Swiggy Sells Entire Stake in Rival Rapido for $270 Million as Competitor Doubles Valuation to $2.3 Billion
A prominent Indian ride-sharing service, Rapido, has seen its valuation soar to $2.3 billion after a secondary share sale by food delivery juggernaut Swiggy. The transaction was completed through two separate deals, with Prosus acquiring 10% of the stake for approximately $222 million and WestBridge Capital purchasing the remaining 2% for around $50 million.
Swiggy’s divestment comes shortly after Rapido initiated a pilot program for food delivery, encroaching upon Swiggy’s primary domain. The new venture marks Rapido’s entry into an industry previously dominated by Swiggy and its main competitor Zomato.
Aravind Sanka, co-founder and CEO of Rapido, confirmed to media outlets that the food delivery pilot launched in August in Bengaluru, initially operating in three neighborhoods within the city.
Notably, Prosus is a common investor in both Swiggy and Rapido, with the Dutch investment group holding the largest stake in Swiggy. This secondary sale significantly increases Rapido’s valuation from its $1.1 billion evaluation in September 2024.
In addition to food delivery services, Rapido has also partnered with Swiggy as a last-mile delivery provider, facilitating the fulfillment of orders on Swiggy’s platform. This partnership provided Rapido valuable insights into customer demand patterns and the operational challenges faced by restaurants on Swiggy’s platform, including commission requirements to secure orders.
While Swiggy initially hinted at potential collaboration in food delivery with Rapido earlier this year, discussions did not materialize, according to Swiggy co-founder and CEO Sriharsha Majety. The ride-hailing service’s entry into the food delivery sector may have implications for industry leaders like Swiggy and Zomato, but it is still early to determine the extent of these effects.
In response to Rapido’s emergence in the food delivery market, Swiggy has been expanding its instant commerce business, which focuses on quick deliveries of groceries and other essential items within an hour. The company recently announced the formation of a step-down subsidiary for Instamart, its fast-growing quick commerce arm, to strengthen its competitive position in India’s burgeoning quick commerce market.
Instamart has become Swiggy’s most rapidly expanding business segment in recent months, with gross order value surging by 82% to $1.7 billion and revenue more than doubling to $254 million in FY25, accounting for nearly one-third of the company’s total B2C orders.
