Rapido, a popular ride-hailing platform in India that competes with Uber, has doubled its valuation to $2.3 billion. This follows a secondary share sale by the 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% stake in Rapido for about $270 million through two separate deals. Around 10% of the stake was acquired by Prosus for roughly $222 million. The remaining stake was sold to WestBridge Capital for about $49 million. 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 valuation from September 2024. In August, Rapido ventured into food deliveries in Bengaluru through a pilot program operated by its subsidiary Ownly. The pilot marked Rapido’s entry into a sector long dominated by Swiggy and its archrival Zomato. 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 funding round in April 2022. Rapido also partnered with Swiggy as a last-mile delivery provider, helping fulfill food orders on the platform. This early partnership gave Rapido a window into customer demand patterns and the operational challenges faced by restaurants.
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 Rapido prepared to enter the food-delivery market. Swiggy’s co-founder also mentioned conversations about a potential collaboration in food delivery with Rapido 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. However, a recent goods and services tax update by the Indian government, which levies a flat 18% tax on online food deliveries, may limit pricing flexibility as a competitive edge.
Rapido has already been a strong contender in India’s ride-hailing market. Uber’s CEO recently described the startup as Uber’s biggest rival in India. As Rapido moves into food delivery, Swiggy continues to build out its instant-commerce business, which offers quick delivery of groceries in less than an hour.
Swiggy announced the incorporation of a subsidiary for its fast-growing quick commerce arm, Instamart. This move could strengthen its position in the competitive market that includes players like Zomato’s Blinkit. 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, with its gross order value surging 82% in the last fiscal year.