Mobility unicorn Rapido plans to invest in expanding its presence in multiple categories, including logistics, taxis, and four-wheelers as the company aims to increase supply and penetrate tier two and tier three cities, where growth has been rapid, co-founder and CEO Aravind Sanka told businessline.
“Currently, we are present in 100 cities and the last year, Tier 2 and Tier 3 cities grew faster than our Tier 1 cities, which showed us that there’s a huge product market fit in smaller cities as well. We’ll be launching multiple Tier-2 and 3 cities, along with penetrating our existing cities,” said Sanka.
The company currently processes 2.5 million orders daily and the fleet includes 1.7 million drivers, with significant growth in four-wheeler drivers.
Sanka said three-wheeler auto-rickshaw bookings is the single biggest contributor to its GMV with a 40% share, with bike-taxis and cabs evenly split with 30% each. However, in terms of number of rides, more than 50% still comes from two-wheeler vehicles, he said.
“Four-wheelers category is pretty new for us, so we’ll be aggressive there.,” Sanka said. “In some cities, we’re already larger than one of the incumbents in four-wheelers,” added Sanka.
Profitability and differentiator
Rapido is just a few months away from becoming cash-flow positive, said co-founder and CEO Aravind Sanka. “We are very close to profitability. In a couple of months, we will be cash-flow positive,” he said.
He stated that 30 per cent of the company’s GMV comes from four-wheelers, to double this in the next two years. The company also plans to launch airport services soon.
“If I just take two-wheeler and three-wheeler, we are way ahead of Ola and Uber,” Sanka said, pegging Rapido’s market share at over 40% when considering all ride types.
Sanka also mentioned that Rapido’s zero-commission model for drivers remains its biggest differentiator. The company charges drivers a flat monthly fee of ₹500 for every ₹10,000 earned through the platform
“We are going to be a lifetime zero-commission model,” Sanka said.
Quick-commerce frenzy
Rapido is also entering the buzzy quick commerce delivery space by utilising its two-wheeler fleet for hyperlocal deliveries, according to Sanka.
The company is now in advanced talks with multiple quick commerce players to enable 10-30-minute deliveries.
“We’re looking at how we can power quick commerce. One way of quick commerce is to do 10-minute deliveries, but there’s also 30-minute to one-hour quick commerce. We’ll be opening up for those use-cases as well,” Sanka said.
The company is also looking to invest and expand its consumer delivery side and is building tools to allow small D2C (direct-to-consumer) businesses to directly leverage its massive fleet of delivery partners.
With the company’s latest $200-million Series E funding round, Rapido has now raised close to $500 million till date. According to Tracxn, as of FY23, WestBridge Capital held a 25.6 per cent stake in Rapido’s parent entity, Roppen Transportation Services. Swiggy held 15.1 per cent, while Nexus Venture Partners and Integrated Capital held 9.7 per cent and 4.9 per cent stakes, respectively