Amazon is set to acquire Indian buy-now, pay-later (BNPL) startup Axio, which marks a deeper dive into financial services in one of its fastest-growing markets.
The e-commerce giant has held an equity stake in Axio for six years and signed the acquisition agreement in December, following due diligence. Axio shared this development in a blog post, though financial details remain undisclosed. Sources close to the matter revealed that the deal exceeds US$150 million. Regulatory approval from India’s central bank for the transaction is still pending.
Axio’s journey and business model
Bengaluru-based Axio, previously known as Capital Float, has raised US$135 million from investors like Peak XV Partners, Ribbit Capital, and Elevation Capital. The startup specialises in providing credit solutions at the point of sale for major platforms such as Amazon and MakeMyTrip.
Axio’s model bridges the gap in a country where access to traditional credit remains limited due to low credit card penetration and the high costs of servicing small-ticket loans. Axio’s regulated lending platform evaluates creditworthiness swiftly, enabling decisions within “two clicks and five seconds.”
Axio boasts over 10 million customers and a loan book worth over US$260 million. The startup’s focus on self-employed individuals and households has helped it tap into a segment often overlooked by conventional banks.
Challenges in India’s BNPL market
Despite its innovative approach, Axio, like other startups in the sector, has faced hurdles in sustaining growth. Last year, Goldman Sachs-backed ZestMoney, operating in a similar niche, was valued at $450 million but eventually sold to DMI Group in a fire sale.
The BNPL space in India is competitive, with companies like Bajaj Finance dominating the market. Startups must navigate a landscape where regulatory compliance, customer acquisition, and profitability remain critical challenges.
Amazon’s growing investment in India
Acquiring Axio isn’t Amazon’s first venture into India’s startup ecosystem. In June, the company acquired MX Player, an on-demand video streaming platform. Over the years, Amazon has committed more than $10 billion to expand its presence in India, spanning e-commerce, entertainment, and financial services.
This deal signifies Amazon’s commitment to offering flexible payment solutions for Indian consumers, aligning with its broader strategy of making online shopping more accessible and inclusive.
