Swiggy is planning to sell its 12 per cent stake it holds in Rapido and Dutch investment firm Prosus NV is reportedly looking to invest $150-180 million to acquire the largest portion of Swiggy’s stake in Rapido, according to a report by Mint.
Swiggy had acquired the 12% stake in April 2022 for $180 million. At the proposed valuation, Swiggy’s stake is likely to be worth over $320 million, or Rs 2,825 crore. Rapido is “likely to be valued at $2.5-2.7 billion” for the stake sale, one source told Mint. The company had earlier been valued at $1.1 billion during its $200 million Series E round led by WestBridge Capital in September last year.
Swiggy to Reassess Rapido Investment
According to Mint, Swiggy informed its shareholders in July that it would reassess its investment in Rapido. Swiggy’s 2022 investment was initially viewed as a partnership, with Rapido’s riders also serving as delivery couriers. However, Rapido’s entry into the food delivery business has now made it a potential competitor for Swiggy.
“Swiggy is running an independent process to look for buyers of its stake in Rapido. Some new investors, including private equity firms and large family offices, have also been approached,” a source told Mint.
Rapido Gains Global Attention
Rapido’s food-delivery service, Ownly, charges restaurants in Bengaluru roughly half the commission levied by Swiggy and Zomato, its larger rivals. The company has also set up a wholly owned subsidiary called Ctrlx Technologies for its food-delivery service, with co-founder Aravind Sanka and VP–Finance Vivek Krishna named as directors.
Investor Interest Grows as Swiggy Looks to Exit
On one hand, while Swiggy is trying to sell its stake, other investors are looking to increase their holdings in Rapido, which has raised over $500 million since its launch in 2015 and is expected to grow further.
“The existing investors want to double down on Rapido, given that the company has turned around and is expected to deliver bigger wins once it lists,” a source told Mint.
As of June, Prosus owned 2.7% of Rapido, while Nexus Venture Partners and WestBridge held 9.9% and 19%, respectively, according to data from Tracxn. Rapido co-founders Pavan Guntupalli and Aravind Sanka each own 4.8%, while co-founder Rishikesh S.R. holds 1.8%.
Other investors, including TVS Motor, Yamaha Motor, and Shell International BV, are also likely to increase their stakes, the source added. Swiggy has appointed Avendus Capital to assist with the stake sale.