Amazon has finalized plans to acquire Axio, an Indian buy-now, pay-later startup, further solidifying its presence in the financial services sector within one of its rapidly expanding markets.
The e-commerce giant, which has held an equity investment in Axio for the past six years, officially signed the acquisition agreement last December after conducting thorough due diligence, as mentioned in a recent blog post from the Indian startup.
While the financial specifics of the agreement have not been revealed, sources familiar with the situation informed TechCrunch that the deal exceeds $150 million. This transaction is pending approval from the Reserve Bank of India.
Based in Bengaluru, Axio, previously known as Capital Float, has successfully raised $135 million from various investors over the years, including Peak XV Partners, Ribbit Capital, and Elevation Capital.
Axio focuses on extending credit to self-employed individuals and households at the point of sale across major e-commerce platforms like Amazon and MakeMyTrip. It boasts a customer base of over 10 million, with a loan portfolio valued at more than $260 million.
Operating in a market where access to conventional credit is often restricted, Axio and similar startups face challenges due to low credit card usage in India and the fact that traditional banks typically view small-ticket loans as unprofitable.
To tackle this issue, Axio has developed a regulated lending platform capable of quickly evaluating customers’ creditworthiness, enabling them to make credit decisions in just “two clicks and five seconds.”
However, like many startups in the industry, Axio has encountered difficulties in sustaining its growth. ZestMoney, backed by Goldman Sachs and operating in a similar field, was once valued at $450 million but struggled and was sold to financial services firm DMI Group during a fire sale last year.
Axio competes with Bajaj Finance, a major player in the Indian financial services market.
This acquisition marks Amazon’s second in the Indian startup ecosystem in the last year—it previously acquired MX Player, an on-demand video streaming service, in June. The tech titan has invested over $10 billion in India to date.
Compiled by Techarena.au.
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