Indian riding company Rapido said Friday it raised $240 million in new funding at a $3 billion valuation to better compete in the country’s growing but challenging mobility market.
Led by Prosus, the equity round was led by existing investors including WestBridge Capital and Accel. The round was part of a larger primary and secondary financing of $730 million. Rapido was previously valued at $2.3 billion during a secondary transaction last year.
Rapido said the new capital will be used to increase its footprint in high-growth markets, strengthen its driver network and invest in technology and platform efficiency.
“We are moving deeper into markets where there is demand but supply remains fragmented,” said Rapido co-founder Aravind Sanka. “We will sharpen our focus on strengthening the offering, building technologies and expanding our footprint in multiple ways, with much greater speed and intent.”
The funding round underscores continued 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 driven its growth by enabling ride-hailing for low-cost and more flexible modes of transportation, such as motorcycles and autorickshaws, in India’s busy, price-sensitive cities. The Bengaluru-based startup is also expanding into smaller cities.
The funding comes on the heels 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 through two new technology campuses and a local data center partnership. Uber earlier this year pumped $330 million into its Indian subsidiary as it sought to strengthen its presence amid growing competition from local rivals such as 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 most challenging markets in the world due to intense price competition, supply issues, high driver incentive costs and evolving local regulations. However, Rapido has rapidly expanded its market share, even entering the food delivery space through its subsidiary Ownly last year.
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