Food and grocery delivery platform Swiggy has initiated the process of divesting its approximately 12 percent stake in ride-hailing startup Rapido, according to people familiar with the matter.
The company is targeting proceeds of up to Rs 2,500 crore ($300 million) from the sale, in what would mark a full exit from the little over three-year-old investment.
This deal would peg Rapido's valuation at $2.7-3 billion, a significant markup to its valuation of $1.1 billion last year, on the back of rapid growth. Rapido competes with players such as Uber and Ola in the ride hailing space.
The move comes as Swiggy faces intensifying pressure on its balance sheet. The Bengaluru-based firm has reported widening losses for five consecutive quarters, with net losses of Rs 2,278 crore ($268 million) in the past two quarters alone. Over the past nine quarters, cumulative losses have crossed Rs 6,600 crore ($785 million), depleting the company’s cash reserves.
As of the June quarter (Q1 FY26), Swiggy held cash and equivalents of Rs 5,354 crore. A successful exit from Rapido would bolster that figure significantly, providing much-needed ammunition as it competes with rivals such as Eternal owned Zomato and Blinkit, Zepto, Big Basket and Flipkart for a larger pie of the red hot quick commerce sector in India.
Swiggy’s investment in Rapido, which offers two-wheeler, three-wheeler and four-wheeler rides, was seen as a strategic bet back in April 2022. However, the management said in its earnings call last month that it is now weighing options to monetise its stake and avoid a conflict of interest, as Rapido prepares to enter the food delivery business.
“As a shareholder, we are extremely happy with their success and value-creation; but do acknowledge a potential conflict of interest that may arise in the future. Our ~12% minority stake has appreciated significantly since our investment, basis incoming interest, and we are actively re-evaluating our investment due to the above developments,” Swiggy had said in its letter to shareholders last month.
Swiggy and Rapido did not respond to Moneycontrol’s queries.
Returns of 2.5X
If Swiggy successfully finds large institutional buyers at this price, the company would have made a 2.5X return on its three-year old investment of $120 million (around Rs 950 crore) in Rapido.
When Swiggy led Rapido’s $180 million round in 2022, the ride-hailing company was valued at $827 million. The company’s valuation then increased to $1.1 billion in a July 2024 round when it raised money from WestBridge and others.
Since then, in about a year’s time, Rapido’s business has grown around 120 percent, bringing its annualised gross merchandise value (GMV) to around $2.2 billion. That blistering pace of growth has prompted Swiggy to now peg Rapido’s valuation at around $2.7-$3 billion, a 2.5X increase in valuation in just a year’s time, the sources cited above said.
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While secondary transactions typically happen at a discount of 20-30 percent, Rapido is being valued at 1.3 times its GMV, in this round, because it has grown its scale and become the dominant player in the ride-hailing space, ahead of Uber and Ola.
Industry players are typically valued at 1X their GMV but Rapido has been able to command a premium given its rapid pace of growth and quick diversification away from just bike taxis to ride-hailing and now food delivery.
To be sure the current transaction will only mean that shares of Rapido are transferred from Swiggy to another investor and none of the money will go directly into Rapido’s coffers.
Rapido, on the other hand, is well capitalised. It has $150-160 million of cash at bank and has limited its monthly cash burn to around $3 million, people aware of the developments told Moneycontrol.
Swiggy will look to complete the transaction over the next three months.
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