Chennai-based financial technology start-up M2P Fintech is acquiring AI start-up Mad Street Den (MSD) in an undisclosed stock and cash deal. The valuation details of the deal, which brings together two marquee Chennai start-ups, remain undisclosed.
However, sources involved in the transaction note that US-headquartered MSD had a new funding round on cards, but it then decided to go the M&A route and run a formal process to discover partners. They had various suitors from the US, but MSD chose to align with M2P Fintech for the sake of “a cultural fit” and Indian connection, the source said.
Responding to businessline’s queries, founders of M2P Fintech and Mad Street Den said the process of closing the deal is still underway, and they will not be able to share specifics of valuation. But, the two companies clarified that the deal “is valued way higher and in multiples of what is being quoted.”
“It is the perfect complimentary synergy story of India’s first AI start-up and India’s largest BFSI infra start-up. This decision for both of us comes from putting our customers first and driving an AI-first, a data-first offering to them. We realized we had so much overlap in our customer base and the joint offering is unlike anything seen in the market today,” Mad Street Den co-founder Ashwini Asokan and M2P Fintech co-founder Madhusudanan R said.
Ashwini Ashokan
MSD is one of India’s earliest AI start-ups, founded by husband-wife duo Anand Chandrasekaran and Ashwini Ashokan. The duo returned to India from the US to start the venture out of Chennai in 2016. MSD then launched its proprietary general-purpose AI platform Vue.ai , before the term “AI” took over boardrooms. Vue.ai powers Fortune 500 enterprises across the retail, banking, finance, insurance and logistics and other sectors. It serves as the stack on top of which these enterprises build vertically integrated platforms relevant to their industry. Today it competes with the likes of Palantir and Databricks. The start-up has raised over $57 million till date across various funding rounds. Its last funding round was around $30 million in 2022.
As for M2P, the fintech start-up co-founded by three friends and techies, Madhusudanan R, Muthukumar R and Prabhu Rangarajan, is in an expansion mode, having raised $100 million in a recent round. The start-up’s technology stack powers the core banking system, core lending suites, BNPL, Credit, Debit, & Prepaid cards, and UPI, among others. M2P’s clients include financial services and other firms across India, the Middle East, Africa and South East Asia.