Venture capital firm Dharana Capital on Wednesday announced Rs 400 crore (around $50 million) investment in home services platform Urban Company through a secondary transaction. The investor said it bought shares from employees and other shareholders for the investment, making the transaction the largest ESOP liquidity in Urban Company’s history.
Following the deal, Dharana Capital’s Founder and Managing Partner Vamsi Duvvuri will also join the Urban Company’s board as a non-executive director.
“Urban Company, with its full-stack approach and focus on partner enablement, has built a strong, capital efficient and durable business in a challenging local services market,” said Duvvuri.
Dharana Capital also counts Zopper, Lentra, NoBroker and Itilite among its portfolio companies and is backed by US university endowments and other non-profit institutions, according to the fund.
In May this year, Urban Company had announced its fifth ESOP sale programme of Rs 203 crore with its existing investors including Dharana Capital, Vy Capital and Prosus buying shares from existing and former employees.
Meanwhile, the company had reported its profitable pre-tax April-June quarter in the current fiscal. Its co-founder Abhiraj Bahl in a press conference last month had noted a 4 per cent profit before tax margin and Rs 282 crore revenue for the June quarter.
Urban Company had reported 45 per cent growth in consolidated operational revenue for FY23 to Rs 637 crore from Rs 438 crore in FY22. Its losses dropped from Rs 514 crore in FY22 to Rs 308 crore in FY23 while the India business had achieved break even on an adjusted EBITDA basis during Q1 FY24 with negative working capital, the company had said.
According to Bahl, Urban Company is looking to go for IPO in 2025 for which it will soon announce a new independent director on its board.
The company had earlier raised its Series F funding of $255 million in June 2021 led by Prosus Ventures, Dragoneer and Wellington Management, with participation from Vy Capital, Tiger Global and Steadview.