Bike taxi aggregator Rapido scooped $180 million at a valuation of over $800 million and joined the soonicorn list in April last year. A three fold growth in its valuation was followed by over 90% rise in the company’s scale during FY22. However, the Swiggy-backed firm continued to bleed money and its losses spiked 2.6X in the last fiscal year.
Rapido’s revenue from operations grew 91.5% to Rs 144.8 crore during the last fiscal year (FY22) from Rs 75.6 crore in FY21, according to its annual financial statement with the Registrar of Companies (RoC).
Rapido generates revenue by providing bike taxis, autos, and delivery services, along with its subscriptions and marketing income. These collections collectively stood at Rs 144.8 crore during the last fiscal year while the company also earned Rs 13.2 crore as interest on current investments and other non-operating income in FY22.
Rapido is an on-demand transportation aggregator for two and three wheelers. It also does logistics for Swiggy and other quick commerce companies. Rapido has a customer base of 30 million and it does a million rides across 100 plus cities on a daily basis.
On the expenses front, incentives and other related charges turned out to be the largest cost center contributing 35.8% of the total expenses. These payments ballooned 3X to Rs 213.6 crore in FY22 from Rs 70.6 crore in FY21. Marketing cost accounted for 29.6% of the total expense and blew up 5.4X to Rs 176.7 crore during FY22 from Rs 33 crore in FY21.
Spends on employee benefits grew 73% to Rs 107 crore during the year while it also incurred contractual labor support costs of Rs 40 crore. Importantly, employee benefits expenses also include ESOP expenses of Rs 5.8 crore. Rapido also paid out infrastructure and software charges of Rs 24.96 crore which catalyzed its total expenditure by 2.3X to Rs 597 crore in FY22 as compared to Rs 254 crore in FY21.
To achieve a 90% growth, Rapido spent more than two times as compared to the last fiscal. Thus its losses swelled 2.6X to Rs 439 crore in FY22. It also reported cash outflows from operations of Rs 437 crore in FY22 which soared 2X during the year.
Akin to rising costs and losses, EBITDA margin and ROCE weakened to -274.52% and -1029.72%. Its unit economics adversely affected and it spent Rs 4.12 to earn a rupee of operating income during the year.
Rapido has raised over $300 million since its inception and its backers include WestBridge, TVS Motor, Shell Ventures, and Nexus Ventures.
Over the past two years, Rapido and other mobility platforms have been facing regulatory pressures in several states. Last week, Rapido was in the news when the Bombay High Court asked it to suspend its services in Maharashtra or face cancellation of its license permanently. The company had now approached the apex court against the Bombay High Court orders.
Meanwhile, the Karnataka government said that Ola, Uber auto-rickshaws were illegal in October 2022. Telangana Gig And Platform Workers’ Union (TGPWU) was also seeking a ban on ride-hailing startups Rapido, Ola, and Uber in December. Similarly, in July last year, the Meghalaya transport department banned the plying of two-wheelers (bikes and scooters) operating as taxi services both online and offline in Shillong.
The legal challenges to its model have been a perennial challenge for Rapido, one that it has lived with doggedly. On the other hand, the firm does serve a market need that has been demonstrably proved in many other markets across Asia, especially South East Asia. One can hope that regulators will come around to see the value, and the impact such firms can have on local mobility as well as logistics and ensure a way to work with incumbents.
A complete pivot to a pure B2B delivery model might seem far-fetched considering the vastly different model that works there. In fact, it would be an existential crisis before Rapido, after all the effort it has put in, even considers it. Let’s hope it never comes to that for this spunky startup.