards buying companies.

“We need to look at some markets where we may need to intervene to contribute more quickly. This could lead to higher investment or cash deployment. I would estimate that more than half of the money will be allocated for acquiring companies,” Madhusudanan told Mint.

The fundraise, a mix of a primary and secondary share sale, now values the company at over ₹6,550 crore. M2P’s existing investor Flourish Ventures also participated in the round.

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The Chennai-based company, which provides software services to banks, is looking for acquisitions to expand its business both in India and overseas, with a focus on Africa.

Founded in 2014 by Muthukumar A., Prabhu R., and Madhusudanan as an API (application programming interface) infrastructure company, M2P has evolved into a banking-as-a-service company for banks, lenders, fintech and consumer technology companies.

“In 2024, we generated close to 60% of our revenue from India and about 40% from the rest of the world. Over the next two to three years, we expect India to remain a key market, contributing significantly at about 40%,” said Madhusudanan.

He added that while international revenues are growing faster, India is a large market and will continue to lead as a revenue driver for the company.

The company is also eyeing strategic expansions into select countries in the Association of Southeast Asian Nations (Asean) region and the Middle East. M2P Fintech operates in over 30 markets across the Asia Pacific, Middle East and North Africa (MENA), and Oceania regions.

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M2P Fintech has so far raised close to $200 million from investors like Tiger Global, Better Capital and MUFG Innovation Partners, a corporate venture capital arm of Mitsubishi UFJ Financial Group Inc (MUFG).

The company provides services across core banking systems; core lending solutions; BNPL (buy now, pay later); credit, debit and prepaid cards; UPI and advanced data capabilities, among others. With the new investment, M2P aims to expand its technology stack and introduce artificial intelligence solutions.

M2P Fintech’s revenue soared to ₹440.7 crore in FY23 from ₹194.74 crore in FY22, and ₹41.89 crore in FY21 . The company’s loss, however, more than tripled to ₹134.26 crore in FY23 from ₹40.08 crore in FY22.

“In FY24, in the first two quarters, we lost money. In the next two quarters, we made money again. So, overall for the full year, FY24 continues to be loss-making but FY25 is when we expect to see profitability, or at least an increase in cash profitability,” said Madhusudanan.