Swiggy to divest entire stake in Rapido to Prosus Ventures and Westbridge for about ₹2400 crore

Swiggy said on Tuesday that its board has approved a proposal for the sale of its entire stake in Rapido, comprising 10 equity shares and 1,63,990 Series D preference shares to Dutch investment firm Prosus Ventures for ₹1,968 crore, as well as 35,958 Series D preferential shares to Westbridge for about ₹432 crore.

According to an exchange filing, Swiggy said the sale is a strategic decision to help realise the investments, for the benefit of the company and its shareholders. Swiggy acquired a 15% stake in Rapido in FY23 for ₹950.5 crore, whereas Prosus Ventures holds about a 23.31% stake in Swiggy. However, when Rapido raised ₹250 crore from Prosus Ventures and ₹125 crore from venture capital firm Nexus Ventures in FY2025 as part of an extended Series E funding round, Swiggy’s shareholding in Rapido diluted to approximately 12%.

Swiggy has achieved a return of over 150% on its investment in Rapido. It was earlier reported that Swiggy was offloading its entire 12% stake in Prosus for up to ₹2,500 crore, making a full exit from the three-year investment it made in Rapido.

The development comes at a time when Rapido has forayed into the food delivery business, prompting Swiggy to monetise its stake in Rapido to avoid a potential conflict of interest, something it had publicly stated last month.

“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. Our ~12% minority stake has appreciated significantly since our investment, based on incoming interest, and we are actively re-evaluating our investment due to the above developments,” the company had said in a shareholder letter earlier.

Earlier in July, during the company's first quarter earnings call, Sriharsha Majety , MD and group CEO, Swiggy had cited a potential conflict of interest arising in the future with Rapido expanding into the delivery space and the intention to sell  the stake held in the company.

"When we got into Rapido maybe 2.5 years back, they were a mobility player doing really well. We wanted to partner with them on that journey and even as early as that we have had some conversations around potentially doing a partnership in food delivery also. Unfortunately that did not materialise and they have decided to get in the business themselves. Now, that is just a wedge that has made us take notice of the conflict and therefore, we are planning to go separate ways on this," Majety said on the call.

As part of the transaction with Prosus Ventures, Roger Clark Rabalis and Ashutosh Sharma have been appointed to Swiggy’s board. Prosus, which previously held 3-4% in Rapido, has recently adopted a bullish stance towards the company. The homegrown ride aggregator has not only outpaced rivals Ola and Uber, but its recent forays into areas including food delivery have reportedly catalysed the investor to look at increasing its stake in Bengaluru-based Rapido.

Meanwhile, Swiggy’s losses have widened: while the food delivery business remained profitable—growing 10% sequentially to ₹1,799 crore in the first quarter of the current year—it has been burning cash to expand its quick commerce offering, the Swiggy Instamart. The quick commerce segment posted a loss of ₹896 crore in the same period. 

Swiggy has cash and cash equivalents of ₹5,354 crore as of June 30, and the ₹2,400 crore will be added to the cash that Swiggy holds. It spent much of the ₹319 crore in the quarter on capital expenditure, funding the previous quarter’s dark store expansion, and the remainder was allocated to other dark store additions to boost its quick commerce business.