I was talking to a friend in Kolkata and they mentioned that they came home that day through Rapido.

“Rapido?”

“Yes, I came home on a bike.”

“?! Why doesn’t it exist in Mumbai? It would help to get through traffic faster!”

Turns out, Rapido was banned in Maharashtra in 2023 as it was operating illegally, without the necessary licensees.

However, the Maharashtra government announced this year that it will now allow bike taxis in the state with some terms and conditions (read more here.)

Urban congestion in India is a serious issue. Cities like Bangalore, Mumbai, and Delhi are known for their never-ending traffic jams.

The average commuter often spends hours stuck on the road, which both wastes time as well as adds to the stress of daily life.

The founders of Rapido recognized that there was a huge gap in the market for a more efficient, cost-effective mode of transport that could easily navigate through the heavy traffic in urban areas.

Companies like Ola and Uber had already familiarized the Indian public with the concept of booking rides via mobile apps.

By offering bike taxis, Rapido gave people a way to beat the traffic, save time, and even reduce their daily commute costs.

The timing couldn’t have been better; the market was ripe for disruption, and Rapido capitalized on it brilliantly.

Let’s look at their start-up journey!

The Founders:

Rapido was brought to life by three enterprising minds—Aravind Sanka, Pavan Guntupalli, and Rishikesh SR.

The three of them initially started with a logistics start-up called TheKarrier, but according to Sanka, they “quickly realised that shifting gears from B2B to B2C has more room for growth”.

So, they converted from supply-chain model to two-wheeler taxis, and pivoted in 2015 to create a market for the same in India from scratch.

They initially tested hired people who had bikes and tested with 15-20 of them. Once product-market fit was established, they went ahead to scale it.

Until then, no one was offering a service that was fast, affordable, and could easily weave through traffic.

Currently, the fleet consists of 1.7 million drivers, including for both bikes and cabs.

With over 2.5 million orders daily and the latest funding of $200 million at a $1.1 billion valuation, Rapido achieved unicorn status a few days ago!

The key was identifying an actual problem in with untapped potential and spearheading the market with first-of-its-kind solution.

The Problem It Solves:

Successful businesses often solve a real problem for real people. Here are 3 major issues that Rapido solves:

1. Urban Congestion: The Daily Struggle

If you've ever lived in or visited a major Indian city like Delhi, Mumbai, or Bangalore, you know that traffic is a daily nightmare.

The average commuter spends hours stuck in traffic every day, which isn’t just frustrating - it’s a massive waste of time and energy.

The existing public transportation options like buses and trains are often overcrowded and not always reliable, and traditional cabs and auto-rickshaws can be expensive, especially for daily commutes.

2. Cost-Effective Solution: How Rapido Makes a Difference

Rapido offers a bike-taxi service that’s not only quick but also light on the wallet, making it a budget-friendly option for daily commuters.

It’s not just about saving money; it’s about getting more value for the money you spend. Plus, because bikes can maneuver through traffic much more easily than cars, you’re likely to reach your destination faster, even during peak hours.

3. Last-Mile Connectivity: Bridging the Gap

One of the biggest challenges in urban transportation is the “last mile”—that final stretch between a public transport stop and your destination.

For many people, this gap is what makes commuting so difficult, and Rapido offers a solultion.

For example, you might take the metro to work, but the metro station is still a couple of kilometers away from your office. Walking isn’t always an option, and finding an auto or cab for such a short distance can be a hassle and an added expense.

It's a simple yet powerful solution to the everyday challenges faced by urban commuters in India.

Business Model:

Rapido works as a bike-taxi aggregator, which means it doesn’t own all of the bikes you see on the road.

Instead, Rapido usually connects people who own bikes, known as "captains," with passengers who need a ride, all through a simple mobile app.

However, the captains also have an option to rent a bike.

After Covid, on consumer demand, the company has also introduced auto and cab rides, enabling it to offer two, three, and four-wheeler transportation, as per consumer requirements.

The captains have the flexibility to work whenever they want, and the app handles all the logistics, from finding passengers to processing payments.

It’s a win-win situation - passengers get a quick and affordable ride, and captains get a steady income stream.

How Rapido Makes Money: Multiple Revenue Streams

Rapido’s revenue model is quite smart and diversified. Here’s how they make money:

1. Bike Ride Commissions:
45% of revenue for Rapido is the commission it takes from each ride. As the number of rides increases, so does Rapido’s revenue.

