Indian ride-hailing company Rapido said on Friday it had raised $240 million in fresh funding at a $3 billion valuation to compete better in the country’s growing but challenging mobility market.
Led by Prosus, the equity round saw participation from existing investors, including WestBridge Capital and Accel. The round was part of a larger $730 million primary and secondary financing. Rapido was previously valued at $2.3 billion during a secondary transaction last year.
Rapido said the fresh capital would be used to increase its footprint in high-growth markets, strengthen its driver network, and invest in technology and platform efficiency.
“We are going deeper into markets where demand exists, but supply remains fragmented,” Rapido co-founder Aravind Sanka said in a statement. “We will sharpen our focus on strengthening supply, building technologies, and expanding our multi-modal footprint, with far greater speed and intent.”
The funding round underlines continuing investor interest in India’s mobility sector despite persistent concerns about pricing pressures, regulation, and profitability.
Founded in 2015, Rapido operates in more than 400 cities, and has spurred its growth by enabling ride-hailing for lower-cost and more flexible modes of transport such as motorbikes and autorickshaws in India’s congested, price-sensitive cities. The Bengaluru-based startup has been expanding to smaller towns, too.
The funding comes in the wake of Uber CEO Dara Khosrowshahi’s visit to India, where the ride-hailing giant this week unveiled plans to expand its engineering and infrastructure operations via two new technology campuses and a local data center partnership. Uber earlier this year infused $330 million into its India subsidiary as it sought to strengthen its presence amid growing competition from local rivals like Ola, Rapido, and Namma Yatri.
Khosrowshahi said last year that Rapido had overtaken Ola as Uber’s biggest competitor in the country.
India is currently one of the world’s most challenging ride-hailing markets because of intense price competition, supply issues, high driver incentive costs and evolving local regulations. Nevertheless, Rapido has rapidly expanded its market share, even entering the food delivery business through its subsidiary Ownly last year.
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