In a bold move set to shake up the food delivery industry, Rapido, the Bengaluru-based ride-hailing startup known for its bike taxis, is reportedly venturing into the food delivery market. This strategic expansion aims to challenge the dominant positions of Swiggy and Zomato, which currently hold a duopoly in the Indian food delivery landscape.
Rapido's Ambitious Plans
Rapido has experienced rapid growth since its inception in 2015, emerging as a significant player in India's ride-sharing market. The company recently surpassed $1 billion in annual gross merchandise value (GMV) and is now looking to diversify its services. According to reports, Rapido is in early talks with restaurant partners to develop a new business model that could revamp industry commission structures.
Leveraging Existing Infrastructure
Rapido's existing fleet of two-wheelers, which already handles deliveries for Swiggy and the government-run Open Network for Digital Commerce (ONDC), will be instrumental in its food delivery operations. By leveraging its established infrastructure, Rapido aims to offer a seamless and efficient food delivery service.
Strategic Investments and Expansion
The company has raised substantial funding over the past year, including $30 million in February from Dutch investment company Prosus. This followed a $200 million round led by WestBridge Capital, lifting Rapido's valuation to $1.1 billion. With these investments, Rapido plans to expand its operations to 500 cities by 2025, up from its current presence in over 100 cities.
Disrupting the Market
Swiggy and Zomato have long dominated the Indian food delivery market, but Rapido's entry could disrupt the status quo. The company is reportedly meeting with restaurant operators to discuss how to offer food delivery through its platform, potentially challenging the existing commission structures. This move comes at a time when the food delivery sector is facing a slowdown in growth, with ongoing tensions between restaurants and aggregators over commission fees.
Conclusion
Rapido's foray into the food delivery space marks a significant step in its growth strategy. By leveraging its existing infrastructure and strategic investments, the company aims to challenge the duopoly of Swiggy and Zomato, offering a more sustainable and cost-effective service model. As Rapido continues to innovate and expand, it is poised to become a major player in the Indian food delivery market.