m2p: Financial infrastructure startup M2P is betting big on lending and launching a core lending stack

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After a flurry of acquisitions that began earlier this year, the M2P financial infrastructure provider has launched its core lending stack as it bets big on delivering application programming interface infrastructure (API) lending to banks and fintechs.

M2P will now consolidate all of its existing lending offerings, including card issuance and buy-it-now-pay-later (BNPL) infrastructure, under the new stack.

In an interaction with ET, M2P Fintech co-founder and managing director Madhusudanan R said the company expects 25% of its overall revenue to come from lending infrastructure to banks and non-bank financial companies (NBFC ) over the next 24 to 36 months. Banking and payment service offerings will contribute 65% of revenue.

In addition, M2P will also leverage solutions from its recent acquisitions, including identity verification platform, Syntizen; Finflux cloud-based lending platform and collection operation service provider, Origa.ai.

Through the consolidation of various solutions, M2P plans to provide a consolidated offering instead of tying its customers to various loan management systems (LMS).

“We realized that some banks and large financial institutions had four to five LMSs, either because they had launched different products or because their current LMS lacked the capabilities to support their new products. Today, loan products are not offered in an integrated way and that is where we saw an opportunity. An integrated approach will help lenders save time instead of finding and integrating with a new LMS,” Madhusudanan said on why the company launched a basic loan stack.

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For lenders, M2P’s basic lending stack will provide a single interface.

The launch of M2P comes at a time when the Reserve Bank of India (RBI) is carefully monitoring the digital lending space and issued operational guidelines last month to further regulate the industry.

“At the macro level, the new digital lending guidelines outline how different types of entities – traditional NBFCs or new-age fintechs – will need to embrace digital lending as their core,” Madhusudanan added.

M2P already works with a base of 85 NBFCs and the top 10 Indian banks. It plans to roll out its upgraded stack to these financial service providers.

Founded in 2014 by Madhusudanan R, Muthukumar R and Prabhu Rangarajan, M2P is an application programming interface (API) infrastructure company that helps businesses integrate financial services.

Earlier in January, M2P Fintech raised $56 million led by New York-based global private equity firm Insight Partners, valuing the startup at $600 million. The round also saw participation from MUFG Innovation Partners, Tiger Global and Better Capital.

In October 2021, the company also raised $35 million from Tiger Global.

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