Aravind Sanka, the company's CEO, told ET that the funds will be used to expand Rapido's newly launched four wheele taxi business, which competes with Ola and Uber. Venture capital fund Nexus Venture Partners, which is Swiggy-backed Rapido's other existing investor, also participated in the latest fundraise, along with new backers Think Investments and New York-based Invus Opportunities.
Rapido is also entering the buzzy quick commerce delivery space by utilising its two-wheeler fleet for hyperlocal deliveries, according to Sanka. On July 29, ET was the first to report that Rapido had raised USD 120 million from WestBridge as part of a larger funding round.
"The latest fundraise has come on the back of strong growth that we've clocked over the last two years," Sanka said, claiming that Rapido is the market leader in the bike-taxi segment. "In this period, we've grown our top line over 12 times... A few years back, we were just a two-wheeler player, but now we're a significant three-wheeler operator. We are also making huge inroads in the four-wheeler ride-sharing market."
Across different form factors, Sanka said Rapido is clocking 2.3-2.5 million orders every day, of which 7% is from business-to-business (B2B). Under B2B, Rapido fulfils food-delivery orders for Swiggy during lean hours for bike-taxi operations. It has also onboarded Open Network for Digital Commerce (ONDC) as a logistics provider.
“We’re planning to go deeper into cities while also broadening categories. Four-wheelers category is pretty new for us, so we’ll be aggressive there,” Sanka said. “In some cities, we’re already larger than one of the incumbents in four-wheelers, and now we want to make that journey and become a significant No.2 player.”
On August 9, ET had reported exclusively that Rapido had crossed the USD 1 billion gross merchandise value (GMV) mark, primarily driven by its expansion into new segments such as four-wheeler cabs and auto-rickshaws, in addition to an aggressive expansion into more than 100 cities.
Sanka said three-wheeler auto-rickshaw bookings is the single biggest contributor to its GMV with a 40% share, with bike-taxis and cabs evenly split with 30% each. However, in terms of number of rides, more than 50% still comes from two-wheeler vehicles, he said.
In addition to the older companies such as Uber and Ola, Rapido also faces competition from Google-backed Namma Yatri, a newer player which operates on the ONDC protocol.
Like ONDC, Rapido, too, operates in auto-rickshaw and four-wheeler cab services on the subscription model, wherein driver partners are charged a flat per day or per week fee instead of commission on every ride.
Sanka said Rapido will expand its four-wheeler cab service purely on the subscription model and not levy commissions on its driver partners.
“From dominating bike taxis to making significant strides into 3W autos and cabs, their growth is a testament to their operational rigour and relentless focus on customer and captain satisfaction,” said Sumir Chadha, cofounder and managing partner at WestBridge. “We congratulate the team on their capital efficient scaleup, which now positions Rapido among India's most used consumer internet apps…”
Quick commerce plans
Mirroring the move by several logistics firms to enter the rapidly expanding quick commerce space, Rapido is also tying up with players in the segment, in addition to ecommerce marketplaces to facilitate faster deliveries.
“We’re looking at how we can power quick commerce. One way of quick commerce is to do 10-minute deliveries, but there’s also 30-minute to one-hour quick commerce. We’ll be opening up for those use-cases as well,” Sanka said. “We’re in talks with quick commerce companies as well as existing ecommerce companies who want to make their deliveries faster.”
Sanka said, “The supply is available…our fleet is bigger than Swiggy and Zomato. We have over 600,000 monthly active riders on two-wheelers. We’re in talks for such integrations…and are maybe a few months away from (launching the service).”
While much of the quick commerce supply chain has been maintained in-house by platforms such as Zomato-owned Blinkit, Swiggy Instamart and Nexus Venture Partners-backed Zepto, several third-party logistics players are throwing their hats into the ring.
These include Warburg Pincus-backed Ecom Express, Flipkart-backed Shadowfax and Tiger Global-backed Loadshare. Gurgaon-based Delhivery is also opening dark stores, or micro-warehouses, for rapid deliveries of a larger assortment of goods on a 1-2 hour timeline.
According to a BofA Securities report, the quick commerce segment in India was estimated to be USD 2.8 billion in size as of 2023, and is projected to grow to around USD 22 billion by 2027
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