Urban Company aka Urban Clap, the leading home services platform headquartered in Gurugram, is on the brink of a significant milestone with plans to launch an IPO worth INR 3,000 crore. This move, slated for a DRHP filing by March 2025, could very well redefine the landscape of India’s hyperlocal services industry.
Urban Company’s IPO will be a blend of a fresh issue and an Offer-for-Sale (OFS), allowing new capital to flow in while giving some early investors a chance to cash out. The financial structuring is being managed by top investment banks, including Kotak Mahindra Capital, Goldman Sachs, and Morgan Stanley.
Urban Company’s Financials
Urban Company reached a valuation of USD 2.1 billion during its Series F funding round in June 2021, securing USD 255 million in investments. Investors like Prosus, Wellington Management, Dragoneer, Steadfast Capital, Tiger Global, and Vy Capital have played significant roles in shaping the company’s trajectory.
Financially, Urban Company has shown remarkable resilience and growth. The company’s revenue in FY24 jumped by 30% year-over-year to INR 827 crore. More impressively, losses were reduced from INR 312 crore in FY23 to INR 93 crore, highlighting a strategic pivot towards profitability. By Q1 FY25, revenue had climbed to INR 281 crore, up 37.3% YoY, with the company turning a profit before tax of INR 12 crore. If projections hold, FY25 could see revenue soar to INR 1,140 crore.
Urban Company – Overview
Founded by Raghav Chandra, Abhiraj Singh Bhal, and Varun Khaitan in 2014, Urban Company has been about more than just connecting customers with gig workers for services like beauty treatments, massages, plumbing, cleaning, appliance repair, and carpentry. The platform has recently ventured into selling branded home appliances, starting with water purifiers, thus expanding its service-based model into product sales.
Urban Company’s reach extends beyond India, operating in over 50 cities domestically and in international markets like the UAE, Singapore, and Saudi Arabia. With 57,000 service partners and an average of 2.2 million monthly orders at an average value of INR 1,290, the platform’s scale is impressive.
As the Urban Company’s IPO looms, the company has not only focused on business expansion but also on governance. The company has welcomed independent directors like Ashish Gupta, Ireena Vittal, Deepinder Goyal, and Shyamal Mukherjee to enhance oversight and ensure compliance with regulatory standards. A strategic joint venture with Saudi Manpower Solutions Company (SMASCO) in Saudi Arabia further shows the company’s international ambitions.
Looking Ahead
Investor confidence remains high, with Prosus planning to double its stake through a USD 30 million secondary investment, providing liquidity to other investors like Bessemer Venture Partners. Additionally, in 2023, Dharana Capital acquired shares worth INR 400 crore, which helped offer liquidity to employees and early backers.
The Urban Company IPO isn’t just about raising funds; it’s about setting a new standard in the hyperlocal services sector. With its tech platform and gig economy model, Urban Company has crafted an ecosystem where service partners thrive, and customers are content. This IPO could accelerate growth, enhance technological capabilities, and widen market reach, positioning Urban Company to lead in an increasingly competitive space.
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