On-demand convenience firm Swiggy on Thursday said it will re-evaluate its investment in ride-hailing startup Rapido, citing a potential conflict of interest in the future as the mobility venture recently entered the food delivery segment.
“Rapido is now the largest mobility player in India by rides, and has been a disruptor in its space. As a shareholder, we are extremely happy with their success and value-creation; but do acknowledge a potential conflict of interest that may arise in the future,” Swiggy said in its letter to shareholders.
“Our ~12% minority stake has appreciated significantly since our investment (basis incoming interest) and we are actively re-evaluating our investment due to the above developments.”
Swiggy led a $180-million investment in Rapido in April 2022 for a nearly 12% stake, making it the single-largest cheque in a startup by the food and grocery delivery firm. The deal was expected to help Swiggy find synergies with Rapido’s riders, who could also deliver food.
On the company’s investment in Rapido, Swiggy co-founder and chief executive officer (CEO) Sriharsha Majety had said in April, “While we’ve already been working together, this investment facilitates closer alignment to leverage the synergies between the platforms and improve the value we provide to both consumers and delivery executives/captains across the country.”
Rapido forayed into food delivery in June through a pilot called ‘Ownly’ in Bengaluru, charging restaurants a fixed fee per order.
Competition in the food delivery segment is intensifying, prompting regular food service companies to prepare items for shorter delivery timelines. Mint earlier reported how 10-minute food deliveries are emerging as a top proposition for many established and new players.
Quick commerce platforms, too, have joined the bandwagon. Zepto was the first among peers to start a quick food delivery service, Zepto Cafe, in 2022. It launched a standalone app for its food business in December last year.
In November, Bengaluru-based quick food delivery startup Swish raised $2 million from venture capital firm Accel and other investors. Swish was founded in August 2024.
Swiggy’s net loss in the June quarter doubled year-on-year to ₹1,197 crore, weighed by accelerated investments in its quick commerce arm to keep up with rising competition. The company’s consolidated revenue during the quarter under review came in at ₹4,961 crore versus ₹3,222 crore in the same period a year earlier.
Source: Mint