Swiggy to re-evaluate investment in Rapido over conflict of interest
'Rapido is now the largest mobility player in India by rides, and has been a disruptor in its space. As a shareholder, we are extremely happy with their success and value-creation; but do acknowledge a potential conflict of interest that may arise in the future,' said Swiggy in its letter to shareholders on Thursday.
It added, 'Our 12% minority stake has appreciated significantly since our investment (basis incoming interest) and we are actively re-evaluating our investment due to the above developments.'
Rapido entered the food delivery space in June through a pilot called 'Ownly' in Bengaluru, charging restaurants a fixed fee per order. A proposal shared with restaurants shows that Rapido is positioning itself as a zero-commission, value-focused alternative to Swiggy and Zomato.
Swiggy invested in Rapido in 2022. It holds approximately a 12% stake in Rapido which is valued at around Rs 1,020 crore based on Rapido's current valuation of just over Rs 8,500 crore. The ride-hailing company, which competes with Ola and Uber, has raised around $600 million so far.
"Food delivery continues to attract new competition, with new players or models trying to enter this high-frequency, high customer-intent category every year. The key question is what new competition will unlock for the consumer, which we are not already doing at scale. Many of the new offerings we have created (including on affordability) and will continue to roll out, will be towards ensuring that competition does not get a clear opening." Swiggy stated in the letter.
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