Jio Financial Services Reports a 56% Quarter-on-Quarter Profit Decline to INR 294 Cr in Q3 as Revenue Drops to INR 413 Cr

In FY23, Rapido, the ride-hailing startup, experienced a widened standalone loss of INR 674.5 Cr, marking a 53.6% increase from the INR 439 Cr reported in the previous fiscal year.


This financial setback was primarily attributed to a significant surge in employee costs.


Despite the widened loss, Rapido‘s operating revenue witnessed substantial growth, surging over threefold to INR 443 Cr in the year under review, up from INR 144.8 Cr in FY22.


Established in 2015 by Rishikesh SR, Pavan Guntupalli, and Aravind Sanka, Rapido generates most of its revenue through auto and bike taxi services and peer-to-peer delivery services via Rapido Local.


With a fleet comprising 5 million bike taxis and 7 lakh auto-rickshaws, the startup claims a presence in over 100 Indian cities and boasts over 25 million app downloads.


The income categorization includes revenue from delivery services, subscriptions, and marketing, though a segment-wise breakdown still needs to be provided.


In FY23, Rapido’s total revenue, including interest and other non-operating income, surged by 214.9% year-on-year to INR 497.5 Cr.


Despite legal battles in various states due to bans on bike taxi services, Rapido expanded its business during the year under review. 


Notably, it raised $180 Mn in funding during FY23 in a round led by Swiggy, featuring participation from TVS Motors, WestBridge Capital, Nexus Ventures, and Shell Ventures. 


The startup also ventured into cab operations last month, aiming to compete with industry giants Ola and Uber.


Examining Expenditures:


In FY23, Rapido’s total expenditure rose by 96.3% to INR 1,172.1 Cr from INR 597 Cr in the preceding year. The startup attributed this increase to heightened spending on marketing campaigns, technology infrastructure costs, and support costs to fuel growth and enhance app user experience.


Employee costs constituted a significant portion, contributing over 17% of the total expenses. Employee benefit expenses surged by 93.3% to INR 206.8 Cr, with salaries and wages accounting for INR 165.4 Cr, marking a sharp 68% year-on-year increase.


Additionally, other employee-related expenses, likely ESOP expenses, soared over 498.2% YoY, with Rapido having spent INR 5.8 Cr on ESOPs in FY22.


Ad expenses witnessed a 36% increase to INR 240.3 Cr in FY23, contributing 20.5% to the startup’s total expenses.


Amid ongoing legal challenges, Rapido’s total expenses in the legal professional charges category surged by 95.4% YoY to INR 10.8 Cr in FY23.


The startup faced issues in Delhi, where the transport department banned aggregators like Rapido, Uber, and Ola from operating bike taxis, leading Rapido to approach the Delhi High Court.


Miscellaneous expenses, including infrastructure and software charges, support services costs, and payment gateway charges, amounted to INR 695.7 Cr in FY23, compared to INR 293.4 Cr the previous year.