After food delivery, Rapido plans new subsidiary for fintech

Ride-hailing startup Rapido is setting up a separate subsidiary to enter the fintech space, diversifying further beyond its core mobility business, two people aware of the matter told YourStory.

The company has begun internal groundwork for the new unit, which is expected to operate independently of its existing business lines. While the finer details remain under wraps, Rapido is exploring offerings in lending and adjacent financial services, the two sources said. “They are looking at a fintech subsidiary, but nothing has been finalised yet,” said one of the sources.

This would mark Rapido’s second major diversification, coming on the heels of its much-anticipated entry into the saturated food delivery market. Already, the WestBridge Capital-backed company has begun hiring and initiating partnerships with restaurants for its new zero-commission food delivery marketplace.

Over the past year, Bengaluru-based Rapido has emerged as the largest ride-hailing platform by volume, overtaking incumbents Ola and Uber by aggressively pushing into the three-wheelers and cab space post the pandemic. Its zero-commission model helped it dominate lower-ticket segments and attract both price-sensitive users and drivers.

“Now that ride-hailing has reached a certain steady state, the founders are putting more focus on newer initiatives like food delivery and fintech,” said the second person aware of the plan.

Flush with $230 million in funding raised last year from Prosus and WestBridge, Rapido has the warchest to expand into newer businesses. Internal teams have previously explored insurance, retirement investments, peer-to-peer lending, and vehicle upgrade programs for riders on Rapido’s platform, a former executive said.

The company has also been piloting three-wheeler EV leasing, which could be folded into the fintech arm. While one of the two sources aware of the matter suggested the business may remain mobility-adjacent, the former Rapido executive said the company would likely target its own riders first before targeting gig workers across platforms.

The move comes amid fresh regulatory hurdles that could cripple the firm’s thriving bike-taxi service. Last week, the Karnataka High Court ordered the suspension of bike-taxi services in the state. Karnataka isn’t just Bengaluru’s home state, it is its largest market as well. The firm has faced similar legal setbacks in Maharashtra and Delhi.

“Rapido needs diversification. The recent Karnataka HC order shows how vulnerable the core business can be,” said one of the people quoted above. “Fintech and food delivery are bets to build resilience.”

On Monday, The CapTable reported how Rapido is betting that it can use the lessons it learned from ride-hailing to crack India’s food delivery market.