Playing to its strength, conserving cash, sticking to a few cities and not taking on the big players—Ola and Uber—helped the startup gain users, build trust, improve revenue and attract funding
Left to Right: Rishikesh SR, Aravind Sanka and Pavan Guntupalli, the co-founders of Rapido. Photo by Nishant Ratnakar for Forbes India
Bengaluru, 2015
Seventy-five-odd failed investor pitches usually have a tendency to do two things. First, most likely kill the self-belief of any rookie entrepreneur. Second, make one question the ‘first-mover advantage’ thesis, especially all the fancied merits tagged to the over-valued business philosophy of being the first to enter a segment. Rejections didn’t make Aravind Sanka feel dejected. Over six dozen nays from venture capitalists (VC) didn’t kill him, or the fledgling business of bike taxi—Rapido—which he started along with fellow IITians Pavan Guntupalli and Rishikesh SR in October 2015 by pivoting his one-year-old maiden venture theKarrier, an intra-city aggregator for mini trucks.
The truckload of rejections by VCs had one common strand: Big boys of ride sharing—Ola and Uber—had rushed into the bike taxi business just a few months after Rapido’s entry. Suddenly, all the so-called advantages of being the first player vanished. “Any investor not asking about Ola and Uber during the pitches meant that they were not serious about investing,” recalls Sanka, alluding to one of the ways in which VCs expressed their rejection. The second, and the most obvious way, of refusal was to question the foolhardy of the biker gang of Sanka by trying to take on the biggies. “How will you survive against the might of Ola and Uber?” was the common question. Sanka did have an answer, but the VCs didn’t have the appetite to listen.
A few months later, in April 2016, Sanka managed to find a pillion rider in Pawan Munjal. The chairman, managing director and CEO of Hero MotoCorp, India’s biggest two-wheeler maker, invested in his personal capacity. Along with the money, came the golden nugget of business wisdom: Build for Bharat. “Tier II and III should be beautiful markets for you guys,” he told Sanka and his team. But Munjal too had his share of questions: “What are you doing for women passengers? How can you change the culture of women sitting on a two-wheeler?”