India’s ride-hailing market has witnessed a significant development, with Accel investing in Rapido, a major player in the sector, while Prosus has increased its stake in the company. This move comes after TVS Motor, a leading two-wheeler manufacturer in India, sold its entire holding in Rapido for ₹2.88 billion, securing a return of over 152% in just three years. Founded in 2015, Rapido has grown rapidly, competing with established players like Uber, Ola, and inDrive, and has expanded its services beyond bike taxis to include auto-rickshaw bookings, car services, and courier services.
The company’s decision to pilot a food-delivery service in select cities marks a strategic entry into a segment dominated by Swiggy and Zomato. This development is notable, given that Accel and Prosus, which have backed Rapido, are also early investors in Swiggy. The latter’s exit from Rapido was reportedly due to a potential conflict of interest, as the ride-hailing startup prepared to expand into the food-delivery market.
TVS Motor’s initial investment in Rapido was part of the company’s $180 million Series D round in April 2022, which included existing backers like WestBridge Capital, Shell Ventures, and Nexus Venture Partners. The automaker’s stake in Rapido was purchased for ₹1.14 billion at the time. In the latest transaction, Accel acquired 11,997 preference shares, while Prosus purchased 11,988 preference shares and 10 equity shares, with both investors paying approximately ₹1.44 billion each.
This investment by Accel marks a return to India’s ride-hailing sector for the firm, which was an early investor in Ola. The move is seen as a strategic one, given that Rapido is in talks with Accel and Prosus for a new primary funding round that could close next year. The exact funding size has yet to be determined, but the development is expected to further boost Rapido’s growth and expansion plans.
Prosus, which is already an investor in Rapido, expanded its stake in the company through a secondary share sale in September, when Swiggy sold its entire holding. This transaction doubled Rapido’s valuation to $2.3 billion, underscoring the company’s growing presence in India’s ride-hailing market. The investment by Accel and Prosus is a testament to the potential of India’s ride-hailing sector, which is expected to continue growing in the coming years.
As the Indian ride-hailing market continues to evolve, players like Rapido are poised to play a significant role in shaping the sector’s future. With the backing of investors like Accel and Prosus, Rapido is well-positioned to expand its services and strengthen its presence in the market. The company’s foray into the food-delivery segment is a strategic move, given the growing demand for such services in India. As the market continues to grow and mature, it will be interesting to see how players like Rapido navigate the challenges and opportunities that lie ahead.
The investment by Accel and Prosus in Rapido is a significant development, not just for the company but also for the Indian ride-hailing market as a whole. It underscores the growing interest of investors in the sector and the potential for growth and expansion that it offers. As the market continues to evolve, it is likely that we will see more investments and partnerships in the ride-hailing sector, driving innovation and growth in the years to come. With its strong investor backing and expansion plans, Rapido is poised to play a significant role in shaping the future of India’s ride-hailing market.
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