In a significant strategic move that marks another shake-up in India’s rapidly evolving mobility ecosystem, TVS Motor Company has sold its entire stake in bike-taxi and mobility startup Rapido for ₹287.93 crore. The Chennai-based two-wheeler giant announced that it has entered into definitive agreements with global investors Accel India VIII (Mauritius) Limited and MIH Investments One BV, an entity of Prosus, for the monetisation of its investment in Roppen Transportation Services Pvt. Ltd., which operates under the Rapido brand.

This sale signifies TVS Motor’s complete exit from the Bengaluru-based startup, which it first backed in 2022 as part of a strategic partnership in the commercial mobility and last-mile delivery space. The divestment, finalized through two separate transactions, also comes amid renewed investor activity following Swiggy’s ₹2,399 crore exit from Rapido in September 2025.

The Deal Breakdown: Who Bought What and for How Much

According to TVS Motor’s stock exchange filing, the sale was structured as follows:

• Accel India VIII (Mauritius) Limited acquired 11,997 Series D Compulsorily Convertible Preference Shares (CCPS) for ₹143.96 crore.

• MIH Investments One BV (Prosus) purchased 10 equity shares along with 11,988 Series D CCPS for ₹143.97 crore.

Together, these transactions amount to ₹287.93 crore, giving both Accel and Prosus an equal share of the divested stake.

This move marks the second major investor exit from Rapido in recent months, underscoring how investor alliances are shifting within India’s growing mobility and delivery ecosystem.

TVS and Rapido: From Strategic Partners to a Full Exit

Back in 2022, TVS Motor had entered into a strategic partnership with Rapido aimed at exploring collaborations in commercial mobility and last-mile delivery. The partnership was seen as part of TVS’s broader effort to integrate itself into the emerging digital mobility ecosystem while leveraging Rapido’s strong urban network.

However, just three years later, the company has opted for a full divestment. In its exchange filing, TVS described the sale as a monetisation of investment, signalling a shift in focus toward its core manufacturing business, electric vehicle (EV) roadmap, and global expansion.

Why TVS Motor Decided to Sell Its Stake

While the company did not cite specific reasons beyond “monetisation,” several factors seem to have influenced the move:

1. Healthy Returns and Portfolio Rebalancing

TVS’s decision allows it to book profits on its 2022 investment while rebalancing its portfolio toward core operations. With nearly ₹288 crore coming in from the sale, the company gains additional liquidity to fuel its EV ambitions, including expanding the TVS iQube electric scooter lineup and investing in R&D.

2. Diverging Strategic Priorities

The initial collaboration with Rapido focused on shared interests in mobility solutions and last-mile logistics. Over time, however, Rapido’s business evolved—expanding into new verticals like auto rides and even food delivery. As TVS sharpened its focus on manufacturing and EV innovation, the strategic overlap between the two companies lessened.

3. Avoiding Conflicts of Interest

Much like Swiggy, which exited Rapido citing “potential conflicts of interest” as both firms expanded into food delivery and hyperlocal logistics, TVS might have also foreseen operational overlaps. As Rapido ventures deeper into multi-segment mobility services, including areas where TVS’s own clients and partners operate, a clean exit helps avoid future friction.

4. De-risking from High-Burn Ventures

Startups like Rapido, while high-growth, often require heavy cash burn to scale operations. TVS’s exit allows it to de-risk its balance sheet while still benefiting from the capital appreciation generated during its investment period.

The Broader Context: A Flurry of Investor Activity Around Rapido

The TVS exit comes close on the heels of Swiggy’s ₹2,399 crore divestment, which saw the food-tech giant offload its ~12% stake in Rapido at a 2.5x return. Swiggy’s exit, too, was driven by potential overlap as Rapido forayed into food delivery—a segment Swiggy dominates.

With both Swiggy and TVS Motor exiting, Prosus has emerged as a key consolidator. Interestingly, Prosus is also the largest shareholder in Swiggy, while Accel is one of Swiggy’s early backers. Their increased participation in Rapido underscores continued investor confidence in the startup’s growth trajectory and the broader urban mobility sector in India.

Reports also suggest that Rapido is in the process of closing a USD 550 million funding round, led by Prosus. The round is expected to include around USD 300 million in fresh capital and a mix of primary and secondary share sales. If finalized, this would be one of the largest fundraises for an Indian venture-backed startup in 2025.

