Food and grocery delivery platform swiggy (Swiggy) Ride-linge startup rapido (Rapido) In the process of selling close stake in its 12% has started. Moneycontrol has received this information quoting sources. Swiggy’s investment in Rapido has been a little more than three years. The company aims to get ₹ 2500 crore with this purchase. The deal has increased the valuation of Rapido strongly and last year with a $ 110 crore valuation, its valuation in Swiggy Deal reached $ 270- $ 300 crore. Rapido has a competition with companies like Uber and Ola in the domestic market.
How is the business health of swiggy?
Swiggy is selling its stake in Rapido at a time when there is a lot of pressure on its balance sheet. It is in loss for five consecutive quarters, out of which its net deficit in the last two quarters is ₹ 2,278 crore ($ 26.8 crore). Its total deficit in the last nine quarters crossed ₹ 6,600 crore ($ 78.5 crore), declining the company’s cash reserve. On the other hand, Rapido has a cash of $ 15-16 crore and its monthly cash burn is limited to about $ 30 lakh.
What will be the benefit of Swiggy on selling stake in Rapido?
At the end of the June quarter, the company has a cash of ₹ 5,354 crore and its equivalent. Now this amount can increase significantly by selling the entire stake in Rapido. This will give Swiggy a strong capital to compete in the Quick Commerce sector with Big Baskets and Flipkart, including the Article (ZOMATO) and Blinkit of Eternal. About three years ago, when Swiggy invested in Rapido in the year 2022, it was considered an important strategic investment but in the earnings call last month, the company said that now it is considering selling its stake so that the conflict of interest can be stopped as Rapido is preparing for entry in food delivery business. Swiggy plans to complete the deal in three months.
Will you get two and a half times returns?
If Swiggy finds big institutional investors to sell its stake as per the plan, it will get two and a half times the return of $ 12 crore (₹ 950 crore) in Rapido. When Swiggi put money in Rapido’s $ 18 crore round in 2022, Rapido’s valuation was $ 82.7 crore which increased to $ 110 crore in July 2024, when the company raised money from other investors including Westbridge. Since then, Rapido’s business has increased by about 120% in a year and its annual Grass Merchandise Value (GMV) has also reached $ 220 crores. Due to this growth, Swiggi has now fixed Rapido’s valuation around $ 270- $ 300 crore.