India’s Rapido begins testing food delivery to take on Swiggy, Zomato

Rapido, widely recognized as a leading ride-hailing platform in India, has initiated beta testing for its new food delivery service in Bengaluru. This move marks a significant step for the ten-year-old startup as it seeks to compete with established players like Swiggy and Zomato in one of the fastest-growing food delivery markets globally. The testing phase is currently taking place in three key areas of Bengaluru: Byrasandra, Tavarekere, and Madiwala (BTM) Layout, as well as Hosur Sarjapura Road (HSR) Layout, and Koramangala. Aravind Sanka, co-founder and CEO of Rapido, confirmed this development in a conversation with TechCrunch. To facilitate this venture, Rapido has established a subsidiary named Ctrlx Technologies, under which the food delivery service will operate, branded as Ownly. Interestingly, the formation of this subsidiary may serve as a strategic tactic to navigate potential conflicts of interest, particularly with Swiggy, which holds a 12% stake in Rapido. Recently, Swiggy communicated to its shareholders that it would reconsider its investment in Rapido due to possible future conflicts. Rapido's Ownly has also launched an Android app on Google Play, featuring meals from local restaurants at prices approximately 15% lower than those offered by Swiggy and Zomato. This competitive pricing strategy stems from Rapido's decision not to impose commissions on restaurants, which can be as high as 30% with other delivery apps. Instead, they plan to charge a fixed fee per order, a model they introduced to restaurant partners back in June. With a fleet of around 10 million vehicles, including 5 to 6 million two-wheelers, Rapido is leveraging its existing resources to facilitate food deliveries alongside its taxi and courier services. The company aims to optimize delivery efficiency by avoiding distant restaurants and selectively curating menu items to enhance profitability while ensuring customer satisfaction. Having previously partnered with Swiggy for deliveries, Rapido has gained valuable insights into peak demand periods and popular dining locations, which will now inform its own service. While their agreement with Swiggy limits partnerships with other competitors like Zomato, it does not restrict Rapido from utilizing the data acquired during their collaboration. Founded in 2015, Rapido started as a bike taxi aggregator and has since diversified its offerings, including auto rickshaws and logistics services. In 2023, the company ventured into the cab segment to rival Uber and Ola, gaining traction with a subscription model that contrasts with the commission-based systems of its competitors. Additionally, Rapido has teamed up with Taiwanese electric two-wheeler manufacturer Gogoro to enhance its bike taxi fleet. These strategic initiatives have not only boosted its valuation but also helped it achieve unicorn status last year. According to a report from Bain & Company and Swiggy, India's online food delivery market is expected to exceed ₹2 trillion (around $23 billion) by 2030, with Zomato currently holding a 58% market share compared to Swiggy's 42%. As of now, Rapido has successfully raised $574 million across 13 funding rounds and operates in over 250 cities, conducting more than 3.5 million rides each day. The company counts major investors such as Prosus, WestBridge Capital, Nexus Venture Partners, and Think Investments among its backers.