Accel Invests in Uber Rival Rapido as Prosus Increases Stake
▼ Summary
– Accel invested in Rapido and Prosus increased its stake after TVS Motor sold its entire holding for ₹2.88 billion, yielding a 152% return over three years.
– Rapido, founded in 2015, competes with Uber and Ola in India’s ride-hailing market and has expanded from bike taxis to auto-rickshaws, cars, courier services, and pilot food delivery.
– TVS Motor initially invested ₹1.14 billion in Rapido’s Series D round in 2022, joining backers like WestBridge Capital and Shell Ventures.
– Accel and Prosus each paid about ₹1.44 billion for shares in the transaction, with Accel re-entering India’s ride-hailing sector after previously investing in Ola.
– Rapido is in talks with Accel and Prosus for a new primary funding round next year, following a recent secondary sale that doubled its valuation to $2.3 billion.
In a significant development for India’s competitive mobility sector, venture capital firm Accel has made a strategic investment in Rapido, a homegrown ride-hailing service that directly challenges global giants like Uber. Simultaneously, global consumer internet group Prosus has increased its existing stake in the company. This transaction was facilitated by Indian automotive leader TVS Motor, which divested its entire shareholding in Rapido.
TVS Motor officially announced the sale through a regulatory filing on Thursday, confirming it sold its stake for a total of ₹2.88 billion, equivalent to approximately $32 million. This divestment provided the automaker with a substantial return on investment exceeding 152% over a three-year period. The buyers were identified as Accel and Prosus’s investment arm, MIH Investments.
Launched in 2015, Rapido has carved out a significant presence in India’s bustling transportation market. The platform first gained popularity with its motorcycle taxi services before diversifying into auto-rickshaw and car bookings. More recently, the company has expanded its offerings to include courier services and is currently testing a food-delivery operation in specific cities, a market space largely controlled by Swiggy and Zomato.
TVS Motor initially entered Rapido’s cap table in April 2022, participating in the startup’s $180 million Series D funding round. At that time, the automaker invested ₹1.14 billion to acquire its stake, joining other investors such as WestBridge Capital, Shell Ventures, and Nexus Venture Partners.
The specifics of the recent transaction reveal that Accel purchased 11,997 preference shares, while Prosus acquired 11,988 preference shares along with 10 equity shares. Each investor contributed roughly ₹1.44 billion, or about $16 million, for their respective portions of the deal.
This investment marks a notable re-entry for Accel into the Indian ride-hailing scene, having been an early supporter of Ola. The financial injection occurs as Rapido is reportedly in advanced discussions with both Accel and Prosus regarding a new primary funding round, which sources indicate could be finalized next year. The precise amount for this upcoming round remains undetermined.
Prosus, already a supporter of Rapido, further solidified its position by increasing its stake through a separate secondary share sale that took place in September. This earlier transaction, which involved Swiggy selling its entire holding, was reported to have effectively doubled Rapido’s valuation to an impressive $2.3 billion.
Notably, both Accel and Prosus are also early-stage investors in Swiggy. The food-delivery giant exited its position in Rapido, citing a potential conflict of interest as the ride-hailing platform began its own foray into the competitive food-delivery segment.
Requests for comments from Accel, Prosus, and Rapido regarding the latest investment were not returned.
(Source: TechCrunch)
