STARTUP-STORIES

M2P Fintech Nears Unicorn Status with $80 Million Funding Round Led by Helios Investment Partners

SUMMARY

1. M2P Fintech is raising $80 million in a funding round led by Helios Investment Partners, with participation from Bank Muscat. The round includes primary and secondary transactions, and Helios will acquire a 6.5% stake for $50 million.

2. Post-funding, M2P Fintech’s valuation will reach $850-$900 million, nearing unicorn status. The company is focusing on expanding its banking software services in the Middle East and Africa, with key investors like Beenext and early angel investors participating in the round.

M2P Fintech, a leading software services provider for banks, is on the verge of closing a new funding round, raising approximately $80 million through a combination of primary and secondary transactions. This round is led by Helios Investment Partners, an Africa-focused investment firm, with participation from Bank Muscat.

Helios to Invest $50 Million for a 6.5% Stake

According to filings with the Registrar of Companies, Helios is set to invest $50 million, acquiring a 6.5% stake in the Chennai-based fintech. Alongside Helios, some existing investors of M2P Fintech are also participating in this funding round. Early investor Beenext and a few angel investors are reportedly looking to sell part of their stakes.

Once this round is completed, M2P Fintech's valuation is expected to rise to between $850 million and $900 million, inching the company closer to unicorn status, a milestone for startups valued at over $1 billion.

Expanding into the Middle East and Africa

M2P Fintech, which provides a comprehensive software stack for core banking, debit card solutions, and credit operations, is increasingly focusing on global expansion, particularly in the Middle East and Africa. Helios’ involvement is crucial to this growth strategy, and some major lenders in the Middle East are also showing interest in acquiring stakes in the company.

"M2P is focused on building its business outside India, and the Middle East and Africa markets are key areas of focus," said a person familiar with the developments.

Previous Funding and Strong Investor Base

In January 2022, M2P Fintech raised $56 million in a funding round led by Insight Partners, Better Capital, and Tiger Global Management, which valued the company at $600 million. This latest round, led by Helios, reflects M2P's consistent growth and its move towards becoming a unicorn.

The company is backed by a strong lineup of investors, including Flourish Ventures, Omidyar Network India, 8i Ventures, and DMI Group’s Sparkle Fund.

Financial Performance and Challenges

Despite its rapid growth, M2P Fintech faces financial challenges. According to Tracxn, the company reported a net loss of ₹134 crore on a revenue of ₹488 crore in fiscal 2023. However, its aggressive expansion strategy and growing market presence are expected to bolster its financials in the coming years.

About M2P Fintech

Founded in 2014 by Madhusudanan R, Muthukumar R, and Prabhu Rangarajan, M2P Fintech has emerged as a key player in the fintech industry, providing essential software services to banks. The company was nominated in the Bootstrap Champ category at The Economic Times Startup Awards 2019 and continues to be a leader in the fintech ecosystem.

As M2P Fintech approaches the unicorn club, this latest funding round underscores its potential to become a global leader in banking software services, particularly in emerging markets.