Rapido, the Prosus-backed mobility unicorn, has had a remarkable fiscal year, with operating revenue reaching Rs 648 crore for FY24, marking an impressive 46.3% growth. This leap is part of a broader trend, with Rapido’s revenue expanding 4.4 times in just two years, from Rs 145 crore in FY22.
The ride-hailing giant has also made strides in cutting down its losses, reducing them by 45%, thanks to a combination of cost management strategies and increased revenue from both its core ride-hailing services and new business lines.
Growth Across Key Segments
Rapido’s consolidated financials show strong performance across its service segments. The company’s revenue from its platform, covering two-wheelers, three-wheelers, and four-wheelers, made up the bulk of its revenue, growing by 48.4% to Rs 362 crore. While gross platform income, which includes customer discounts, reached Rs 505 crore, the company faced the challenge of managing discounts, which totaled Rs 144 crore.
In addition to its core ride-hailing services, Rapido made significant strides in its delivery and subscription services. Delivery services grew by 39.5%, reaching Rs 265 crore, while subscription services saw an exceptional 171.4% growth, totaling Rs 19 crore. The firm’s total revenue for FY24 reached Rs 695 crore, a solid jump from Rs 497 crore the previous year.
Effective Cost Management
One of the most notable aspects of Rapido’s FY24 performance is its ability to manage costs effectively. Incentives to partners, which have historically been a major cost center for the company, were reduced by 11% to Rs 460 crore. This, alongside cuts in employee costs by 16.9% to Rs 172 crore and a reduction in marketing expenses by 10.8% to Rs 214 crore, helped the company control its overall expenditure.
Despite these savings, Rapido’s total operating expenses for the year stood at Rs 1,066 crore, reflecting the significant investments required to scale its operations and maintain its growth trajectory. The company also reduced its losses by 45%, bringing them down to Rs 371 crore from Rs 675 crore in FY23.
Rapido’s return on capital employed (ROCE) and EBITDA margins were still in negative territory at -90.7% and -52.5%, respectively. In practical terms, the company spent Rs 1.65 for every rupee earned in FY24. However, its ability to reduce losses signals improving operational efficiency, which could set the stage for profitability in the coming years.
A Rocky Financial Picture
While Rapido has made strides in increasing its revenue and reducing its losses, the company’s financials still reflect some areas of concern. The firm’s bank balance, excluding cash equivalents, plummeted by 88.1%, dropping to Rs 16.39 crore. Similarly, cash equivalents saw a drastic decline of 75.3%, falling to Rs 71.71 crore. In contrast, the company’s trade receivables doubled, rising from Rs 16 crore in FY23 to Rs 32.06 crore in FY24.
Despite these financial challenges, Rapido’s market positioning continues to improve. The company, which recently reached unicorn status after raising $200 million in a Series E funding round, has raised more than $500 million to date. This funding has enabled Rapido to expand its footprint and scale its operations in an increasingly competitive ride-hailing market.
Strong Market Position
Rapido has not only grown its financials but also solidified its position in the ride-hailing market. According to internal data, Rapido has surpassed Ola to become the second-largest player in the market, trailing only behind Uber in the bike, auto, and cab segments. The company claims that autorickshaws contribute 40% of its gross merchandise value (GMV), while bikes and cabs each contribute 30%. In terms of ride volume, bike taxis account for over half of the total rides on the platform.
This positioning, combined with Rapido’s expansion into new service lines, could help the company compete more effectively with its larger rivals. As the firm looks ahead, further improvements in its operational efficiency and strategic investments will likely be key to sustaining growth and moving closer to profitability.
Comments