Chinese Giants Xiaomi and Shunwei Capital May Invest $75 Mn in Bike Start-up Rapido: report
The fundraise will reportedly push the valuation of the company to $300-$350 million
Chinese giants Xiaomi and Shunwei Capital are in talks to invest $75 million in bike rental start-up Rapido, according to a report by The Economic Times. Post the fundraise, according to the report, the valuation of the Bengaluru-based start-up will reach $300-$350 million.
When contacted by Entrepreneur India, Xiaomi India declined to comment on the same.
ET also quoted a source who said that Rapido is growing really fast and while it is not profitable, it has still been able to maintain margins well.
Rapido was founded by Aravind Sanka, Pavan Guntupalli, and Rishikesh SR in 2015.
Scaling Growth Amid Conflict
In a market that is predominantly dominated by Olas and Ubers, Rapido has managed to make a mark and at the same time, create space for itself. The start-up has been scaling in the last few months despite competition and presence of the two giants majorly operating in this space. Rapido also raised $55 million in Series C round of funding led by WestBridge Capital in August this year.
The cab aggregation space has been facing hurdles of late. In June, the Karnataka government asked Ola and Uber to stop the pool services immediately in Bengaluru. Profitability remains a core concern for start-ups in this space. Uber received a lukewarm response at the US stock market and is trading below the issue price even today. Ola, on the other hand, has been preparing itself and plans to go for public listing in the next 18-24 months.
Xiaomi’s Investments in India
Xiaomi has been betting big when it comes to Indian start-ups. The smartphone maker has become quite a rage in India. From phones to television, MI products have found takers in India. According to another report by The Economic Times, Xiaomi Technology India’s sales in 2017-18 grew by 175% to INR 23,060 crore, while its net profit too went up 79% to INR 293 crore.
Last year, Manu Kumar Jain, the managing director and vice-president of Xiaomi India, also announced that it will invest INR 6,000-7,000 crore in around 100 Indian start-ups in the next five years to strengthen its software and hardware ecosystem.