Amazon to Acquire Axio: A Strategic Move in India's Fintech Space

E-commerce behemoth Amazon has announced its agreement to acquire Axio, a Bengaluru-based digital lending startup previously known as Capital Float. This acquisition, valued at approximately $160 million, is a significant step in Amazon's strategy to bolster its financial service offerings in India.

Founded in 2013, Axio has revolutionized the way individuals access credit, offering pay-later options and credit facilities at various terminals, with Amazon being the most prominent. Operating under a non-banking finance company (NBFC) license, Axio has facilitated loans both through its own books and via co-lending partnerships with banks and other NBFCs.

Deal Structure and Future Prospects

The deal's enterprise value is currently estimated between $150-160 million, with the final amount contingent on Axio meeting specific milestones. While Axio has remained tight-lipped about the deal's specifics, it has confirmed that due diligence was completed in December, and the transaction now awaits regulatory approvals.

Amazon's spokesperson revealed that Axio has applied to the Reserve Bank of India for a change in control to Amazon, marking the culmination of a six-year partnership focused on providing accessible and affordable credit to customers across India.

Impact on India's Financial Services Sector

With over 10 million customers, assets under management of Rs 2,200 crore, and a gross non-performing assets (GNPA) ratio of 3%, Axio's acquisition by Amazon is poised to significantly impact India's financial services landscape. This move aligns with Amazon's broader strategy to reach underserved customers and diversify its offerings, enhancing customer experience and risk management.

Axio, co-founded by Sashank Rishyasringa and Gaurav Hinduja, has previously raised $20 million from Amazon Smbhav Venture Fund and over $130 million in equity, alongside $670 million in debt, from investors including Lightrock India, Peak XV Partners, Elevation Capital, and Ribbit Capital.