Following an acquisition spree beginning earlier this year, Financial infrastructure provider M2P has launched its core lending stack as it bets big on providing lending application programming interface (API) infrastructure to banks and fintechs.
M2P will be now consolidating all its existing lending offerings, including card issuances and buy-now-pay-later (BNPL) infrastructure, under the new stack.
In an interaction with ET,
M2P Fintech cofounder and chief executive Madhusudanan R said the company expects 25% of its overall revenues to be coming from lending infrastructure to banks and non-banking finance companies (NBFCs) over the next 24-36 months. Banking and payment service offerings will contribute to 65% of the revenues.
In addition, M2P will also be leveraging solutions from its recent acquisitions, including identity verification platform, Syntizen; cloud-based lending platform Finflux and collection operation services provider, Origa.ai.
Through the consolidation of various solutions, M2P expects to provide a consolidated offering instead of having its clients partner with various loan management systems (LMS).
“We realised some banks and large financial institutions have four-five LMS because either they launched different products or their current LMS lacked the capabilities to support their new products. Today, lending products are not offered in an integrated fashion and that is where we saw an opportunity. An integrated approach will help lenders save time instead of finding and integrating with new LMS,” said Madhusudanan on the company’s reason to launch a core lending stack.
For the lenders, M2P’s core lending stack will provide a singular interface.
M2P’s launch comes at a time when the Reserve Bank of India (RBI) is keenly watching the digital lending space and had released operating guidelines last month to regulate the industry further.
“From a macro-level, the new digital lending guidelines are pointing out how different kinds of entities - traditional NBFCs or new age fintechs - will have to adopt digital lending as a core,” added Madhusudanan.
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 embed 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.