Flush With Fresh Funds, Rapido Seeks To Ride The Quick Commerce Wave

Amid a fierce battle in India’s quick commerce turf with major players like Blinkit, Swiggy Instamart and Flipkart’s ‘Minutes’ aggressively trying to lure away consumers from large ecommerce platforms, ride-hailing unicorn Rapido is now reportedly looking to make its foray into the booming sector.

As per TOI’s report, Bengaluru-based Rapido has kicked off discussions with Zepto, along with grocers like Pincode and KPN to ace the quick commerce vertical.

For the uninitiated, Rapido works with only two players on its B2B logistics arm, limited to food delivery – Swiggy and the government-run Open Network for Digital Commerce (ONDC).

Inc42 has reached out to Rapido for comments on the development. The story will be updated based on their response.

Responding to Inc42’s query, a Zepto spokesperson said, “these are based on market speculations and hold no value.”

As per the report, Zepto’s founder and chief executive Aadit Palicha has said that the company maintains control over more than 90% of its delivery fleet internally.

“The talks are preliminary in nature but make perfect sense since Nexus Venture Partners is a common investor in the two companies and the synergies just add up with ample supply at Rapido’s end,” a source was quoted as saying in the report.

Earlier this month, Rapido vaulted into the unicorn club after raising $200 Mn (INR 1,660 Cr) in its Series E funding round led by existing investor WestBridge Capital with a valuation of $1.1 Bn.

The round also saw participation from existing backer Nexus Venture Partners, along with new investors Think Investments and New York-based Invus Opportunities.

Founded in 2015 by Rishikesh SR, Pavan Guntupalli, and Aravind Sanka, the startup primarily operates in the bike taxi and auto transportation segments. In December last year, it also launched cab services in some cities. In addition, it also offers peer-to-peer delivery services via Rapido Local. 

On the financial front, Rapido’s net loss widened over 50% to INR 674.5 Cr in the financial year 2022-23 (FY23) from INR 439 Cr in the previous fiscal year. Operating revenue zoomed to INR 443 Cr from INR 144.8 Cr in FY22.

This comes at a time when a host of ecommerce companies have started making their way into the quick commerce race, with the market potential that it offers today.

Swiggy Instamart, Blinkit and Zepto have displayed consistent growth in its offerings, and with the companies having stretched its product lines to include deliveries of electronics, toys, home appliances and more, it has begun to cause a threat to ecommerce businesses.

Very recently, Flipkart rolled out its own line called Minutes, available on its home application, while Tata-owned BigBasket has moved from being an online grocery delivery platform to a full-scale quick commerce platform.

Earlier this year, JioMart, the digital commerce arm of Reliance Retail rolled out a pilot for instant delivery of groceries and fast-moving consumer goods (FMCG) products in some parts of Mumbai and Navi Mumbai.

To make the most of this booming demand and protect their turf amid the intensifying competition, Zepto, Swiggy Instamart and Blinkit are expanding to newer cities ahead of the festive season, while also opening multiple dark stores in the new cities to expand quickly.

“Bike taxi services peak in the morning hours during schools, offices and colleges commute time. These partnerships help utilise the vehicles efficiently throughout the day. For drivers and bikers, their earnings increase by 25% for the same time they spend on the platform,” Aravind Sanka, founder and chief executive of Rapido was quoted as saying in the report.

“Our B2B business is less than 7% of the overall business. This side does deliveries using two-wheelers,” he added.

Rapido currently handles 2.5 Mn orders per day, where these orders are spread across bike taxis, auto as well as cab rides, Sanka also said.

The company is currently offering its services in over 100 cities across the country. In addition, it also offers peer-to-peer delivery services via Rapido Local.

Sanka said that the company operates a fleet of 700,000 riders.