Shunwei, Westbridge in talks to lead $50m funding in India’s Rapido

Photo: Rapido blog

Bike taxi startup Rapido is in advanced discussions to close a $50 million round led by domestic investment firm Westbridge Capital and China’s Shunwei Capital, said two people aware of the matter, requesting anonymity.

Existing investor Nexus Venture Partners is also participating in the round, the people said.

The startup will be valued at $200 million post the round, the people added. US’s Skycatchr, AdvantEdge and Astarc Ventures, and Hong Kong-based Integrated Capital are Rapido’s other investors.

The startup had raised $10 million in January in a round led by Nexus and Integrated Capital.

While Nexus and WestBridge declined to comment, Rapido and Shunwei did not respond to mails seeking comment.

Founded by Rishikesh S.R. Pavan Guntupalli and Aravind Sanka in 2015, Rapido operates across 13 cities, primarily in south India, including Bengaluru, Hyderabad and Mysuru, and a few cities in the north and east such as Patna and Bhubaneshwar.

The four-year-old company was banned in Karnataka and Tamil Nadu, owing to a number of issues including the non-possession of commercial vehicle license, insurance for drivers and drivers not wearing helmets.

While the Karnataka state transport department seized 200 Rapido bikes in February, the Madras high court on 18 July banned the firm, until new regulations regarding bike taxis come into place.

The Tamil Nadu government had objected to the services of Rapido as it did not come under the purview of the Motor Vehicles Act.

However, on 2 August, a division bench of the Madras high court stayed the earlier order of the single judge bench, and allowed the company to start operations.

“Rapido is also planning to go deeper into the northern markets and in Tier 2 and 3 cities, where there is significant scope for growth and no regulatory issues,” said a third person directly aware of the company’s plans, also requesting anonymity.

Rapido’s fundraise continues an emerging trend where investors are pouring in millions of dollars into startups despite the companies facing regulatory concerns.

Mint had reported on 25 April that investors are taking a long-term view on these issues, and expect them to be addressed.

Indian growth-stage startups are not the first to face these hurdles. Even startups such as Uber, which is a listed company, have constantly battled with regulators across the globe in order to find a middle ground. They have generally looked to capture the market first, and to have an advantage when regulators come knocking.

Shunwei’s investment in Rapido also marks its first deal outside the fintech and content space in India.

Spun-off from the investment arm of mobile phone maker Xiaomi, Shunwei has been one of India’s most active foreign investors at the early and growth stage, although it has so far focused on only a single sector.

The firm has almost exclusively invested in content startups—gaming and social media among others. It has backed companies such as ShareChat, Dailyhunt, Pratilipi and Krazybee.

“The strategy to invest in bike mobility in India follows Shunwei’s strategy in China, where Xiaomi is a major investor in Ofo, China’s leading bike-sharing firm,” said the third person cited above.

This article was first published on livemint.com.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.