Amazon has agreed to acquire the Indian buy now pay later startup Axio, deepening its push into financial services in one of the fastest-growing markets as it seeks to expand access to credit for millions of underserved customers. The US technology group, which has held an equity 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, but a source familiar with the matter told TechCrunch that the size of the deal was more than $150 million. The Bengaluru-headquartered startup, formerly known as Capital Float, has raised $232 million from investors including Peak XV Partners, Ribbit Capital, Elevation Capital against equity and debt over the years. The startup, which specializes in providing small-scale credit to self-employed individuals and households at the point of sale on major e-commerce platforms including Amazon and MakeMyTrip, says it serves more than 10 million customers and has built a loan book of more than $260 million. Axio is one of a group of Indian startups operating in a market where access to traditional credit remains limited – India has low credit card penetration, and conventional banks often find small-ticket loans unprofitable. The startup is trying to overcome this gap by building a regulated lending platform that can quickly assess creditworthiness, making credit decisions “in two clicks and five seconds.” But like many other startups in the category, Axio has also struggled to maintain its growth. Goldman Sachs-backed ZestMoney, which operates in the same space and was once valued at $450 million, also struggled and was eventually selected by traditional companies in a fire sale. Axio is the second startup acquired by Amazon in India, which has raised more than $10 billion so far. Amazon acquired its on-demand video streaming service MX Player in June last year.
