On Tuesday, the Indian food and grocery services platform Swiggy announced the sale of its entire 12% stake, valued at $270 million, in ride-hailing services company Rapido. This decision stems from Rapido’s entry into the food delivery business, which Swiggy perceived as a potential threat, prompting a reevaluation of its strategy.
According to the report, Dutch Firm Prosus NV’s unit will purchase ₹19.68 billion shares, and the remaining shares will be transferred to US-based Westbridge for ₹4.3 billion from Swiggy. Though Prosus already owned approximately. 3-4% in Rapido before this investment.
Swiggy earned around two and a half times on its initial investment of ₹9 billion in Rapido. According to Moneycontrol, last month, Swiggy initiated the process of divesting its stake in the start-up.
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Recently, a JM Financial analysis states that Swiggy may require a fundraising round exceeding $500 million to support its Instamart quick delivery service amid growing competition from Zomato and Blinkit. They reported that the company’s financial condition is unstable in the increasingly capital-intensive market battle. Instamart is losing market share to Blinkit, which has seen a rise of more than 130 per cent.
