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Why I wrote the first cheque for Rapido: AdvantEdge's Kunal Khattar

The founder of Advantedge writes Rapido addressed a critical gap with a sustainable, cost-effective, capital-efficient, and highly scalable solution in a hyper-competitive space

By Kunal Khattar

Published: Jul 17, 2025 10:47:11 AM IST

Updated: Jul 17, 2025 10:55:18 AM IST

India has an astronomical number of two-wheelers. Therenare about over 250 million registered two-wheelers on our roads. Image: Shutterstock

When we looked at the Indian shared mobility landscape, everyone was focussed on cars—only because they worked in all the other markets, including the US and China. Uber and Ola had raised colossal amounts of capital and were duking it out. But at AdvantEdge, we saw something different, something fundamental to India: An untapped, massive opportunity in creating a new category—bike taxis.

India has an astronomical number of two-wheelers. We’re talking about over 250 million registered two-wheelers on our roads. This isn’t just a statistic; it’s a cultural and economic reality. For the vast majority of Indians, a bike isn’t a luxury; it’s the primary mode of transport. Compare that to the roughly 45 to 50 million cars, and you instantly see the scale of the two-wheeler market is 5x that of cars.

Despite this massive ownership, the utilisation levels of these two-wheelers were historically very low, around 12 percent. People used their bikes for personal commutes, but for significant portions of the day, these assets sat idle. Even when the two-wheeler was being used, 70 percent of the time the rear seat was empty.

This immediately signalled an opportunity for a platform that could monetise this latent capacity. We also saw a glaring need for supplementary income. Unemployment and underemployment are persistent challenges across various demographics in India. An estimated 20 percent of two-wheeler owners (approximately 50 million) were unemployed, students or working part time. Many of them, particularly young men, were looking for flexible ways to earn. Rapido offered just that—a simple way to leverage an existing asset to generate income, without the high barrier to entry of buying a commercial car which Uber and Ola demanded.

What truly resonated with us about Rapido was also their asset-light model. As a mobility-focussed VC (venture capital firm), we firmly believed in backing platforms that didn’t need to own the assets. Rapido’s approach of onboarding existing two-wheeler owners as ‘captains’ was brilliant. It meant they could scale rapidly without the enormous capital expenditure and operational headaches that come with managing a massive fleet of vehicles. This translated to lower operational costs and faster expansion, which is a stark contrast to the heavy investments we saw with cars.

Also read: Ola, Uber, Rapido: How cab aggregators are responding to subscription vs commission model

Then there’s the ‘why’ from the users’ perspective. Why do Indians prefer bikes for certain trips? Firstly, affordability. Less than 1 percent of Indians can afford to ride a four-wheeler. A bike taxi ride is significantly cheaper than a car ride, often by 30 to 60 percent, making it accessible to a much broader demographic. For daily commutes, this cost saving is critical. Secondly, convenience. In our notoriously congested cities, a two-wheeler can weave through traffic in a way a car simply cannot. This means faster travel times, especially for short-to-medium distances, directly addressing one of the biggest pain points in urban mobility. And while some might question safety, Rapido’s focus on helmets, GPS tracking and other features brought a level of organised safety even for women customers, who felt safer on a two-wheeler compared to cars as well as public transport.

We observed a discipline at Rapido that was missing in some of the larger players. While others were diversifying rapidly and burning cash, Rapido remained laser-focussed on their core bike-taxi offering limited to mostly just Bengaluru with a small test market in Gurugram. This focussed execution allowed it to build a robust product and strong market leadership in their specific vertical. It showed us that capital isn’t always the ultimate competitive moat in India; smart, frugal and patient execution can be just as powerful, if not more so. Rapido proved that by focusing on a specific, underserved problem with a highly relevant solution, you can build a formidable business, even when competing with deeply funded behemoths.

Ultimately, we saw Rapido addressing a critical gap in the market with a sustainable, cost-effective, capital efficient and highly scalable solution. We got in early—our seed cheque in 2016 yielded a 50x return. It wasn’t just about the numbers; it was about backing a team that understood the nuances of the Indian market and had the grit to build a valuable business in a hyper-competitive space, by simply leveraging the pervasive two-wheeler.

(The writer is founder, AdvantEdge)

(This story appears in the 25 July, 2025 issue of Forbes India. To visit our Archives, click here.)