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8i Ventures, an early-stage venture capital fund, has made a partial exit of its seed investment in M2P Fintech at a 36X multiple clocking an IRR of 415% over 2 years.
M2P offers Banking-as-a-Service (BaaS) to over 500 fintech, along with non-banking financial companies (NBFCs), banks, and other financial service companies.
Following this partial exit of its seed shares in M2P, 8i Ventures, through its Fund I and affiliates, will continue to hold more than 75% of its original stake in the company. Fund I was launched in May 2019 and had its final close on July 31, 2021.
The size of the fund is $15.5 million, which comprises $13 million as assets under management (AUM) and another $2.5 million co-invest AUM.
8i Ventures’ Fund I is currently up 2.7X with an IRR of 122% and a Multiple On Invested Capital (MOIC) of 4X. Its portfolio already has three breakout winners in M2P Fintech, Slice, and Easebuzz. The basic focus of Fund I is to create new markets by removing friction between consumers and finance in India. The fund backs founders who are on a quest to unlock new markets by removing friction between consumers and finance in India.
The portfolio consists of investments in 13 ventures with 80% of investible capital invested/reserved for the current portfolio. The fund invests in start-ups, which are in Pre-seed to Series B stage, with cheque sizes ranging from $300,000 to $1.3 million.
8i Fund I has so far invested in fintech, consumer, and web 3.0. The fund’s portfolio has received follow-on investments from top global VCs including Tiger Global, Insight Partners, Flourish, Omidyar, and Beenext.
The valuation of M2P Fintech has grown by 60X to $600 million since 8i Ventures led its seed round in January 2020, attracting global investors such as Tiger Global and Insight Partners. M2P’s clients include category leaders like Slice, Uni, Lazypay, and Kodo. It has a presence in over 20 markets across Asia and North Africa, including India, Nepal, Egypt, United Arab Emirates, Bahrain, Philippines, Australia, and New Zealand.
Speaking on the development, Vikram Chachra, Founding Partner, 8i Ventures said, “M2P is a crown jewel in our portfolio. We took a small partial exit at a 36X multiple to demonstrate the robustness of our venture model. This small exit allows us to return a significant portion of our fund corpus within 3 years. We are grateful to M2P founders for choosing us as their seed venture capital.”
“We invested in M2P in the belief that it could eventually emerge as a foundational platform in India’s fintech economy. In reality, the company exceeded our 7-year revenue target in 2 years, while building an incredible 97% market share. We are great believers in the M2P and continue to hold more than 75% of our original stake, which will allow us to capture most of the remaining upside in the company’s growth in revenues and valuation,” Chachra added.
Commenting on the 8i’s partial exit, Madhusudanan R, Chief Executive Officer & Co-Founder, M2P Fintech said, “8i was the first VC fund to believe in M2P’s vision of building a world-class BaaS infrastructure platform for the world from India. They have backed us in every round from seed through Series B. They are more like co-founders than investors for us at M2P.”