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People aware of the matter said the Bengaluru-based bike taxi company is likely to raise another $20 million from global investors.
“A US-based family office and a UK-based fund are in talks to pick up stakes in the company,” one of the persons said.
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ET had reported on April 4 that Rapido was among late-stage firms engaged in talks to raise a large round at a marginally higher valuation than its last fundraise. The new round, which is yet to be fully closed, could also see a secondary component being stitched up with some early investors exiting their positions. The company was valued at $825 million after its $180 million funding in April 2022.
Rapido didn’t respond to email queries.
The people said food delivery and quick commerce startup Swiggy, an existing investor in Rapido, is not investing in this round. “Swiggy has filed the prospectus for its IPO with Sebi and has therefore decided to sit out of this round,” a second person said.
Rapido, like its rivals Ola and Uber, has rolled out subscription-based plans for auto rickshaw drivers on its platform instead of charging a booking fee or commission on every transaction. This is largely to take on Google-backed Namma Yatri, which doesn’t charge driver commissions. Rapido has also forayed into cab-hailing services, essentially becoming a full-stack ride-hailing firm.
Started by Arvind Sanka, Pavan G and Rishikesh SR in 2015, Rapido has raised $329 million in funding prior to the latest round. Nexus Venture Partners and Integrated Capital are among its other investors.
In FY23, Rapido saw its net loss widen 54% to Rs 675 crore, even as operating revenue tripled to Rs 443 crore. It has yet to file FY24 financial statements.
A person in the know of the company’s plans said Rapido has managed to reduce its burn to around $2-3 million a month and is on track for operational profitability by FY25-end.
“Rapido is planning to add several high-margin revenue streams including in-app advertisements…and value-added services for its driver partners,” the person said.
The fundraise also comes at a time when the bike taxi segment is facing regulatory hurdles in key markets such as Karnataka and Delhi.
Omprakash Tiwary is a business writer who delves into the intricacies of the corporate world. With a focus on finance and economic landscape. He offers readers valuable insights into market trends, entrepreneurship, and economic developments.