In a significant demonstration of growth and improved financial discipline, Prosus-backed mobility startup Rapido has reported an impressive 46.3% increase in operational revenue, reaching Rs 648 crore in FY24. The company has simultaneously managed to reduce its losses by 45%, marking a crucial milestone in its journey toward profitability in India’s competitive ride-hailing market.
The Bengaluru-based startup, which recently achieved unicorn status with a $200 million Series E funding round led by WestBridge Capital, has shown remarkable revenue growth trajectory, scaling 4.4 times from Rs 145 crore in FY22 to Rs 648 crore in FY24. This growth comes alongside strategic cost optimization measures that have significantly improved the company’s financial health.
Strong Performance Across Segments
Rapido’s core transportation services, encompassing two-wheelers, three-wheelers, and four-wheelers, contributed 55.9% of the operating revenue, growing by 48.4% to reach Rs 362 crore in FY24. The company’s diversification into delivery and subscription services has also paid off, generating Rs 265 crore and Rs 19 crore respectively, with the latter showing an impressive growth rate of 171.4%.
The company’s gross platform income reached Rs 505 crore, including Rs 144 crore in customer discounts, indicating a strong focus on customer acquisition while maintaining financial discipline. The total revenue, including other allied services and non-operating income, reached Rs 695 crore in FY24, up from Rs 497 crore in the previous year.
Strategic Cost Management
Rapido’s improved financial performance can be attributed to effective cost management across key areas. The company reduced partner incentives, its largest cost center, by 11% to Rs 460 crore. Employee costs were cut by 16.9% to Rs 172 crore, while marketing expenses saw a 10.8% reduction to Rs 214 crore. These measures helped bring down the overall loss to Rs 371 crore in FY24 from Rs 675 crore in FY23.
Market Position and Future Outlook
According to internal documents, Rapido has now surpassed Ola to become India’s second-largest ride-hailing player, following Uber. The company’s success in the autorickshaw segment, which contributes 40% of its GMV, along with equal contributions from bikes and cabs at 30% each, demonstrates its strong market positioning. Notably, bike taxis account for over 50% of total ride volume, highlighting the company’s strength in this segment.
Implications for Indian Startup Ecosystem
Rapido’s performance offers valuable insights for India’s mobility startup ecosystem. The company’s ability to achieve significant growth while reducing losses demonstrates the viability of a balanced approach to expansion and fiscal responsibility. This is particularly relevant as the sector grapples with profitability challenges and evolving regulatory landscapes.
The company’s successful fundraising, bringing its total raised capital to over $500 million, also indicates continued investor confidence in India’s mobility sector, despite broader market uncertainties. Rapido’s expansion into over 100 cities, including tier 2 and 3 markets, suggests significant growth potential beyond metropolitan areas.
Looking Ahead
While Rapido has made significant strides in improving its financial metrics, spending Rs 1.65 to earn one rupee indicates that the path to profitability still presents challenges. However, with daily rides surging to 2.5 million and a strong presence across multiple vehicle segments, the company appears well-positioned to capitalize on India’s growing mobility market while maintaining its focus on sustainable growth.
