Rapido in Talks to Raise $200 Mn from Prosus Amid Soaring Valuation

Ride-hailing platform Rapido is reportedly in discussions with global investment giant Prosus to raise approximately $200 milliion, according to a report published by MoneyControl. The fundraise is expected to increase Prosus’ stake in the start-up. Currently, Prosus holds around 3-4% stake in Rapido.

The investor has recently turned bullish on Rapido as it grew rapidly and surpassed the rivals Ola and Uber. Its move into new sectors such as food delivery with ‘Ownly’ has further stregthened investor confidence, which prompted Prosus to explore fresh deals.

“The $200 million deal could either be in the form of primary capital or via secondary deals where Prosus picks up shares from another investor. It is also possible the total round size increases if Prosus looks at doing a combination of primary and secondary deals,” sources told MoneyControl.

Rapido is currently being valued between $2.3 billion and $2.7 billion in ongoing negotiations, more than twice its $1.1 billion valuation from just eight months ago, the report said. However, the funding round is still underway. There is no official confirmation about it from Rapido and Prosus.

This comes at a time when Swiggy announced its plan to divest its stake in Rapido after it entered the food delivery sector to take on the duopoly of Swiggy and Zomato. At present, Swiggy holds about 12% stake in the ride-hailing unicorn.

In its Q1 letter, Swiggy stated that its stake in Rapido has appreciated significantly since its investment. However, the company is now “actively re-evaluating” the investment due to Rapido’s entry in its bread-and-butter food delivery industry.

“Rapido, one of our investee companies, has announced their intention to enter the food delivery space. Having scaled up from a bike-taxi player to a full-fledged mobility platform,  Rapido is now the largest mobility player in India by rides, and has been a disruptor in its space. As a shareholder, we are extremely happy with their success and value-creation; but do acknowledge a potential conflict of interest that may arise in the future,” the company said.

In fact, Uber CEO Dara Khosrowshahi has recently stated that Ola is no longer the biggest competition for Uber in India. Instead, Rapido has taken that place now. “Ola used to be out main competition. Now the tougher competition in India is Rapido,” he said.

Rapido has expanded its market presence across two- and four-wheeler categories. The company now commands about 20% of India’s ride-hailing market, narrowing the gap with Ola’s 30%. However, Uber continues to dominate the cab market with nearly half the share.

Rapido, founded in 2015, started as a bike taxi aggregator but has since diversified into auto-rickshaw and cab services too. Currently, its services are available in more than 100 cities across India.