Uber-rival Rapido doubles valuation to $2.3B following Swiggy stake sale

Rapido, an emerging player in India’s ride-hailing market, has seen its valuation skyrocket to $2.3 billion following a significant share divestment by food delivery leader Swiggy. This move comes on the heels of Rapido's foray into food delivery, challenging Swiggy's traditional stronghold. Swiggy has sold its entire 12% stake in Rapido for approximately ₹24 billion (around $270 million) across two transactions, as detailed in regulatory documents. Notably, Prosus, a Dutch investment firm and major investor in both companies, acquired about 10% of this stake for ₹19.68 billion (approximately $222 million), while WestBridge Capital purchased the remaining portion for ₹4.31 billion (about $49 million). This latest valuation marks a dramatic increase from Rapido's $1.1 billion valuation recorded just a year prior. CEO Aravind Sanka confirmed this impressive growth to TechCrunch. In a strategic move, Rapido launched a pilot program for food deliveries in Bengaluru, marking its entry into a competitive sector that has been dominated by Swiggy and its rival Zomato. The pilot program, which began in three neighborhoods, is part of Rapido's broader strategy to diversify its services. This venture comes after Swiggy's backing of Rapido in a $180 million funding round in April 2022, where the two companies collaborated on last-mile delivery solutions for food orders. Earlier this year, Swiggy hinted at the possibility of selling its stake in Rapido to avoid conflicts of interest as the ride-hailing service prepared to enter the food delivery space. CEO Sriharsha Majety noted during a July earnings call that discussions regarding collaboration in food delivery with Rapido had taken place but ultimately did not progress. As Rapido sets its sights on the food delivery market, the impact on established players like Swiggy and Zomato remains uncertain. However, industry experts predict that Rapido's entry could compel existing companies to reconsider their commission structures to retain restaurant partnerships. The recent introduction of an 18% Goods and Services Tax on online food deliveries by the Indian government may also complicate pricing strategies. Despite these challenges, Rapido is already recognized as a formidable competitor in the ride-hailing sector, with Uber's CEO identifying it as the primary rival in India, surpassing even the SoftBank-backed Ola. Meanwhile, Swiggy is bolstering its instant commerce division, aiming to enhance its position in the fast-paced delivery market, which includes competitors like Zomato’s Blinkit and Amazon. The incorporation of a subsidiary for its growing quick commerce arm, Instamart, signals Swiggy's commitment to maintaining its competitive edge. Instamart has recently emerged as Swiggy’s fastest-growing segment, with a remarkable 82% surge in gross order value, reaching ₹146.83 billion ($1.7 billion) in FY25, illustrating the evolving dynamics of the Indian food delivery and e-commerce landscape.