Rapido Valuation Doubles to $2.3B After Swiggy Stake Sale

Rapido's Valuation Doubles After Swiggy Share Sale

The ride-hailing service Rapido, a significant competitor to Uber within India, has seen its company valuation increase to $2.3 billion. This growth follows a secondary share sale executed by the food delivery company Swiggy.

Swiggy Divests Stake in Rapido

This sale of shares occurs shortly after Rapido initiated a pilot program for food delivery services, directly entering a market segment where Swiggy holds a dominant position.

Regulatory documents reveal that Swiggy has completely divested its 12% ownership in Rapido, realizing ₹24 billion (approximately $270 million) through two distinct transactions.

Investment Details

Around 10% of the stake has been acquired by Prosus for ₹19.68 billion (roughly $222 million). The remaining portion, constituting 2%, has been sold to WestBridge Capital for ₹4.31 billion (about $49 million), as indicated in filings released following Swiggy’s board meeting on Tuesday.

Shared Investment and Valuation Growth

Prosus, a Dutch investment firm, already maintains investments in both Swiggy and Rapido, and currently represents the largest shareholder in Swiggy.

Rapido’s recent share sale establishes a valuation more than double its previous $1.1 billion assessment from September 2024, a figure confirmed by the company’s CEO to TechCrunch.

Rapido's Expansion into Food Delivery

In August, Rapido began a pilot food delivery program in Bengaluru, operated through its subsidiary, Ownly. This marked the company’s initial foray into a sector traditionally controlled by Swiggy and Zomato.

Aravind Sanka, co-founder and CEO of Rapido, confirmed to TechCrunch that the pilot program initially launched within three neighborhoods of the city.

Historical Investment and Partnership

Rapido’s move into food delivery occurred more than three years after Swiggy invested $180 million in the startup in April 2022.

Previously, Rapido functioned as a last-mile delivery partner for Swiggy, assisting in the fulfillment of food orders. This partnership provided Rapido with valuable insights into consumer demand and the operational difficulties encountered by restaurants, including commission structures.

Swiggy's Stake Reassessment

Earlier this year, Swiggy signaled its intention to potentially sell its stake in Rapido. A July letter to shareholders detailed a reassessment of the investment due to a possible conflict of interest, given Rapido’s planned entry into the food delivery market.

Sriharsha Majety, co-founder and CEO of Swiggy, also mentioned during a July earnings call that discussions regarding a potential collaboration in food delivery with Rapido had taken place, but ultimately did not come to fruition.

Majety stated to investors that Rapido ultimately “decided to enter the business” independently.

Impact on the Food Delivery Market

The potential impact of Rapido’s entry on established players like Swiggy and Zomato remains to be seen.

Initial expectations suggested that Rapido’s presence could compel existing companies to reduce commissions to retain restaurant partners. However, a recent update to India’s goods and services tax (GST) may limit pricing flexibility, with a uniform 18% tax now applied to online food deliveries.

Rapido's Competitive Position

Despite this, Rapido has already established itself as a strong competitor in India’s ride-hailing sector. Uber CEO Dara Khosrowshahi recently identified Rapido as Uber’s primary rival in India, surpassing Ola.

Swiggy's Focus on Quick Commerce

Concurrently, as Rapido expands into food delivery, Swiggy is strengthening its instant-commerce business, a rapidly growing sector focused on delivering groceries and other items within an hour.

Swiggy has incorporated a subsidiary dedicated to its quick commerce arm, Instamart, potentially bolstering its position in the competitive quick commerce market, which also includes Zomato’s Blinkit, Flipkart, and Amazon.

Instamart's Growth

Instamart has become Swiggy’s fastest-growing business, with its gross order value increasing by 82% to ₹146.83 billion ($1.7 billion) in FY25 – representing nearly a third of the company’s total B2C orders.

Instamart’s revenue also more than doubled to ₹22.52 billion ($254 million), exceeding the growth of the core food delivery segment, which saw a 16.4% increase in order value and an 83% rise in revenue.