INSIDE AMAZON'S BIG BET ON ‘BUY NOW PAY LATER’

After losing out on UPI payments, the e-tailing giant needs to win the BNPL game in India

- Radhika P. Nair

In early September, Amazon received regulatory approval to complete its acquisition of Axio (CapFloat Financial Services Pvt Ltd), an Indian digital lender. The deal, estimated at $200 million in value, is the e-tailing giant’s largest acquisition in the country to date. And yet, investors and market watchers found no ‘drama’ in the deal.

Thereason?

Amazon and Axio are longtime partners. In 2016, the latter partnered with Amazon to offer loans to its merchants and then buyers on the platform. Amazon is also an investor in the company, starting with Series C in 2018. One investor, who didn’t want to be identified, said that the purchase was in the making for six years.

But that's not the only reason for the lack of drama. The deal was merely a “good outcome” for some investors but not an extraordinary one. The acquisition value is just shy of the $206 million the company raised from investors, including Amazon. The fintech startup has, in fact, seen an erosion in valuation, which insiders link to a slower-than-expected growth of the fintech lending industry. At its peak, Axio was valued at $350 million in 2019.

Between 2019 and now, Buy Now Pay Later (BNPL) digital lenders—Axio being one of them—have gone through a roller-coaster ride. Growth has moderated after a post-pandemic surge in numbers.

In 2018-19, fintechs sanctioned 4.4 million personal loans, according to the Fintech Association for Consumer Empowerment (FACE), an industry body. While the number has grown to 110 million in 2024-25, the growth rate has decelerated considerably, from a peak of 73% rise in sanction volume in 2022-23 to only 22% last fiscal year. Similarly, there was a sharp deceleration in the value of personal loans sanctioned as well (see chart).

The ‘no drama’ outcome is indicative of these challenges on the ground.