Three points you will get to know in this article:
- Rapido’s 2023 revenue soared threefold to Rs 443 crore, serving 10 million customers.
- Higher expenses led to increased losses of Rs 675 crore, impacting ROCE and EBITDA margins.
- Rapido’s resilience showed in entering cab aggregation with ‘Rapido Cabs,’ bolstering financial standing amid challenges.
In the early stages of the fiscal year 2023, Rapido successfully secured an impressive $180 million in funding from prominent backers such as Swiggy, WestBridge, TVS Motor, Shell Ventures, and Nexus Ventures. This substantial financial infusion played a pivotal role in catapulting Rapido’s growth by threefold, providing the company with enhanced flexibility in managing expenses.
Tripled Revenue and Operational Scale
As reflected in Rapido’s annual financial statements, sourced from the Registrar of Companies, the results speak volumes. The revenue from operations for Rapido experienced a remarkable threefold surge, escalating from Rs 145 crore in FY22 to an impressive Rs 443 crore in the fiscal year ending March 2023. This not only underscores Rapido’s robust financial performance but also highlights the significant strides made in expanding its operational scale.
Rapido boosts its earnings through an array of services, including bike taxis, autos, and delivery solutions, complemented by subscriptions and marketing revenue. The primary financial stream for Rapido stems from the income generated by its delivery services.
Impressively, the company has garnered more than 25 million downloads, boasting a substantial network of over 1 million dedicated captains (riders) and serving a vast customer base of 10 million individuals. With a footprint extending across more than 100 cities in India, Rapido has firmly established its presence nationwide. Notably, the company diversifies its income streams with an additional non-operating revenue of Rs 54 crore derived from the interest on current investments. This adds up to a comprehensive total income of Rs 497 crore for the fiscal year 2023.
Enhanced Total Income and Non-Operating Revenue
Shifting the focus to expenditures, a significant portion—44% to be precise—of the overall costs is attributed to incentives and charges disbursed to the dedicated captains (riders). Demonstrating substantial growth, these costs soared to Rs 517 crore in the fiscal year 2023, marking a substantial 2.4X increase from the Rs 214 crore recorded in the previous fiscal year. Furthermore, the company witnessed a notable surge of 93.5% in employee benefits during the preceding fiscal period.
In the financial year 2023, Rapido experienced a significant surge in overall expenses, skyrocketing by 96.31% to reach Rs 1,172 crore, up from Rs 597 crore in the previous fiscal year. This increase can be attributed to various factors such as advertising, promotions, software and infrastructure costs, support services, legal fees, and other miscellaneous overheads.
The company faced notable challenges, with a substantial rise in costs related to riders, information technology, and employee benefits. This surge in expenditures led to Rapido’s losses increasing by 53.76% to Rs 675 crore in FY23, compared to Rs 439 crore in FY22. The Return on Capital Employed (ROCE) and Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) margin were particularly concerning, standing at -88.5% and -134.6%, respectively.
Venturing into Cab Aggregation
On a more granular level, the company spent Rs 2.65 to earn a rupee in the financial year 2023. These financial dynamics reflect the challenges faced by Rapido in maintaining a healthy bottom line. Despite these hurdles, the company is actively working towards optimizing its operational efficiency and financial performance.
During this fiscal year, Rapido has ventured into the world of cab aggregation through the introduction of ‘Rapido Cabs.’ Conducting initial trials in Hyderabad, Bengaluru, and Delhi-NCR, the company is taking a distinctive approach in contrast to Ola and Uber’s commission-based systems. Rapido Cab adopts the Software as a Service (SaaS) model, requiring drivers to contribute a dynamic subscription fee based on their earnings via the platform.
Although the prohibition of bike taxis in Maharashtra and Delhi circles could have impacted Rapido’s profits, the strategic move to challenge Ola and Uber through cab services is poised to positively influence the company’s financial standing. This shift not only showcases Rapido’s adaptability but also positions them uniquely in the market, demonstrating a commitment to diversification and innovation.
In fiscal year 2023, Rapido experienced exceptional growth, tripling its revenue to Rs 443 crore and diversifying income streams to Rs 497 crore. However, a 96.31% surge in expenses led to increased losses, reaching Rs 675 crore, with concerning ROCE and EBITDA margins. Despite this, the company aims to optimize operations. Venturing into cab aggregation with Rapido Cabs and reliance on SaaS indicate adaptive strategies. Prohibition of bike taxis in Maharashtra and Delhi could impact profits, but the move to challenge Ola and Uber showcases commitment to diversification and innovation, potentially positively impacting financial standing.
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