Aravind SankaThe company’s CEO told ET that the funds will be used to expand The new four-wheeled taxi service launched by Rapidowhich competes with Ola and Uber. Venture capital fund Nexus Venture Partners, which is the other existing investor in Swiggy-backed Rapido, also participated in the latest fundraise, along with new backers Think Investments and New York-based Invus Opportunities.
Rapido is also entering the dynamic express retail delivery space by using its fleet of two-wheelers for hyperlocal deliveries, according to Sanka. On July 29, ET was the first to report that Rapido had raised $120 million from WestBridge as part of a larger funding round.
“This latest fundraising has come on the back of the strong growth we have seen over the past two years,” says Sanka, claiming that Rapido is the market leader in the bike-taxi segment. “In this period, we have grown our revenues 12-fold… A few years ago, we were just a two-wheeler operator, but now we are a major three-wheeler operator. We are also making great inroads into the four-wheeler ride-sharing market.”
Sanka said Rapido sees 2.3-2.5 million orders per day across a range of formats, of which 7% are business-to-business (B2B). Under the B2B umbrella, Rapido services food delivery orders for Swiggy during off-peak hours for bike-taxi operations. It has also roped in Open Network for Digital Commerce (ONDC) as a logistics provider.
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“We are planning to go deeper into cities and at the same time expand the categories. The four-wheeler category is quite new for us, so we will be aggressive there…” Sanka said. “In some cities, we are already bigger than one of the incumbents in four-wheelers, and now we want to take that path and become a major number two player.”
On August 9, ET exclusively reported that Rapido had surpassed the $1 billion mark in gross merchandise value (GMV)driven primarily by its expansion into new segments such as four-wheeler taxis and auto-rickshaws, in addition to aggressive expansion in over 100 cities.
Sanka said three-wheeler rickshaw bookings are the largest contributor to its GMV with a 40% share, with cycle rickshaws and taxis split equally at 30% each. However, in terms of number of trips, more than 50% still comes from two-wheelers, he said.
Apart from older players like Uber and Ola, Rapido also faces competition from Google-backed Namma Yatri, a newer player operating on the ONDC protocol.
Like ONDC, Rapido also operates auto-rickshaw and four-wheeler taxi services under the subscription model, where driver-partners are charged a fixed fee per day or week instead of a commission for each trip.
Sanka said Rapido will expand its four-wheeled taxi service solely through the subscription model and will not charge commissions to its driver partners.
“From dominating bike taxis to making significant inroads into the 3W auto and taxi market, their growth is a testament to their operational rigor and relentless focus on customer and captain satisfaction,” said Sumir Chadha, Co-Founder and Managing Partner, WestBridge. “We congratulate the team on their capital-efficient growth, which now positions Rapido among the most used consumer internet apps in India…”
Quick Trade Plans
Following the lead of several logistics companies looking to enter the rapidly expanding express commerce space, Rapido is also partnering with players in the segment, in addition to e-commerce marketplaces, to facilitate faster deliveries.
“We are looking at how we can drive fast commerce. One form of fast commerce is to deliver within 10 minutes, but there is also fast commerce from 30 minutes to an hour. We will open our services to those use cases as well,” Sanka said. “We are in talks with fast commerce companies as well as existing e-commerce companies that want to deliver faster.”
Sanka said, “Supply is available… our fleet is bigger than Swiggy and Zomato“We have over 600,000 monthly active users of two-wheelers. We are in talks to do these integrations… and it may be a few months before the service is launched.”
While much of the fast-trade supply chain has been kept in-house by platforms such as Blinkit (owned by Zomato), Swiggy Instamart and Zepto (backed by Nexus Venture Partners), several third-party logistics players are joining forces.
These include Warburg Pincus-backed Ecom Express, Flipkart-backed Shadowfax and Tiger Global-backed Loadshare. Delhivery It is also opening dark stores, or microwarehouses, for fast deliveries of a wider variety of products within 1 to 2 hours.
According to a BofA Securities report, the fast-trading segment in India was estimated to reach a size of $2.8 billion by 2023, and is projected to grow to around $22 billion by 2027.
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