Rapido, a well-known ride-hailing service in India that rivals Uber, has seen its valuation soar to $2.3 billion after a secondary share transaction involving food delivery leader Swiggy. This deal comes shortly after Rapido started testing food delivery services, stepping into Swiggy’s primary business area.
According to regulatory documents, Swiggy has sold its full 12% ownership in Rapido for ₹24 billion (approximately $270 million) through two separate transactions. Prosus is acquiring about 10% for ₹19.68 billion (around $222 million), while WestBridge Capital is purchasing the remaining portion for ₹4.31 billion (about $49 million), as detailed in filings released after Swiggy’s board meeting on Tuesday.
Prosus, a Dutch investment firm, is already a mutual investor in both Swiggy and Rapido and holds the largest stake in Swiggy.
This latest share transaction values Rapido at more than double its $1.1 billion valuation from September 2024, a number that the company’s CEO confirmed to TechCrunch.
In August, Rapido launched a pilot food delivery service in Bengaluru through its subsidiary Ownly. This initiative marked Rapido’s first step into a market long led by Swiggy and its main competitor, Zomato. Rapido’s co-founder and CEO, Aravind Sanka, told TechCrunch that the pilot started in three neighborhoods in the city.
Rapido’s move into food delivery comes more than three years after Swiggy invested in the company during a $180 million funding round in April 2022.
Rapido has also worked with Swiggy as a last-mile delivery partner, helping to complete food deliveries on the platform. This early collaboration allowed Rapido to gain insights into customer preferences and the operational hurdles faced by restaurants, such as the commissions required for order fulfillment, according to a source familiar with the matter who spoke to TechCrunch.
Earlier this year, Swiggy suggested it might divest its stake in Rapido. In a letter to shareholders in July, Swiggy said it was reconsidering its investment in Rapido due to a possible conflict of interest, as Rapido was preparing to enter the food delivery space. Swiggy’s co-founder and CEO, Sriharsha Majety, also noted during a July earnings call that the company “even had some conversations around a potential collaboration in food delivery with Rapido.”
“Unfortunately, that didn’t materialize, and Rapido decided to enter the business,” Majety told investors on the call.
It remains too soon to determine if Rapido’s new food delivery venture will impact established players like Swiggy and Zomato.
Rapido’s arrival was anticipated to push existing companies to reduce their commission rates to keep restaurant partners. However, a recent Goods and Services Tax (GST) change by the Indian government may restrict pricing strategies, as a flat 18% tax is now imposed on online food orders, making price competition less effective.
Even so, Rapido has already established itself as a major force in India’s ride-hailing sector. Uber CEO Dara Khosrowshahi recently named Rapido as Uber’s top competitor in India, rather than Ola, which is backed by SoftBank.
While Rapido expands into food delivery, Swiggy is focusing on growing its instant commerce division, a fast-paced sector that promises delivery of groceries and other essentials in under an hour.
Swiggy has announced the creation of a step-down subsidiary for its rapidly expanding quick commerce business, Instamart. This move is expected to bolster its standing in India’s competitive quick commerce landscape, which features rivals like Zomato’s Blinkit, Flipkart, and Amazon. The new structure could also set the stage for a potential spin-off or separate fundraising for Instamart in the future.
Instamart has become Swiggy’s fastest-growing segment in recent months, with gross order value jumping 82% to ₹146.83 billion ($1.7 billion) in FY25 (PDF), accounting for nearly one-third of Swiggy’s total B2C orders. Instamart’s revenue more than doubled to ₹22.52 billion ($254 million), surpassing the growth of the main food delivery business, which saw a 16.4% increase in order value and an 83% rise in revenue.
