Rapido, the ride-hailing startup, has joined the unicorn club after raising $120 million in its latest Series E funding round led by WestBridge Capital. This funding boost will likely enable Rapido to expand its auto and cab services in new cities across India.
According to regulatory filings sourced from the Registrar of Companies (RoC), WestBridge Capital led the funding through Setu AIF Trust, Konark Trust, and MMPL Trust. The board at Rapido passed a special resolution to allot equity and compulsory convertible preferred shares (CCPS) at an issue price of INR 52,467 per share, totaling INR 1,002 crore or $120 million.
A venture capital investor, requesting anonymity, stated, “The new funding will help Rapido develop its tech stack and expand into markets previously dominated by Ola and Uber.”
Rapido’s Expansion and Market Position
Rapido, founded in 2015 by Aravind Sanka, Pavan Guntupalli, and Rishikesh SR, initially focused on auto and bike taxi services and has since expanded into cab services. With this new funding, the company aims to strengthen its market position and compete more effectively with major players like Ola and Uber.
In April 2022, Rapido raised $180 million in a Series D round led by Swiggy, with participation from TVS Motor Company, WestBridge, Shell Ventures, and Nexus Ventures. This round valued the company at around $850 million, and with the latest funding, Rapido’s post-money valuation exceeds $1 billion.
WestBridge Capital, the largest stakeholder in Rapido with a 26 percent stake, led the recent funding round. Swiggy, which owns over 15 percent of Rapido, did not participate in this round as it prepares for a potential IPO. Rapido’s new funding will enhance its technology and expand its services, positioning itself as a strong competitor in the ride-hailing market.
Market Impact and Future Prospects
Rapido’s internal documents reveal that the company has surpassed Ola to become the second-largest player in the ride-hailing space after Uber. As of March 2024, Uber processed 19.3 lakh rides daily, Rapido 16.5 lakh rides, and Ola 13 lakh rides.
The company’s strategy, including a zero-commission model and cashback offers, has contributed to its success. Rapido has also emerged as a leader in the bike taxi segment and dominates the southern part of India in the auto-hailing sector. Despite its impressive revenue growth, Rapido’s losses surged 54 percent to INR 675 crore in FY23.
Rapido’s entry into the unicorn club marks a significant milestone in its journey. With strong financial backing and strategic expansion plans, Rapido is poised to challenge established players and capture a larger market share in India’s ride-hailing industry.
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