Amazon acquires Indian fintech company Axio in a credit push

Amazon has agreed to the acquisition Indian buy now pay later startup Axiodeepening its push into financial services in one of its fastest-growing markets as it seeks to expand access to credit for millions of underserved customers.

The US technology group, which has held a stake in Axio for six years, signed the acquisition agreement in December after completing due diligence, the Indian startup said in a blog post.

Financial terms were not disclosed. The Bengaluru-headquartered startup, formerly known as Capital Float, has raised $232 million from investors including Peak XV Partners, Ribbit Capital and Elevation Capital for equity and debt over the years.

The startup, which specializes in offering micro-credit to self-employed individuals and families at the point of sale on major e-commerce platforms including Amazon and MakeMyTrip, said it serves more than 10 million customers and has built a loan book of more than $260 million.

Axio is among a group of Indian startups operating in a market where traditional access to credit remains limited — India suffers from low credit card penetration, and traditional banks often find small loans unprofitable.

The startup has tried to address this gap by building a regulated lending platform that can quickly assess creditworthiness, making credit decisions “within two clicks and five seconds.” But like many other startups in this category, Axio has also struggled to sustain its growth. Goldman Sachs-backed ZestMoney, which operates in a similar business and was once valued at $450 million, has also struggled.It was eventually picked up by a traditional company in a cheap sale.

Axio is the second startup acquired by Amazon in India, having distributed over $10 billion so far. Amazon acquired On-demand video streaming service MX Player in June last year.