Rapido Expands into Fintech, Launching New Subsidiary
Bengaluru-based Rapido, known for its innovative carpooling services, is making a strategic shift. After establishing itself in the saturated food delivery market, the startup is now venturing into the fintech sector, planning to launch a dedicated subsidiary focused on loans and financial products.
Launch of a New Fintech Division
According to reports from Yourself, Rapido is poised to start its fintech branch as an independent unit. This initiative signifies the company’s intent to diversify its offerings amidst rising competition and regulatory challenges in the transportation industry. By venturing into financial services, Rapido aims to address a broader range of customer needs while exploring new revenue streams.
Focus on Loans and Financial Services
The forthcoming fintech arm will primarily focus on providing loans and related financial services. While the details are still in the works, the foundations for the new company are already being laid. In addition, Rapido has previously examined various products, such as insurance, retirement investments, peer-to-peer loans, and vehicle upgrading programs for its riders.
Expanding the Scope with Electric Vehicle Rentals
In an effort to enhance its fintech offerings, Rapido has also tested the rental of three-wheeled electric vehicles, which may be integrated into the new financial unit. Initially, the focus will be on services tailored to existing riders, but there is a potential for expansion into other segments of the gig economy, depending on market feedback.
Strategic Moves into Food Delivery
In March, reports indicated that Rapido was in preliminary discussions with restaurant partners to enter the food delivery sector, aiming to challenge the dominance of Zomato and Swiggy. The proposed model would adopt a zero-commission structure, potentially revolutionizing the industry’s commission frameworks and attracting numerous restaurant partnerships.
Recent Funding and Market Position
Last year, Rapido secured $230 million from investors including Prosus and Westbridge, which has enabled the startup to explore new verticals and lessen its reliance on its carpooling services. Over the past year, Rapido has emerged as one of the largest carpooling platforms, thanks to its competitive pricing and attractive offers that benefit both users and drivers, capturing significant market share.
Diversification in Response to Regulatory Challenges
As the carpooling segment matures and reaches a “state of equilibrium,” Rapido’s founders are focusing on diversifying their business model to include food delivery and fintech. This urgency is further influenced by new regulatory hurdles, such as a recent ruling from the Karnataka High Court, which could impact operations in their largest market.
With this new direction into fintech and food delivery, Rapido is well-positioned to adapt to the rapidly changing landscape of the gig economy while continually enhancing its service offerings and responding to customer demands.