In a financial tale of growth and challenges, Indian ride-hailing startup Rapido witnessed a notable surge in sales during the financial year 2022-23 (FY23), with its operating revenue tripling to INR 443 Cr. However, this impressive top-line growth was accompanied by a substantial widening of standalone losses, reaching INR 674.5 Cr, a 53.6% increase from the previous fiscal year. The key driver behind this financial narrative was the surge in employee costs, compounded by increased expenses in marketing campaigns and support infrastructure.
Operating Revenue’s Meteoric Rise
Rapido’s operating revenue experienced exponential growth, leaping from INR 144.8 Cr in FY22 to INR 443 Cr in FY23. The ride-hailing platform, founded in 2015, primarily generates revenue through its auto and bike taxi services, supplemented by peer-to-peer delivery services via Rapido Local. The total revenue, including interest and other non-operating income, skyrocketed by 214.9% to INR 497.5 Cr during the reported period.
Expenditure Soars, Led by Marketing and Employee Costs
Despite robust revenue growth, Rapido grappled with a surge in total expenditure, which escalated by 96.3% to INR 1,172.1 Cr in FY23. A significant portion of this spending was dedicated to marketing campaigns, technology infrastructure, and support costs, aimed at fueling expansion and enhancing user experience.
- Employee Costs Take Center Stage:
- Employee Benefit Expenses: The startup’s commitment to workforce development resulted in a 93.3% rise in employee costs, reaching INR 206.8 Cr in FY23.
- Salaries and Wages: A substantial 68% YoY increase saw Rapido spend INR 165.4 Cr on salaries and wages during the reported period.
- ESOP Expenses: Other employee-related expenses, potentially ESOP-related, surged by a staggering 498.2% YoY, highlighting the company’s focus on incentivizing its workforce.
- Advertising and Promotion:
- Ad Expense: Reflecting a 36% increase, Rapido’s advertising and promotional expenses climbed to INR 240.3 Cr in FY23, constituting 20.5% of total expenses.
- Legal Battles Impact:
- Legal Professional Charges: The startup’s ongoing legal battles had financial implications, with legal professional charges rising by 95.4% YoY to INR 10.8 Cr in FY23.
- Miscellaneous Expenses:
- Infrastructure and Support Costs: A significant surge in miscellaneous expenses, covering infrastructure, software, support services, and payment gateway charges, amounted to INR 695.7 Cr in FY23, compared to INR 293.4 Cr in the previous year.
Looking Ahead: Challenges Amid Expansion
Rapido’s fiscal journey, marked by soaring sales and widening losses, underscores the challenges faced by rapidly expanding startups in the competitive ride-hailing landscape. As the company grapples with legal issues and intensifies marketing efforts, its financial health remains a dynamic interplay of growth initiatives and operational challenges.
