Looking to further solidify its operations and scale its offerings, online lending platform Axio, the firm formerly known as Capital Float, has raised $20 million from Amazon Smbhav Venture Fund. This investment brings to the table a high level of awareness from Amazon of the potential Axio has in changing the lending scenario.
PC: YNOS
Investment Details and Strategic Objectives
The $20m rights issue was noted as raising the necessary funding for growth initiatives by Axio, which includes building its lending operation model on scale, broadening the use cases of the checkout finance, and the introduction of added credit products to its customer base. Axio’s emphasis on forming strategic alliances in different service lines was in sync with giving customers seamless and accessible financial services.
Financial Position and Performance
Axio has demonstrated a strong financial performance, reaching a disbursal level annualized of over $ 1 billion, at the same time keeping its non-performing assets ratio at 2-3%. The Bengaluru-based company had raised $137 million in equity and $671 million in debt prior to the current funding round, showcasing the strong financial base and growth it has experienced.
The rights issue comprised 11,25,000 preference shares at an issue price of Rs 1,486 each, aggregating Rs 167 crore (around $20 million). The rights issue was made to existing shareholders in the ratio of 0.51 shares for every 1 share held by them. Though the individual names of the investors are not available on record, it is very clear that Amazon has a huge stake, thus automatically validating its share in Axio.
Strategic Involvement by Amazon
Amazon’s first investment in Axio had come in 2018 when it picked up an 8% stake in the startup, part of the latter’s Rs 144 crore extended Series C fundraise. The latest investment, therefore, reiterates Amazon’s interest in continuing to back growth and innovation at Axio, a play in the fast-growing financial technology space. Notably, Amazon was also in discussions for a complete acquisition of Axio, as reported by Entrackr in July.
Shareholder Dynamics and Future Prospects
Before this round of funding, Light Rock was the largest external shareholder in Axio, holding 19.42 % interest, followed by Elevation, with 13.84%. Other strong backers are Peak XV, Creation, Ribbit, and QED Innovations. The company envisages strengthening its market position and ramping up growth plans because of the infusion of capital from Amazon and other investors.
Revenue Growth and Operational Efficiency
In an interaction with PTI, co-founder Sashank Rishyasringa pegged the company’s robust financial performance recently – a 50% increase in revenue and 95% reduction in losses in FY24. While the FY24 numbers were not available, Axio informed that it doubled its revenue from Rs 110 crore in FY22 to Rs 220 crore in FY23. The focus on operational efficiency has continued to be married into strategic growth, with the company managing to marginally reduce losses to Rs 137 crore in FY23.
$20 million in backing from the Amazon Smbhav Venture Fund, for Axio, this is a substantial turning point in enabling the enterprise to expand its product portfolio and reach. With Amazon’s cushion of support and a clear strategic vision, Axio is now at the very forefront of this online lending industry with a take-no-prisoner approach toward new, innovative financial solutions to meet the increasingly dynamic and changing needs of its customers.
