Rapido Zooms into Unicorn Club with $120M Funding

Hyderabad-based ride-hailing disruptor Rapido has officially entered the coveted unicorn club, securing a substantial $120 million (Rs 1,000 crore) in its Series E funding round led by existing investor WestBridge Capital. This latest investment propels the company's valuation to over $1 billion, cementing its position as India's third unicorn of 2024, following the footsteps of Krutrim AI and Perfios.

Fueling Expansion and Technological Innovation

With a fresh injection of capital, Rapido is gearing up to accelerate its expansion plans, casting a wider net across Indian cities with its auto and cab services. The company aims to challenge the dominance of established players like Ola and Uber. 

Founded in 2015 by the trio of Aravind Sanka, Pavan Guntupalli, and Rishikesh SR, Rapido has carved a niche for itself by pioneering bike taxi services and subsequently venturing into auto and cab segments. The company's strategic foray into hyper-local parcel delivery in October 2023 further diversified its offerings.

A Rocky Road to Unicorn Status

Rapido's journey to unicorn status has been marked by financial challenges. Despite tripling its operating revenue to Rs 443 crore in FY23, the company's net loss widened by a substantial 54% to Rs 675 crore. However, recent strides in reducing monthly burn rate to around $2-3 million indicate a promising trajectory towards operational profitability by the end of FY25.

The company has yet to file its financial statements for FY24. Plans are in place to introduce high-margin revenue streams, including in-app advertisements and value-added services for driver partners, which are expected to further enhance profitability.

On October 27th, Rapido expanded its services by entering the hyper-local parcel delivery and cab service market, broadening its offerings beyond auto and bike taxis. Earlier, in April 2022, Rapido secured $180 million in a Series D funding round led by foodtech giant Swiggy, with participation from TVS Motor Company and existing investors Westbridge, Shell Ventures, and Nexus Ventures.

Rapido had already secured $329 million in funding before this latest round, with notable contributions from Nexus Venture Partners and Integrated Capital.

To further solidify its financial position, Rapido is exploring additional funding avenues, with discussions underway to secure an additional $20 million from global investors. The company is also strategizing to introduce high-margin revenue streams such as in-app advertising and value-added services for driver partners.

Navigating Regulatory Headwinds

The recent funding comes amidst a challenging regulatory landscape for the bike taxi segment, with key markets like Karnataka and Delhi imposing restrictions. Nevertheless, Rapido's achievement underscores the startup's resilience and growth potential in the face of adversity.

India's Thriving Startup Ecosystem

Rapido's entry into the unicorn club adds another feather to India's cap as a global startup powerhouse. With over 337,000 startups and 114 unicorns, the country ranks third globally, trailing only the United States and China. Bengaluru reigns supreme as India's unicorn capital, followed by Mumbai and Gurugram.

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