Accel backs Uber rival Rapido as Prosus boosts stake

Accel has made a strategic investment in Rapido, a ride-hailing service vying with Uber in India. This move comes as Prosus has amplified its ownership after TVS Motor, a prominent two-wheeler manufacturer, divested its complete stake in the company. On Thursday, TVS Motor disclosed in a stock exchange report that it sold its entire interest in Rapido for ₹2.88 billion (approximately $32 million) to Accel and MIH Investments, the investment arm of Prosus. This sale realized a remarkable return of over 152% for TVS Motor in just three years. Founded in 2015, Rapido has established itself as a significant contender within India's ride-hailing landscape, going head-to-head with Uber, Ola, and InDrive. Initially focused on bike taxi services, the company has diversified into auto-rickshaw bookings and car services, and has recently ventured into courier services. Moreover, Rapido is testing a food delivery service in select cities, entering a market largely dominated by Swiggy and Zomato. TVS Motor's initial investment in Rapido occurred in April 2022 during the company's $180 million Series D funding round, aligning with existing investors like WestBridge Capital, Shell Ventures, and Nexus Venture Partners. At that time, TVS acquired its stake for ₹1.14 billion, as noted in previous investor disclosures. In the recent transaction, Accel acquired 11,997 preference shares, while Prosus obtained 11,988 preference shares along with 10 equity shares, with both investors committing around ₹1.44 billion (about $16 million) each. Accel's investment signifies a renewed interest in India's ride-hailing sector, as the firm was an early investor in Ola. Currently, Rapido is engaged in discussions with Accel and Prosus regarding a new primary funding round, which is anticipated to finalize next year, although the specifics of the funding size remain unclear. Prosus has previously invested in Rapido and increased its stake through another secondary share sale in September, coinciding with Swiggy's complete exit, which doubled Rapido's valuation to $2.3 billion, according to reports from TechCrunch. Both Accel and Prosus are also early investors in Swiggy, which withdrew from Rapido due to potential conflicts of interest as the ride-hailing company seeks to expand into food delivery. Requests for comments from Accel, Prosus, and Rapido have gone unanswered.