Prosus-backed mobility unicorn Rapido has posted a strong financial performance for FY24, reporting a significant 4.4x growth in operating revenue, which reached Rs 648 crore, up from Rs 145 crore in FY22. The company also made notable strides in reducing its losses, which were cut by 45%, owing to effective cost management strategies.
According to Rapido’s consolidated financial statements, its operating revenue surged by 46.3% in FY24, up from Rs 443 crore in FY23. The bulk of this growth came from the transportation services offered on its platform. Net income from these services, covering two/three-wheelers and four-wheelers, constituted 55.9% of total operating revenue, rising 48.4% to Rs 362 crore.
However, the company’s gross platform income from these services stood at Rs 505 crore, which includes Rs 144 crore in customer discounts. Revenue from delivery and subscription services amounted to Rs 265 crore and Rs 19 crore, marking growth rates of 39.5% and 171.4%, respectively, in FY24. Additional income from allied services and non-operating activities brought Rapido’s overall revenue to Rs 695 crore in FY24, compared to Rs 497 crore in FY23.
Efficient Cost Management Amid Revenue Growth
Incentives paid to partners remained the largest expense for Rapido, accounting for 43% of the company’s total expenses. However, the company managed to reduce this cost by 11%, bringing it down to Rs 460 crore in FY24. Furthermore, Rapido made efforts to reduce employee costs by 16.9%, which totaled Rs 172 crore, while marketing expenses decreased by 10.8% to Rs 214 crore.
Despite a higher cost base, including technology, support services, legal, rent, and other overheads, Rapido’s financial management helped it reduce its losses by 45%, down to Rs 371 crore in FY24 from Rs 675 crore in FY23. However, the company’s return on capital employed (ROCE) and EBITDA margins stood at -90.7% and -52.5%, respectively. On a per-unit basis, the company spent Rs 1.65 to earn one rupee.
Decline in Bank Balances and Trade Receivables Surge
Rapido’s bank balance, excluding cash equivalents, saw a steep drop of 88.1%, amounting to Rs 16.39 crore in FY24, while cash equivalents also declined by 75.3%, to Rs 71.71 crore. However, trade receivables doubled from Rs 16 crore in FY23 to Rs 32.06 crore in FY24, indicating an increase in outstanding payments.
Unicorn Status and Market Position
Recently achieving unicorn status, Rapido secured $200 million in a Series E funding round led by WestBridge Capital, bringing its total raised capital to over $500 million. According to internal documents reviewed by Entrackr, Rapido has surpassed Ola to become the second-largest player in India’s ride-hailing market, following Uber. The company claims that auto-rickshaws now contribute 40% of its Gross Merchandise Value (GMV), with bikes and cabs each contributing 30%. In terms of ride volume, bike taxis alone account for over 50% of total rides.
Despite the growth, the company faces challenges in achieving profitability. The ride-hailing market, particularly bike taxis, has proven its value to users, but profitability remains elusive. The lack of profitability has been a concern for many players in the space, including Uber and Ola, and Rapido must continue to manage its costs effectively to bridge the margin gap.
One of the key challenges is the issue of drivers opting to cut out the aggregator, and while this issue has not reached the same proportions for Rapido as it has for other players, it remains a concern. The company also needs to ensure that it doesn’t spread itself too thin as it grows.
The green aspect of two-wheeler transport continues to be a key advantage for Rapido, as it plays an essential role in urban mobility. However, the company will need to focus on incentives and partnerships to support both its service providers and customers.
Financial Highlights:
Operating Revenue: Rs 648 crore (46.3% increase from FY23)
Gross Platform Income: Rs 505 crore (including Rs 144 crore in customer discounts)
Revenue from Delivery & Subscription Services: Rs 265 crore and Rs 19 crore respectively
Total Revenue: Rs 695 crore
Loss Reduction: Losses decreased by 45%, down to Rs 371 crore from Rs 675 crore
Bank Balance (excluding cash equivalents): Rs 16.39 crore (88.1% decrease)
Rapido’s strong performance highlights its growing role in the ride-hailing and mobility sector, but it will need to continue focusing on cost management and profitability to sustain its growth trajectory.