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Urban Company Announces First Quarter Profit, Targets IPO in 2025

• ByStartupStory     |    June 28, 2024

Urban Company, the Gurugram-based home services platform, has achieved profitability for the first quarter of FY25, registering a revenue run rate of nearly Rs 282.5 crore for the April to June 2024 period before taxes. This marks a 38% increase in revenue compared to the same period in FY24, with a profit before taxes margin of 4%. The company, backed by Accel and Steadview Capital, is yet to file its annual earnings with the Ministry of Corporate Affairs.

Co-founder and CEO Abhiraj Singh Bhal revealed, “Our attrition rates for service partners have come down from double digits during the early days of Urban Company to low single digits at present. For the beauty category of services, the attrition rates are as low as 1% to 1.5%.”

Urban Company, founded in 2014 by Bhal, Raghav Chandra, and Varun Khaitan, offers on-demand services across various categories including home repair, renovation, and beauty and salon services. The platform has seen its average monthly orders grow to 22 lakh, spanning nearly 26 categories.

In FY23, the company reported Rs 636.5 crore in revenue from operations, with a net loss of Rs 312.48 crore on a consolidated basis. Despite this, the company is optimistic about its financial future and is targeting an initial public offering (IPO) in 2025. Bhal noted that while the UAE market is the most mature of Urban Company’s international operations, it is on its way to being cash-flow profitable.

The company’s service partners, who work on a gig-worker model, earn an average of Rs 24,845 per month, based on data from the second half of 2023. Urban Company currently has 57,000 monthly active partners, defined as service partners who have taken up at least one job in the past 30 days.

Bhal emphasized the company’s efforts to improve the working conditions for service partners, stating, “The service partners are re-trained three times as the process of onboarding is rigorous. We carry out three re-trainings and then block the service partner if the ratings do not improve. The involuntary attrition makes up for nearly half of our overall attrition rates.”

He also addressed the new system for accepting bookings, designed to enhance service partner efficiency, “We introduced a new system of accepting bookings on behalf of the service providers as per the working hours specified, with three passes to accommodate for emergency cancellations. More than three rejections by the service partner led to the platform blocking their number.”

As part of its FY24 ESG Report, Urban Company disclosed that it disbursed nearly Rs 6.29 crore in insurance claims, benefiting over 1,800 service partners through its insurance program. Additionally, the platform disbursed Rs 37.2 crore across personal loans, service kit loans, and others through its NBFC partners.

Bhal concluded by highlighting the company’s commitment to service quality, “While the company was working towards simplifying the system of accepting orders for the service partners, it was also focusing on re-training those with ratings of 4.5-4.6 out of 5 to improve Net Promoter Score, a measure of how likely the customers are to recommend the business.”

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