Rapido Joins Unicorn Club, Here’s a Closer Look at the Ride-Hailing Platform

Ride-hailing platform Rapido has become the newest unicorn of the country. The company raised $120 million in its latest fundraise that was led by WestBridge. With a 26 per cent stake, WestBridge is reportedly the largest investor of Rapido. The company’s valuation at the latest fundraise was $1 billion. 

After Saas player Perifo and Bhavish Aggarwal’s Krutrim AI, this is the third unicorn of the country for this year. Food delivery platform Swiggy, which holds a 15 per cent stake in Rapido, did not participate in the latest funding round. As per reports, the food delivery platform is currently focusing on its own initial public offering (IPO) and might be increasing its stake in the company after that. 

Meanwhile, Rapido's board has approved the allotment of 10 equity shares, 95,479 Series E shares, and 95,489 Series E1 compulsory convertible preferred shares (CCPS) at Rs 52,467 each, as per Entrackr. This totals Rs 1,002 crore ($120 million), according to regulatory filings with the Registrar of Companies, adds the report. Let’s delve a bit more into Rapido and how it works. 

A Look At The Origin

Under the legal name of Roppen Transportation Services Private Limited, Rapido was incorporated in 2015, as per data platform Tracxn. The Bengaluru-based company was founded in Bangalore by founders including Pavan Guntupalli, Aravind Sanka, and Rishikesh S. R. The founders initially headed logistics start-up theKarrier. However, credit availability and other issues made them stall their project. 

Amid the daily traffic of Bengaluru, the founders decided to come up with something that would make the commute of travelers easier. And then Rapido started. 

Rapido has secured $449 million in total funding across 11 rounds, starting with its initial round on May 8, 2015, adds the platform. 

The company has 57 institutional investors, which include WestBridge Capital, Nexus Venture Partners, Thompson Taraz, and others. 

Initially, Rapido’s focus was on bike taxis. However, it later expanded to autos and cabs. In 2023, the company entered the cab segment with around 1 lakh vehicles in its initial fleet. The company had highlighted that the expansion was done to meet the commuting needs of customers with a focus on business needs and expansion. 

Read: Rapido Aims To Attract Auto Drivers With Zero Commission

In the next two years, Rapido expects its cab hailing business to contribute 15-20 per cent of its revenue. However, bike taxis contribute around 45 per cent of its business, and it is followed by the auto service with 35-40 per cent, as per reports. 

A Mix of Commission and Subscription 

While Rapido’s bike service runs on a commission basis, its auto and cab services are focused on a subscription-based model. 

In the commission-based model, Rapido takes a 20 per cent fee from the total fare of each ride, while the remaining 80 per cent is given to the bike riders, known as "captains." While the subscription-based model is focused on zero commission. So, instead of charging a commission per ride, it charges a nominal login fee from drivers. Namma Yatri is another platform that follows this mode. Recently, other ride-hailing platforms, such as Ola and Uber, also rolled out subscription-based models for their drivers. 

“With our subscription model, we are targeting to onboard an additional 4 lakh auto captains in the country in the next year,” said Guntupalli in an interview with BusinessIndia. 

Rapido Leads Ola with 16.5 lakh Daily Rides

Rapido claims that it has done more rides than Ola. As per Entrackr, as of March 2024, Ola was at 13 lakh rides, and Rapido has done 16.5 lakh rides a day. Meanwhile, Uber has done 19.3 lakh rides. 

While the ride-hailing platform has not released its latest financial report yet, the company reported a loss of Rs 675 crore in FY23, indicating a 53.6 per cent widened loss. While its operating revenue tripled to Rs 443 crore. 

Read: Rapido To Stop Services In Maharashtra Following Diktat From Bombay High Court

The recent unicorn status of Rapido indicates two things: the ride-hailing industry is growing in India, and the number of unicorns in India will be more than last time. As per Modor Intelligence, the ride hailing market in India is expected to grow to $38.90 billion by 2029, with a compound annual growth rate (CAGR) of 13.55 per cent over the forecast period (2024-2029). A 2022 study published by Deloitte also indicates that mobility operators now account for 18 per cent of total sales in the market with over 4.2 million users in 2023–24 (FY24). 

In 2023, India saw the emergence of only two unicorns: quick commerce platform Zepto and business loans platform InCred Finance. This was a huge fall compared to 22 unicorns being created in 2022. 

Compared to 2023, this year seems more promising for the Indian start-up ecosystem. In an earlier interview with Outlook Business, Tracxn Co-Founder Neha Singh said, “This recovery is mirrored by the emergence of three new unicorns in the first half of this year, contrasting with no new additions in the second half of 2023 and highlighting a higher current rate of unicorn creation.“