E-commerce major Amazon is set to acquire Bengaluru-based digital lending firm Axio (formerly Capital Float). The deal, finalised in December following due diligence, now awaits regulatory approvals.
"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 founders said in a company blog post.
"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," the founders added.
Amazon is already an investor in Axio, the brand under NBFC CapFloat Financial Services. It had participated in its Rs 144 crore worth extended Series C round back in 2018, and currently holds around 8% of the lending platform.
As per a source close to the development, the deal reportedly valued at under $200 million.
Founded in 2013 by Sashank Rishyasringa and Gaurav Hinduja, CapFloat has raised over $234 million (over Rs 1900 crore) in a mix of equity and debt, per Traxcn data, from marquee investors, such as Lightrock (holding 21.8% as on 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 rebranded its three product offerings under the name of CapFloat, Walnut and Walnut 369 as Axio in July 2022. While the NBFC fintech started with a focus on the SME segment, it later diversified into the consumer finance and partnered with merchants to offer credit at online checkout (Buy Now Pay Later, BNPL).
In 2018, it acquired 60% stake in Walnut (now Axio), a personal finance app for personal loans.
At a consolidated level, the company managed to narrow down its losses significantly by almost 86% to Rs 18 crore on a total income of Rs 384 crore in FY24. As of September 2024, the firm held a networth of Rs 459 crore.
The NBFC fintech provides digital personal loans, unsecured, and claims to have over 10 million customers with an Assets under Management (AUM) of Rs 2,200 crore and a Gross Non-Performing Asset (GNPA) ratio of 3 percent. The firm saw slight moderation in asset quality in the first half of FY25, on the back of overall stress in the unsecured lending segment.
Fintech NBFCs: Karma of unsecured lending bites in 2024; face rising NPAs, crumbling asset quality
Of the overall AUM, nearly 63% was the checkout finance book and the balance is personal loan, per the credit rating firm.
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