E-commerce giant Amazon is on the brink of acquiring online lending platform Axio (formerly Capital Float) in a deal valued between $150 million and $175 million. This acquisition marks Amazon’s second foray into the Indian fintech space, following its acquisition of Emvantage. Two sources familiar with the matter confirmed the development to Entrackr.
“The terms of the deal have been finalized, and Amazon is currently conducting due diligence,” said one source, who requested anonymity.
Amazon, which already holds an 8% stake in Axio following its participation in the platform’s Rs 144 crore Series C round in 2018, plans to utilize Axio to power its buy now pay later (BNPL) service for Amazon Pay. This strategic move is expected to significantly enhance Amazon’s financial services offerings in India.
“The acquisition makes absolute sense for both companies as they are over-dependent on each other. Over 80% of Axio’s volume comes from Amazon, while the e-commerce major’s BNPL is largely powered by Axio,” said another source, who also wished to remain unnamed.
Besides Amazon, Axio counts Decathlon and Xiaomi among its partners. The Bengaluru-based platform has provided credit to 9 million customers to date. In 2018, Axio acquired Walnut, an Elevation-backed financial management app, for about $30 million.
Sources indicate that Amazon initially invested in Axio at a valuation of approximately $350 million in 2018, suggesting that the current deal may not be highly lucrative for Axio’s investors and stakeholders.
In its financial performance, Axio reported a 2x growth in revenue, reaching Rs 220 crore in FY23 compared to Rs 110 crore in FY22. However, the company’s losses also increased marginally to Rs 137 crore during the same period. Axio has yet to disclose its FY24 numbers.
This acquisition follows Amazon’s purchase of MX Player’s assets in May to bolster its Mini TV offerings in India, highlighting Amazon’s continued investment in expanding its digital ecosystem in the country.
Source: Entrackr
