Rapido, the bike-taxi startup, faced a substantial increase in losses during the fiscal year 2023, witnessing a surge of nearly 54%. The losses reached Rs 675 crore, a significant jump from Rs 439 crore in the preceding fiscal year. Several factors contributed to Rapido’s mounting losses, including an escalation in riders’ costs, increased IT expenses, and rising employee benefits.
According to a report from Entrackr, a substantial portion of the overall expenditure, constituting 44%, was attributed to incentives and charges paid to riders. This expense surged to Rs 517 crore in FY23, marking a considerable increase from Rs 214 crore in FY22.
However, amidst these challenges, Rapido’s revenue from operations experienced a remarkable threefold increase, reaching Rs 443 crore in FY23, compared to Rs 145 crore in FY22. This growth, as reported in the financial statements filed with the Registrar of Companies (RoC), underscores the company’s ability to generate revenue despite facing increased losses.
In a strategic move, Rapido entered the cab business in the previous month by launching Rapido Cabs, an intra-city, SaaS-based mobility solution. With a 60% market share in bike taxis, the startup expanded its footprint by introducing an initial fleet of 1 lakh vehicles through Rapido Cabs.
Pavan Guntupalli, the Co-founder of Rapido, emphasized an innovative approach to minimize costs for drivers. He highlighted that drivers only incur a minimal software usage fee, marking a significant shift in the industry’s dynamics. This approach aims to enhance the sustainability of the business model and address challenges posed by escalating expenses.
Founded in 2015, Rapido has grown to operate in over 100 cities, boasting over 25 million app downloads. Tracxn data reveals that Rapido has successfully raised a total of $324 million in funding. In April of the previous year, the company secured a substantial $180 million in funding, led by the online food delivery service Swiggy.
Rapido’s foray into the cab business with Rapido Cabs reflects a strategic diversification to capture a broader market segment. This move aligns with the startup’s goal to establish a comprehensive presence in the mobility solutions sector. The introduction of a SaaS-based approach demonstrates the company’s commitment to leveraging technology for efficient operations and cost management.
Despite the financial challenges evidenced by the surge in losses, Rapido’s threefold increase in revenue signifies a notable success in growing its top line. The bike-taxi startup’s ability to adapt to market dynamics, expand its service offerings, and secure substantial funding demonstrates resilience and strategic foresight.
With a significant market share in bike taxis, Rapido remains a key player in the rapidly evolving mobility solutions landscape. The expansion into cab services positions the company to compete more comprehensively in the urban transportation sector. The Co-founder’s emphasis on minimizing costs for drivers through an innovative fee structure further highlights the startup’s commitment to creating a sustainable and driver-friendly ecosystem.
As Rapido continues to navigate the challenges of the evolving market, its financial performance, strategic initiatives, and ability to innovate will be closely monitored. The dynamics of the mobility solutions sector, coupled with the startup’s commitment to technology-driven solutions, will likely play a crucial role in shaping Rapido’s trajectory in the coming years.