India’s unicorn creation machine appeared to slow down in recent quarters, but it seems to be gaining momentum once again.
Rapido has joined the ranks of Indian unicorns after securing $120 million in a new funding round led by WestBridge Capital, which values the company at $1 billion. This makes Rapido the fourth startup in India to achieve unicorn status in 2024, following Krutrim, Perfois, and Porter.
Founded in November 2015 by Aravind Sanka, Pavan Guntupalli, and Rishikesh SR, Rapido initially aimed to offer affordable bike taxi services as an alternative to car-based ridesharing options like Uber and Ola. Aravind Sanka, an IIT Bhubaneswar graduate with experience at Flipkart, Pavan Guntupalli, an IIT Kharagpur alumnus, and Rishikesh SR, a PES University graduate with a background in truck aggregation, launched the service with the vision of providing cost-effective motorcycle transport.
However, Uber and Ola quickly entered the bike taxi market in March 2016, leading to significant regulatory challenges. Amidst the industry’s struggles with legal hurdles, Rapido opted to operate quietly while continuing its expansion.
The demand for affordable, speedy transportation solutions was evident, and Rapido steadily increased its footprint. By 2019, the company secured Series A funding from Nexus Venture Partners and Hero MotoCorp. While Uber and Ola dominated the cab segment, Rapido emerged as a leader in the bike taxi sector, capturing a 60 percent market share by 2022 and conducting over 1 million rides daily across 120 cities, with significant demand from Tier 2 and Tier 3 cities.
Facing challenges in the bike taxi sector, including periodic shutdowns in Karnataka and a complete exit from Maharashtra, Rapido diversified its services. In late 2020, the company launched auto-rickshaw services to compete with Uber and Ola’s offerings, and by late 2023, it expanded into the cab market, aiming to operate in 35 cities by September 2024.
Despite its expansion efforts, Rapido is yet to achieve profitability, reporting a loss of Rs. 675 crore for FY23 with revenues of Rs. 443 crore. Nevertheless, the company has established itself across bike taxis, autos, and cabs, positioning itself as a formidable competitor to Uber and Ola. As the Indian mobility sector continues to evolve with new models like subscription-based services from Namma Yatri and electric cabs from BluSmart, Rapido’s rise to unicorn status signals ongoing opportunities for innovation and value creation in the space.