Urban Company valuation at $2.1 bn post $255-m fundraise

By: |
June 03, 2021 4:30 AM

The company, which offers a range of regular and specialised at home services is also considering broadening its global footprint and some of the locations it is looking at are Indonesia, Malaysia, Hong Kong and Taiwan.

The current round of funding includes a primary capital infusion of $188 million and a secondary sale of nearly $67 million by select angels and early investors.

Home services provider, Urban Company, which has raised $255 million in funding from a clutch of investors led by Prosus Ventures, Dragoneer and Wellington Management with participation from Vy Capital, Tiger Global and Steadview, on Wednesday said it will now expand its services to additional 70 cities, thus covering a total of 100 cities in the country. With the latest round of funding, the company has been valued at $2.1 billion. The current round of funding includes a primary capital infusion of $188 million and a secondary sale of nearly $67 million by select angels and early investors.

“Last year, we went from 10 to 18 cities and this year we have already gone from 18 to 30 cities. There are aggressive plans to expand further from 30 to 50 cities in the near term itself and soon enough we want to be present in the top 100 cities,” co-founder Varun Khaitan told FE in an interview. Khaitan pointed out that the population and income potential of a city are the two key metrics it takes into account before launching its services in a particular area.

The company, which offers a range of regular and specialised at home services is also considering broadening its global footprint and some of the locations it is looking at are Indonesia, Malaysia, Hong Kong and Taiwan.

The growth of the business has been rapid as the Covid-19 virus pushed more consumers to opt for at home services. The men’s hair cut segment, for instance, grew by as much as seven times between February-October 2020 while the home painting category grew by three to four times during the period, claims Khaitan. The co-founder said that at the end of March this year, the company was nearly making double the sales compared to the pre-pandemic period.

To leverage this shift in consumer behaviour, Urban Company is planning to introduce a host of new services on the platform. If things work out, users may also be able to hire trained chefs via it in the near future. The firm is already running a trial of the cooking service in Bengaluru. Besides, plans are being firmed up to add to the women’s beauty services portfolio and appliance servicing segment. “On the home remodelling front, we want to add home interiors soon,” Khaitan said. According to him, the change in consumer behaviour may not be a temporary phenomenon. Citing the demand for at home beauty services, Khaitan said, “We did see a preference for at home beauty service over salon last year and this year, we expect the preference to play out more strongly. This wave of Covid has affected all user and income groups. So, the fear is real.”

Khaitan said that he expects the India business to turn profitable in the near-term. “At a full P&L level, we are yet to break even because we are making some very conscious investments into long-term growth. In the near future, as those investments lead to growth, there will be operating leverage and hence the revenue growth will start outpacing the growth in costs,” he said. The firm is also planning to launch an IPO (initial public offering) in the next 18-24 months.

The company’s losses on a consolidated basis shot up to about Rs 155.17 crore in FY20 from Rs 78.48 crore in FY19. On a standalone basis, losses stood at Rs 137.86 crore in FY20 compared to losses of Rs 73.6 crore in FY19.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1ZEEL management stands behind its two independent directors who had resigned
2MSME, other retailers expect full recovery in retail sales by October to pre-pandemic levels
3Airtel secures TDSAT stay on DoT’s Rs 1,376 cr demand