Ride-sharing aggregator Rapido, backed by the likes of Swiggy and TVS Motor, is in the process of securing a $100 million fundraise, led by current investor Westbridge Capital, according to a person familiar with the knowledge of the deal who wished to remain anonymous.
“Rapido has received commitments of $70 million or so and is approaching domestic family offices for additional capital,” the person cited above said.
Currently, the company is engaged in negotiations that might result in a ‘flat round’ of funding, potentially valuing the firm at nearly $900 million, as per another individual familiar with the matter.
In April 2022, Rapido had raised $180 million from Swiggy at a valuation of around $830 million.
Negotiations continue despite the bike sharing segment facing regulatory challenges and opposition from traditional service providers, such as auto drivers in some states like Karnataka, which recently revoked permission for electric bike taxis in March.
A spokesperson for Westbridge Capital declined to comment. Westbridge had invested in Rapido, operated by Roppen Transportation Services Pvt Ltd, as early as 2019 and has participated in rounds in 2021 and 2022.
“They (Westbridge) are our existing investors and invested in every round. They will keep supporting us in future as well, whenever we raise,” Rapido co-founder Aravind Sanka said when reached for a comment.
Sanka added that the company is well capitalised and “closer to cash flow positive”.
Rapido, which started off as bike taxi aggregator in 2015, has diversified into three-wheeler ride and four-wheeler ride sharing aggregator since October last year.
Sanka’s emphasis on pursuing profitability reflects a broader shift in the startup ecosystem away from the previous focus on growth at any cost—a trend that dominated 2021. This pivot comes as startups closer to profitability now stand a better chance at attracting investors and securing favourable valuations.
Rapido saw its losses widen to around ₹675 crore in fiscal year 2022-23 (FY23) from ₹439 crore a year ago. Companies have time till end of September to file their latest financial statements with the Registrar of Companies.
The company said that a capital raise is not imminent.
“We wish to clarify that Rapido is adequately capitalized and not looking to raise funds in near future. Any discussions regarding fund raise by Rapido are purely speculative,” a Rapido spokesperson reiterated.
Rapido co-founder Pavan Guntupalli had told CNBC in December 2023 that the startup expects to hit unicorn valuation “in a few months”.
Rapido’s reluctance to confirm its fundraising efforts could stem from ongoing discussions about the company’s valuation, according to people cited above.
The investment climate in 2024 has grown more cautious, with investors less inclined to offer the generous valuations that were common in the boom year of 2021.
A successful capital raise would bolster Rapido’s resources for expansion and growth in a competitive market, where it offers auto and bike-sharing services and recently entered the four-wheeler segment through a pilot programme in Hyderabad, Delhi, and Bengaluru.
Additionally, in February, Rapido introduced a zero-commission model for auto drivers on its SaaS (software-as-a-service) platform, requiring only a one-time onboarding fee, to attract more service providers.