Existing backers Westbridge Capital, Shell Ventures and Nexus Ventures Partners, also participated in the round. ET reported that
Swiggy was in talks with the ride-sharing platform on December 22 as a part of a $150-200 million funding round.
According to regulatory filings accessed through Tofler, Swiggy has invested about $124 million, its largest single cheque in a startup along with it being its maiden bet on the mobility sector.
Sources in the know said that Rapido will be valued at $830 million post-investment and that Swiggy will own around 15% stake in the firm.
“Swiggy’s participation in this round will build on the synergies between the two companies. With a common mission to deliver superior customer experience through higher fleet availability, it will also provide additional earnings for both Swiggy’s delivery executives and Rapido’s captains,” the company said in a statement.
ET had reported in December that Swiggy’s investment will be purely financial in nature. The investment deal will help Swiggy enhance its last-mile delivery capabilities and bolster its quick commerce ambitions under Instamart. Zomato had also held talks with Rapido but those fell through, we had earlier reported.
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Rapido, which started off as a bike-taxi platform, has been growing its business-to-business vertical wherein it caters to the likes of Swiggy by fulfilling their orders using its riders. The company has also expanded into the three-wheeler segment launching services across 26 cities.
The investment will give Swiggy better access to the bike taxi fleet of Rapido as both businesses are highly complementary in terms of operations. Rapido said that the funds will be used to improve its technology, hire more people, and increase the number of riders on the platform.
“Swiggy and Rapido share a vision to build a logistics platform that empowers riders through more opportunities and higher earnings. While we’ve already been working together, this investment facilitates closer alignment to leverage the synergies between the platforms and improve the value we provide to both consumers and delivery executives/captains across the country,” said Sriharsha Majety, cofounder and CEO of Swiggy.
Aravind Sanka, cofounder, Rapido, said they were looking forward to learning from Swiggy’s experience to scale up throughout the country and enhance the experience of captains ( riders) and customers. “ Besides, TVS Motor, who are very passionate about EVs and the future of mobility, will help us in further expansion. We hope to accelerate our pace of becoming a household name as we increase our geographies and services, on the backbone of our robust, global-standard technology.”
“Fundamentally bike taxis and food-delivery are highly complementary in nature,” Kunal Khattar, who heads a VC firm Advantedge and is an investor in Rapido, had told ET in December. “ As much as 80% of the deliveries happen during lunch and dinner time. So what has happened is there is idle capacity during mornings and evenings. Bike-taxis are the opposite.”
By bringing on board more delivery orders, Rapido will also be able to attract full-time riders with vehicles which have yellow plates rather than the present fleet of riders who work part-time and have white plates. This has gotten Rapido in the crosshairs of law in several states it operates in. Swiggy will also get to use Rapido’s platform for bike taxi services.
Pre-pandemic, Rapido was competing against Bounce, Vogo, Drivezy, Ola and Uber. While Sequoia Capital-backed Bounce pivoted to making electric vehicles, Vogo
was acquired by Chalo. ET was the first to report about the deal on November 13. Meanwhile, both Uber and Ola have shifted their focus toward their core cab business and the three-wheeler category.
Rapido had raised $130 million in the past from various investors and currently operates in more than 100 cities in India with over 1.5 million bike taxi fleet. The company claims to have over 25 million customers.
