BENGALURU: Rapido, a prominent bike-taxi platform, recently announced the successful closure of a $200 million financing round, elevating its valuation to an impressive $1.1 billion.
The funding round was spearheaded by WestBridge Capital, which had previously invested $120 million in July, along with participation from several notable investors, including Nexus Venture Partners, Think Investments from San Francisco, and Invus Opportunities based in New York.
The co-founder of Rapido, Aravind Sanka, highlighted the company’s significant growth trajectory over the past year, noting a remarkable surge in daily rides, which now averages 2.5 million.
He expressed optimism regarding the investment’s role in driving innovation and enhancing service delivery, aiming to position Rapido as a formidable competitor in the transportation sector.
Notably, the platform has already surpassed certain traditional four-wheeler services in particular cities, aspiring to secure its place as a significant player in the market.
Rapido operates across various vehicle segments, processing between 2.3 to 2.5 million orders daily, with a noteworthy seven per cent derived from business-to-business transactions.
Entering e-commerce delivery
The three-wheeler auto-rickshaw segment contributes the largest share of the company’s gross merchandise volume, accounting for 40 per cent, while bike taxis and cab services each make up 30 per cent.
Despite these distributions, two-wheeled transportation remains the predominant choice for over half of the rides, underscoring the importance of this segment in Rapido’s operations.
In a strategic expansion of its business model, Rapido is entering the burgeoning field of quick commerce delivery, leveraging its two-wheeler fleet for hyperlocal logistics.
Sanka has indicated that the company is engaging with leading quick commerce and e-commerce entities to bolster this initiative.
The fresh capital will be pivotal for Rapido as it aims to broaden its operational footprint across India and refine its technological infrastructure to enhance service efficacy.
With plans to diversify further into bike-taxis, auto-rickshaws, and traditional taxis, Rapido is positioning itself not only as a leader in bike-taxi services but also as a versatile player in the broader transport ecosystem.
Despite its expansive growth, Rapido has faced challenges, recording a significant rise in losses by nearly 54 per cent in FY23, totaling Rs675 crore, compared to Rs439 crore in FY22. These losses have been attributed to increased operational costs, including rider compensation and technology investments. Nevertheless, the assistance from key stakeholders such as Swiggy, which previously invested $180 million in April 2023, signals robust confidence in Rapido’s potential.
Established in 2015, Rapido has rapidly extended its reach beyond major metropolitan areas, now servicing over 100 cities across India, including tier 2 and 3 locations.
The company’s growth narrative reflects a combination of operational excellence and an unwavering commitment to customer satisfaction, as noted by Sumir Chadha, co-founder and Managing Partner at WestBridge Capital.
