Rapido, a popular ride-hailing platform in India that competes with Uber, has doubled its valuation to 2.3 billion dollars following a secondary share sale by food delivery giant Swiggy. The share sale comes just weeks after Rapido began piloting food deliveries, edging into Swiggy’s core territory.
Swiggy has offloaded its entire 12 percent stake in Rapido for 24 billion rupees, or about 270 million dollars, through two separate deals. Around 10 percent of the stake was acquired by Prosus for 19.68 billion rupees, roughly 222 million dollars. The remaining stake was sold to WestBridge Capital for 4.31 billion rupees, about 49 million dollars. The Dutch investment group Prosus is already a common backer of both Swiggy and Rapido, and is the largest shareholder in Swiggy.
Rapido’s latest share sale pegs the startup at more than twice its 1.1 billion dollar valuation from September 2024, a figure confirmed by its CEO. In August, Rapido ventured into food deliveries in Bengaluru through a pilot program operated by its subsidiary Ownly. This pilot marked Rapido’s entry into a sector long dominated by Swiggy and its arch-rival Zomato. Rapido co-founder and CEO Aravind Sanka confirmed the pilot initially began in three neighborhoods within the city.
Rapido’s entry into food delivery came over three years after Swiggy backed the startup in a 180 million dollar funding round in April 2022. Rapido also partnered with Swiggy as a last-mile delivery provider, helping fulfill food orders on the platform. Swiggy’s early partnership gave Rapido a window into customer demand patterns and the operational challenges faced by restaurants, including the commissions required to receive orders.
Swiggy hinted earlier this year that it might sell its stake in Rapido. In a July letter to shareholders, Swiggy stated it was reassessing its stake due to a potential conflict of interest as the ride-hailing company prepared to enter the food delivery market. Swiggy co-founder and CEO Sriharsha Majety also mentioned during a July earnings call that the company had conversations about a potential collaboration in food delivery with Rapido, but that did not materialize.
It is still too early to gauge whether Rapido’s emerging food delivery business will affect incumbents like Swiggy and Zomato. The entry was expected to pressure existing players to lower commissions to retain restaurant partners. However, a recent Goods and Services Tax update by the Indian government may limit pricing flexibility, with a flat 18 percent tax now levied on online food deliveries, making cost competitiveness a less effective edge.
Rapido has already been a strong contender in India’s ride-hailing market. Uber CEO Dara Khosrowshahi recently described the startup as Uber’s biggest rival in India, not the SoftBank-backed incumbent, Ola.
As Rapido creeps into food delivery, Swiggy continues to build out its instant commerce business, which offers quick delivery of groceries and other items in less than an hour. Swiggy announced the incorporation of a step-down subsidiary for its fast-growing quick commerce arm, Instamart. The move could help strengthen its position in India’s competitive quick commerce market, which includes players such as Zomato’s Blinkit, Flipkart, and Amazon. The structure may also pave the way for a potential spin-off or separate fundraising for Instamart in the future.
Instamart has emerged as Swiggy’s fastest-growing business in recent months. Its gross order value surged 82 percent to 146.83 billion rupees, or 1.7 billion dollars, in the last fiscal year, representing nearly a third of the company’s total orders. Instamart’s revenue also more than doubled to 22.52 billion rupees, or 254 million dollars, outpacing the growth of the core food delivery segment.