Accel Backs Rapido, Prosus Increases Stake - Ride-Hailing News

Investment Shifts at Rapido: Accel and Prosus Increase Stakes

Accel has made a new investment in Rapido, the ride-hailing service challenging Uber's dominance within India. Simultaneously, Prosus has bolstered its existing ownership position.

TVS Motor Divests Entire Holding

The investment follows the complete sale of its Rapido shares by Indian motorcycle manufacturer TVS Motor. This transaction was officially documented in a stock exchange filing on Thursday (PDF).

TVS Motor realized a profit exceeding 152% on its investment over the last three years, securing ₹2.88 billion (approximately $32 million) from Accel and MIH Investments, the investment arm of Prosus.

Rapido's Growth and Service Expansion

Established in 2015, Rapido has become a significant competitor in the Indian ride-hailing landscape. It initially focused on bike taxis and has since broadened its services to include auto-rickshaws, car bookings, and parcel delivery.

More recently, the company has been testing a food delivery service in select cities, directly competing with established players like Swiggy and Zomato.

TVS Motor's Initial Investment

TVS Motor first invested in Rapido in April 2022, participating in the company’s $180 million Series D funding round. Existing investors at that time included WestBridge Capital, Shell Ventures, and Nexus Venture Partners.

The initial stake was acquired for ₹1.14 billion, as disclosed in previous investor reports (PDF).

Details of the Latest Transaction

In this latest round, Accel acquired 11,997 preference shares, while Prosus purchased 11,988 preference shares alongside 10 equity shares. Each investor contributed approximately ₹1.44 billion (around $16 million).

Accel Returns to Ride-Hailing

Accel’s renewed investment in Rapido signifies a return to the Indian ride-hailing sector for the firm, which previously invested in Ola.

Sources indicate that Rapido is currently in discussions with Accel and Prosus regarding a new primary funding round anticipated to close next year. The specific funding amount is still under discussion.

Prosus Continues to Invest

Prosus has been actively increasing its stake in Rapido. A secondary share sale in September saw Swiggy divest its entire holding, which simultaneously doubled Rapido’s valuation to $2.3 billion, as reported by TechCrunch.

Shared Investments and Potential Conflicts

Both Accel and Prosus are also early investors in Swiggy. Swiggy exited its Rapido investment due to a potential conflict of interest, stemming from Rapido’s planned expansion into the food delivery market.

Investor Response

Requests for comment from Accel and Prosus went unanswered. Rapido was also unavailable for comment.