Summary:
Amazon has acquired Axio, an Indian buy now, pay later startup, to strengthen its financial services.
The deal is reportedly valued at over $150 million and awaits approval from the Indian central bank.
Axio serves over 10 million customers and has a loan book exceeding $260 million.
The startup addresses the credit gap in India, where traditional lending is limited.
Amazon has invested over $10 billion in India, marking its commitment to the region.
Amazon Acquires Axio: A Strategic Move in Fintech
Amazon has made headlines by agreeing to acquire Indian buy now, pay later startup Axio, further solidifying its presence in financial services within one of its fastest-growing markets. This acquisition marks a significant step as Amazon seeks to enhance its offerings in India, where it has already invested over $10 billion.
The acquisition agreement was finalized in December after thorough due diligence. While financial details remain undisclosed, sources indicate that the deal exceeds $150 million and is pending approval from the Indian central bank.
About Axio
Based in Bengaluru, Axio, formerly known as Capital Float, has raised $135 million from notable investors including Peak XV Partners, Ribbit Capital, and Elevation Capital. The startup specializes in providing small credit amounts to self-employed individuals and households at the point of sale, particularly on major e-commerce platforms like Amazon and MakeMyTrip. With a customer base exceeding 10 million, Axio has built a robust loan portfolio valued at over $260 million.
Addressing Credit Gaps in India
In a country where traditional credit access remains limited—characterized by low credit card penetration and unprofitable small-ticket loans for conventional banks—Axio aims to bridge this gap. The company has developed a regulated lending platform that can assess creditworthiness rapidly, enabling credit decisions to be made in just five seconds.
Despite its innovative approach, Axio faces challenges in maintaining growth, similar to other startups in this sector. For instance, ZestMoney, backed by Goldman Sachs and once valued at $450 million, struggled before being sold to a traditional firm in a fire sale.
Amazon's Commitment to India
This acquisition is Amazon's second in India, following its purchase of the on-demand video streaming service MX Player in June of the previous year. As Amazon continues to deepen its roots in the Indian market, the acquisition of Axio is poised to enhance its financial service capabilities significantly.
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