Amazon acquires Indian fintech firm Axio to expand credit services
What's the story
Amazon has announced its acquisition of Axio, an Indian 'buy now pay later' start-up.
The deal comes as part of the tech giant's plan to broaden its financial services in India, one of its most rapidly expanding markets, and extend credit facilities to millions of underserved customers in the country.
Acquisition details
Amazon's long-standing relationship with Axio
The deal was signed in December after a comprehensive due diligence process, Axio revealed today in a blog post.
Amazon had an equity stake in Axio for six years before this acquisition. The deal's financial terms have not been disclosed.
Axio, formerly Capital Float, is headquartered in Bengaluru and has raised $232 million from investors like Peak XV Partners, Ribbit Capital, and Elevation Capital over the years.
Market impact
Axio's role in India's credit market
Axio specializes in providing small-sized credit to self-employed individuals and households at the point of sale on leading e-commerce platforms, including Amazon and MakeMyTrip.
The start-up caters to over 10 million customers and has developed a loan book of more than $260 million.
Amazon's acquisition highlights the potential of start-ups like Axio, which operate in markets where traditional credit access is limited due to low credit card penetration and unprofitability of small-ticket loans for conventional banks.
Credit solution
Axio's innovative credit assessment platform
Axio has built a regulated lending platform that can assess creditworthiness in a matter of seconds, making credit decisions "within two clicks and five seconds."
The solution is an innovative way to bridge the gap in traditional credit access.
However, just like many other start-ups in this space, Axio has struggled to sustain its growth.
Investment history
Amazon's previous acquisitions in India
Notably, Axio is the second start-up Amazon has acquired in India, after it bought on-demand video streaming service MX Player in June last year.
So far, the US-based tech giant has invested over $10 billion in the country.
This latest acquisition of Axio highlights Amazon's commitment to expanding its services and reach within the Indian market.