Fintech lending startup Axio has successfully raised $20 million in its latest equity funding round, led by Amazon Smbhav Venture Fund. The funding will be directed towards scaling operations, expanding use cases for checkout finance, and broadening its range of credit products to serve customers throughout their financial journeys.

This investment comes amid a surge in equity deals within the digital lending sector, particularly focused on micro, small, and medium enterprises (MSMEs). Recent reports indicate that other MSME lenders like Flexiloans and Indifi Technologies are also securing significant funding, with Flexiloans in discussions to raise around $35 million and Indifi Technologies having raised a similar amount last year.

Axio, based in Bengaluru and formerly known as Capital Float, operates under a non-banking finance company (NBFC) license. The company provides loans through its own books and in partnership with banks and other NBFCs. It claims to have approximately 10 million credit customers and boasts an annualized disbursal of $1 billion.

Prior to this round, Axio had already secured $137 million in equity and $671 million in debt. In 2021, the company raised $50 million in equity funding from Lightrock India and other investors, achieving a post-money valuation of $201 million.

The startup has also attracted investment from notable firms such as Peak XV, Elevation Capital, and Ribbit Capital.

Co-founders Sashank Rishyasringa and Gaurav Hinduja expressed their enthusiasm about the new investment, stating, “This funding will help us scale our loan book, enhance our checkout finance solutions, and broaden our credit offerings. By merging product innovation with strong underwriting and risk controls, we aim to extend access to credit for the next 200 million customers across India.”

The Amazon Smbhav Venture Fund, launched in 2021 with an initial focus on agriculture and healthcare, has since broadened its scope to include sectors such as fintech and gaming. Its portfolio features companies like Acko, Cashify, Fitterfly, and M1xchange.

Abhijeet Muzumdar, Vice President and Head of Amazon Smbhav Venture Fund and Corporate Development, highlighted the significance of the investment, stating, “We are thrilled to support Axio in providing accessible and responsible digital credit solutions in India. This investment aligns with our belief in Axio’s potential to expand innovative financial services while maintaining responsible risk management.”