The battle for India’s ride-hailing market is heating up. Accel, a venture capital firm with a history in the sector, has made a new investment in Rapido, Uber’s primary challenger in the country. This comes as Prosus, another prominent investor, significantly increased its stake in Rapido following the exit of TVS Motor, an Indian two-wheeler giant.
This recent flurry of activity signals growing confidence in Rapido’s potential. Founded in 2015, Rapido initially focused on bike taxis, a popular and cost-effective mode of transport across India. The company has since expanded its offerings to encompass auto-rickshaw bookings, car services, and even courier deliveries. Notably, it is currently testing a food delivery service in select cities, directly targeting the dominance of Swiggy and Zomato.
TVS Motor first entered the Rapido ecosystem in 2022 during a $180 million Series D funding round, joining existing backers like WestBridge Capital, Shell Ventures, and Nexus Venture Partners. This latest transaction sees TVS Motor entirely divesting from Rapido at more than double its original investment value, netting over 152% returns in just three years.
The terms of Accel and Prosus’ respective investments reveal a significant strategic shift. While Accel paid roughly $16 million for almost 12,000 preference shares, Prosus acquired both preference shares (equivalent to Accel’s investment) and equity shares, suggesting a deeper commitment to the company’s long-term growth trajectory.
This marks Accel’s return to India’s dynamic ride-hailing market after an earlier investment in Ola, now one of Rapido’s main competitors. The timing is particularly interesting as sources indicate that Rapido is currently negotiating a fresh funding round with both Accel and Prosus, potentially concluding sometime next year.
Prosus has also been actively involved in Rapido’s trajectory. In September of this year, after Swiggy sold its entire stake, Prosus doubled down on the platform by acquiring more shares, pushing Rapido’s valuation to $2.3 billion. Notably, both Accel and Prosus are early investors in Swiggy, from whom they acquired their initial stakes in Rapido before that company exited due to a potential conflict of interest as Rapido prepared to enter the food-delivery arena.
The combined investment by these leading venture capitalists underscores their conviction in Rapido’s ability to carve out a substantial market share in India’s fiercely competitive ride-hailing landscape. Whether this signifies a new wave of consolidation or an intensifying rivalry remains to be seen, but one thing is clear: the race for dominance in India’s on-demand transportation sector is far from over.
