E-commerce behemoth Amazon acquires Bengaluru-based digital lending business Axio (formerly Capital Float). The purchase, which is pending regulatory permissions, was completed in December following due diligence.
The founders of Axio said, “In December, after successful completion of due diligence, we signed an agreement with Amazon for a proposed acquisition of Axio. The transaction will now await the required regulatory approvals.”
The founder added, “The proposed acquisition aims to build on a successful six-year business and equity partnership centered around delivering accessible and affordable credit to customers across the country.”
Amazon already has stock in NBFC CapFloat Financial Services’ Axio brand. It now owns about 8% of the lending platform and took part in its Rs 144 crore extended Series C round back in 2018.
A source familiar with the situation claims that the deal was worth less than $200 million.
CapFloat was founded in 2013 by Sashank Rishyasringa and Gaurav Hinduja. In a mix of debt and equity, the company has raised over $234 million (more than Rs 1900 crore) from major investors, including Lightrock (holding 21.8% as of September 30, 2024), Elevation Capital (1.1%), Sequoia Capital (9.0%), Ribbit Capital (7.6%), Amazon (17.3%), Creation Investments (6.8%), and SOROS Economic Development Fund (3.5%).
The company renamed its three product lines—CapFloat, Walnut, and Walnut 369—to Axio in July 2022. Despite initially focusing on the SME market, the NBFC fintech progressively branched out into consumer lending and partnered with shops to offer credit at online checkout (also known as Buy Now Pay gradually/BNPL).
It acquired 60% of the personal financing app Walnut (now Axio) in 2018.
On a consolidated basis, the company’s losses dropped to Rs 18 crore, or approximately 86%, from its total revenue of Rs 384 crore in FY24. As of September 2024, the firm was worth Rs 459 crore.
With a gross non-performing asset (GNPA) ratio of 3%, assets under management (AUM) of Rs 2,200 crore, and more than 10 million customers, the NBFC fintech provides both secured and unsecured digital personal loans. In the first half of FY25, the company’s asset quality somewhat deteriorated due to the widespread stress in the unsecured lending industry.
Over 63% of the entire AUM was made up of retail finance loans, with personal loans accounting for the remaining portion, according to the credit rating agency.
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