Rapido Nearing Profitability, According to CEO Aravind Sanka

Bengaluru-based mobility startup Rapido, which recently secured $200 million in funding and joined the unicorn club with a valuation of $1.1 billion, is only a few months away from achieving cash-flow positivity, according to co-founder and CEO Aravind Sanka. “We are very close to becoming profitable. In a couple of months, we will be cash-flow positive,” Sanka stated.

Rapido now boasts a network of 1.7 million active monthly driver-partners, who collectively handle nearly 0.5 million orders per day across various vehicle categories, including bikes, auto-rickshaws, and four-wheeler cabs. 

“If we focus solely on two-wheelers and three-wheelers, we are far ahead of Ola and Uber,” Sanka said, estimating Rapido’s market share at over 40% across all ride types.

In FY23, Rapido reported revenues of Rs 497.5 crore, a significant increase from Rs 157.9 crore in FY22. However, losses also grew, rising from Rs 439 crore to Rs 674.6 crore during the same period, due to substantial investments in growth and expansion.

Rapido’s zero-commission model for drivers remains a key distinguishing feature. “We will never revert to a commission-based model. We are committed to being a lifetime zero-commission platform,” Sanka emphasized.

The company charges drivers a fixed monthly fee of Rs 500 for every Rs 10,000 they earn on the platform. “I wouldn’t be surprised if we never alter that fee,” he added.

Looking ahead, Rapido is focusing on the fast-growing quick commerce sector as a key growth area. The company already supports last-mile food delivery for Swiggy, which invested in its $180-million Series D round, and ONDC, where Rapido riders handle food deliveries during quieter times. Now, Rapido is talking with quick commerce companies like Zepto and Zomato’s Blinkit to offer 10-30-minute deliveries.

Sanka explained that a 10-minute to 1-hour delivery model is a great match for Rapido, thanks to the large number of drivers they have.

Rapido is also creating tools to help small direct-to-consumer (D2C) businesses use its big fleet of delivery partners. “We’re open to working with all kinds of companies. What matters is that our resources are used effectively. We’ll be partnering with logistics companies and also working directly with businesses,” he said.

On the sustainability side, Rapido has made big strides in electric vehicles. In the NCR region, over 25% of orders are now delivered by electric vehicles, and the company plans to make all deliveries in Delhi electric within the next six months. Rapido is partnering with fleet operators to build exclusive electric fleets for two-wheelers, three-wheelers, and four-wheelers.

As Rapido moves into a new growth phase, an initial public offering (IPO) might be on the horizon in the next few years. “In two to three years, we would definitely think about it as a natural step,” Sanka said, noting that Rapido’s growth and expected profitability make going public a strong possibility.

The business has already raised close to $500 million with its most recent $200 million Series E fundraising round. WestBridge Capital led the most recent round, in which Think Investments and Invus Opportunities, as well as longtime partner Nexus Venture Partners, also participated.

Tracxn reports that as of FY23, WestBridge Capital owned a 25.6% share in Roppen Transportation Services, the company that owns Rapido. Swiggy’s interest was 15.1%, while Nexus Venture Partners and Integrated Capital had respective holdings of 9.7% and 4.9%. In FY23, the combined ownership of co-founders Pavan Guntupalli, Rishikesh SR, and Aravind Sanka was 7.5%.