Amazon Deepens Financial Services Push with Axio Acquisition
A Strategic Move in India‘s Growing Fintech Landscape
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In a significant development that underscores its commitment to the burgeoning fintech sector, Amazon has acquired Indian buy now pay later (BNPL) startup Axio. This strategic move follows a six-year equity stake held by Amazon and comes after due diligence was completed in December. While the financial terms remain undisclosed, sources indicate the deal surpasses $150 million and awaits approval from the Indian central bank.
Axio: A Rising Star in India’s Financial Inclusion Story
Based in Bengaluru, Axio (formerly known as Capital Float) has secured over $135 million in funding from prominent investors like Peak XV Partners, Ribbit Capital, and Elevation Capital. The company specializes in providing small-scale credit to self-employed individuals and households at the point of sale across major e-commerce platforms, including Amazon and MakeMyTrip. Axio boasts a customer base exceeding 10 million and has facilitated a loan book surpassing $260 million.
Axio’s emergence addresses a critical gap in India’s financial landscape. Traditional credit access remains limited due to low credit card penetration and the unprofitability of small-ticket loans for conventional banks. Axio leverages a regulated lending platform that rapidly assesses creditworthiness, enabling credit decisions within seconds. This innovative approach empowers individuals who might otherwise struggle to access traditional financing options, contributing significantly to financial inclusion in India.
Despite its success, Axio, like many other startups in the BNPL sector, has faced challenges maintaining growth. Goldman Sachs-backed ZestMoney, operating in a similar space and once valued at $450 million, ultimately underwent a fire sale acquisition by a traditional firm. This highlights the competitive pressures and evolving dynamics within the BNPL market.
However, the BNPL sector continues to evolve rapidly, with increasing consumer adoption and technological advancements driving innovation. Axio’s integration with Amazon’s vast e-commerce platform and its established customer base positions it well to navigate these challenges and capitalize on emerging opportunities.
Amazon’s Continued Investment in India: A Focus on Growth and Innovation
This acquisition marks Amazon’s second startup purchase in India, where it has invested over $10 billion to date. In June 2023, Amazon acquired on-demand video streaming service MX Player, demonstrating its commitment to expanding its footprint and offerings within the Indian market.
Amazon’s strategic acquisitions and investments in India reflect its ambition to become a dominant player in the country’s rapidly growing digital economy. The acquisition of Axio positions Amazon to further capitalize on the increasing demand for accessible financial services, particularly among underserved populations. This move aligns with Amazon’s global strategy of leveraging technology to empower individuals and drive economic growth.