2. 0-Commission Subscription Model:
In a groundbreaking move, Rapido takes no commissions from their cabs and auto fleets, enabled through a SaaS platform.

Instead, the cab drivers pay a monthly subscription fees of Rs 500 for Rs 10,000+ monthly income, and auto drivers pay a daily fees in the range of Rs 5-29.

This model is similar to one of their competitors, Namma Yatri, which is a direct-to-driver app.

3. In-App Advertisements:
Rapido also earns money through in-app advertisements, targeted based on user data, making them more effective and lucrative.

Growing Rapidly with Minimal Investment:

One of the biggest strengths of Rapido’s business model is its scalability.

Because Rapido doesn’t own any bikes and relies on captains to bring their own vehicles, they can expand into new cities and regions with very little capital investment.

All they need to do is onboard more captains and promote the app to potential passengers.

This asset-light model allows Rapido to enter new markets quickly without needing massive upfront investments.

They are now available in 100+ cities with the bike taxis and also plan to be present in 35 cities with cab services this month.

Surprisingly, Tier-2 and Tier-3 cities saw faster growth than Tier-1:

The more cities they expand into, the more rides they facilitate, which in turn increases their revenue from commissions, subscriptions, and ads.

It’s a virtuous cycle that keeps driving growth while keeping costs relatively low.

Initial Challenges and How Rapido Navigated Them:

Regulatory Hurdles and Legal Roadblocks:

In many Indian states, the laws around bike taxis were either unclear or non-existent.

This lack of clarity led to numerous challenges, including government pushback and even temporary bans in some regions.

For instance, in Maharashtra, Rapido faced significant legal hurdles when the state government declared bike taxis illegal due to the absence of a proper regulatory framework .

Rapido lobbied for clearer regulations that would allow them to operate legally.

Over time, as the popularity of app-based transportation services grew, some states began to recognize the need for updated laws, allowing Rapido to resume operations in previously restricted areas.

Building Trust with Riders and Passengers:

With passengers hopping on the back of a bike with a stranger, there were bound to be concerns.

As with other major ride-hailing services, Rapido offers real-time tracking, increasing safety factor and acting as a deterrent against any potential misconduct.

But one issue remained - how to position a bike ride as safe apart from this? They achieved this by providing insurance at no added cost.

Rapido partnered up with Acko to provide a 100% insurance on every ride for both the customer and the Rapido captain. This is offered from the start to end duration of the ride.

These initiatives, along with mandatory safety gear like helmets (with changeable caps for passengers to maintain hygiene) helped Rapido build a reputation for safety, gradually winning over skeptics.

To increase awareness about the brand and broaden the customer base, Rapido also:

• Has a referral program through the app with rewards.

• Uses traditional methods like billboards.

• Is also present on social media.

It has also collaborated with major celebrities like Ranveer Singh and Allu Arjun to tap into their fanbases and increase credibility.

Funding Rounds:

Initially, some investors were not convinced with the idea of bike taxis in India, and Rapido remained without funding for 3 years.

But now, it is a unicorn with a valuation of $1.1 billion!

Back in 2015, Rapido received its first round of seed funding of $181K from Sol Primero, Outbox Ventures, Nikunj Jain, and McCandless Management.

As Rapido began to gain traction in the market, it was clear that the company needed more substantial funding to scale up operations and expand into new cities.

This led to a series of 7 early-stage funding rounds from April 2016-June 2020.

In these Series A and Series B rounds, it raised a total of $147.19 million from major investors like Pawan Munjhal, Thompson Taraz, Merchants Capital, Integrated Capital, Nexus Venture Partners, WestBridge Capital, and x to 10x, among many others.

Then, there were 3 late-stage rounds of funding:

• Their Series C round in May 2021 got them a funding of $58.4 million.

• A notable round was their Series D, which raised $180 million in total, majorly backed by Swiggy, which contributed around $125 million (source).

• Finally, in July 2024, Rapido joined the unicorn club by raising $200 million in Series E with a valuation of $1.1 billion!

Rapido is a story of resilience, smart market understanding, trust-building, and scalable innovation—all critical components of a successful startup.

They plan to penetrate further into their existing markets instead of looking for new geographical expansion.

Moreover, they are also planning to introduce electric vehicles, majorly in their Tier 3 and Tier 4 fleets.

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