Rapido Joins Unicorn Club with $120 Million Funding Round Led by WestBridge

Rapido, a bike taxi service startup backed by Swiggy, has become a unicorn with a $120 million Series E funding round led by its largest backer, WestBridge Capital. This significant milestone sees the company reaching a valuation of over $1 billion, according to estimates by Entrackr. A unicorn is a privately held startup company with a current valuation of $1 billion or more.

The board of Rapido has approved a special resolution to allot 10 equity shares, 95,479 Series E, and 95,489 Series E1 compulsory convertible preferred shares (CCPS) at an issue price of Rs 52,467 per share for a total consideration of Rs 1,002 crore or $120 million. This information comes from the company's regulatory filings with the Registrar of Companies, as reported by Entrackr.

WestBridge has invested the capital through three different investment vehicles: Setu AIF Trust, Konark Trust, and MMPL Trust. Entrackr's estimates indicate that the company raised the funding at a post-money valuation of Rs 8,517 crore, or just over $1 billion. This follows Rapido's previous funding round in April 2022, where it raised $180 million in a Series D round led by new investor Swiggy, with participation from TVS Motor Company, WestBridge, Shell Ventures, and Nexus Ventures. At that time, the company's valuation was $830 million.

Founded in 2015 by Aravind Sanka, Pavan Guntupalli, and SR Rishikesh, Rapido is an aggregator platform that provides bike-taxi and auto services in over 100 cities across India. According to data platform Tracxn, the company has raised a total of $329 million from investors. WestBridge is the largest stakeholder in Rapido with a 25.6% stake. Although Swiggy owns a 15.1% stake in the firm, it did not participate in the new round. Swiggy, based in Bengaluru, has confidentially filed for an initial public offering (IPO) aiming to raise Rs 10,400 crore (approximately $1.25 billion) and is expected to go public within weeks.

In December of the previous year, Rapido announced its entry into the cab market, currently dominated by brands like Uber and Ola. This move into the cab segment is supported by a software-as-a-service (SaaS) based platform. Other notable names in the cab aggregator space include BluSmart and InDrive. Rapido's entry into the car service sector is marked by its zero-commission model for drivers. The Rapido Cabs platform plans to onboard driver partners through a subscription model rather than charging a commission on each ride, which is a departure from the model used by incumbents.

To date, fintech firm Perfios and Bhavish Aggarwal's artificial intelligence startup Krutrim have also achieved unicorn status. Lending firm Moneyview and fintech company Leap are expected to raise new rounds that could push them into the unicorn club.

Rapido has yet to disclose its financials for FY24. However, the company reported a threefold increase in operating revenue, reaching Rs 443 crore during FY23. This rapid growth in scale also led to a 54% spike in losses, which amounted to Rs 675 crore in FY23, as per Entrackr.

Rapido's continued expansion and innovation in the mobility space underscore its commitment to providing affordable and accessible transportation options across India. As the company ventures into new markets and services, it remains a key player to watch in the evolving landscape of urban mobility.