Rapido’s Next Chapter: Food Delivery, Expansion, and Market Leadership

Founded in 2015, Rapido started as a bike-taxi platform and has since evolved into a comprehensive urban mobility provider, offering auto-rickshaw rides, delivery services, and now food delivery.

In August 2025, the company began piloting its standalone food delivery app, “Ownly,” in select Bengaluru neighbourhoods such as Koramangala and HSR Layout. The pilot was well received, and Rapido is now gearing up for a broader rollout by the end of November 2025.

The move into food delivery pits Rapido directly against giants like Swiggy, Zomato, and Ola, marking its most ambitious diversification yet. However, with Prosus and Accel as key backers—and the possibility of additional funding—Rapido is well-positioned to scale its operations, improve technology, and expand across Tier 1 and Tier 2 cities.

Uber vs. Rapido: A Growing Rivalry in India’s Mobility Market

Rapido’s rapid growth hasn’t gone unnoticed. In a recent statement, Uber CEO Dara Khosrowshahi acknowledged that Rapido has become a bigger rival to Uber in India than Ola, highlighting its dominant position in the two- and three-wheeler segment.

This recognition underscores how Rapido has managed to carve out a unique niche by focusing on affordable, short-distance mobility, especially in congested urban areas where two-wheelers offer faster and cheaper travel options.

As India’s urban mobility market continues to expand—driven by rising fuel costs, traffic congestion, and growing consumer preference for convenience—Rapido’s asset-light model gives it an edge over traditional four-wheeler platforms.

What the Exit Means for TVS Motor: Financial and Strategic Implications

For TVS Motor, the ₹288 crore inflow from the sale strengthens its financial position and allows the company to refocus on its core automotive business. Analysts view the move as a financially prudent decision, rather than a strategic retreat.

Key takeaways for TVS Motor shareholders:

• Positive Financial Impact: The ₹288 crore will bolster TVS’s cash reserves, which can be directed toward R&D, EV production capacity, or debt reduction.

• Sharpened Strategic Focus: By exiting non-core investments like Rapido, TVS can concentrate on electric mobility, international expansion, and new-age manufacturing technologies.

• Minimal Operational Impact: Since Rapido was an equity investment, not an operational subsidiary, the exit does not affect TVS’s day-to-day activities or profitability.

In the broader context, this divestment aligns with TVS Motor’s long-term strategy of investing selectively in high-growth ventures while maintaining a disciplined focus on its core competencies in vehicle design, innovation, and production.

Investor Sentiment and Market Reaction

Interestingly, the market reaction to TVS Motor’s announcement was largely neutral, with the company’s stock trading flat. Investors appear to have interpreted the move as a logical portfolio optimization step rather than a signal of distress or strategic confusion.

The exit also aligns with the automaker’s forward-looking approach—leveraging opportunities in high-growth sectors but exiting at the right time to secure healthy returns. This disciplined approach has helped TVS Motor remain one of India’s most financially stable automotive companies, even amid rapid shifts in the mobility landscape.

Looking Ahead: The Road for Rapido, Prosus, and Accel

With Prosus and Accel now holding a more substantial stake, Rapido enters a new phase of growth and consolidation. The startup’s focus areas are likely to include:

• Scaling its food delivery vertical (Ownly) nationwide.

• Strengthening its technology stack for better driver allocation and consumer experience.

• Expanding in Tier-2 and Tier-3 cities, where demand for affordable two-wheeler mobility continues to surge.

• Exploring new monetization models, including subscription-based services or bundled mobility offerings.

For Prosus and Accel, this investment deepens their footprint in India’s fast-growing shared mobility sector, where long-term opportunities abound despite short-term challenges.

Final Thoughts

The ₹288 crore exit of TVS Motor from Rapido represents more than just a financial transaction—it’s a reflection of how India’s mobility landscape is maturing, with investors reshuffling their portfolios to align with evolving market realities.

While TVS Motor strengthens its focus on electric vehicles and global expansion, Rapido, backed by Accel and Prosus, is gearing up to redefine urban transportation with an expanded vision that includes bike-taxis, auto rides, and food delivery.

As competition heats up with global giants like Uber and homegrown rivals like Ola and Zomato, Rapido’s next chapter could well determine the future shape of India’s urban mobility revolution.

With inputs from agencies

Image Source: Multiple agencies

© Copyright 2025. All Rights Reserved. Powered by Vygr Media.