On-demand, home-service hyperlocal marketplace seems to be a favourite among both investors and entrepreneurs. Despite more than a dozen known on-demand service providers being available in Gurgaon itself, the number of new startups in the segment continues. New entrants (entrepreneurs) reason that the current on-demand service providers have not been able to meet the customers’ satisfaction and that there are various issues that need to be addressed.
When Anubhav Srivastava suffered an unpleasant experience with the service of a reputed on-demand hyperlocal service player, he observed the existing issues and challenges in the industry. Undeterred by the number of existing players, he decided to launch his own on-demand home-service platform.
In Feb 2015, Anubhav and Vivek Singh Bagri cofounded Gurgaon-based Facility Kart. It is a technology-driven mobile app that provides on-demand, home-needs services, acting as a hyperlocal, micro-managed marketplace. However, the platform became operational from March.
Co-founder and COO Anubhav says, “We are dealing with the inherent problem of the segment: skillset. Consumers require high quality service, which is yet to be addressed by even big players in the segment. The objective is to organise the entire segment, including services and payment system”.
He explains that others are concentrating on customer ecosystem, but he is, instead, focusing on the servicing ecosystem as much as on the former.
Working with over 1,000 vendors in Gurgaon, the platform offers services in over 13 categories and sub-categories including plumbing, painting, CCTV security installation, mobile or tablet repair, laundry, gardening, beauty and household packaging and moving services.
With vendors, the platform works on a commission basis. Between March and July, the traction on the platform has increased from three requests a day to over 50 requests. The average transaction size is Rs 450 per request.
The venture is looking to raise angel round funding and is in talks with investors. It expects to raise funding by end of September this year to make its entry into 10 cities.
According to Anubhav, honouring each customer, working with skillful vendors and customer awareness are some of the main challenges in the segment. “Delivery of services at the promised time to consumers is a daunting task. The industry is dependent on vendors and the negligence caused by either will result in service fallout. Besides, finding skillful vendors is another challenge. Lastly, another challenge we face is that a large base of consumer is not aware of such on-demand facilities,” he says.
Existing competition in the space
The on-demand home service segment is filled with ventures catering to hyperlocal consumers. UrbanClap, TimeSaverz, Taskbob, Mr. Right, Zimmber, Zepper, Doormint, Urbanpro, and Localoye are vying with each other to emerge as the biggest challenger for new entrants. Recently, these companies have managed to secure large funds from various investors.
In June this year, Delhi-based UrbanClap raised USD 10 million in funding from its existing investors, SAIF Partners and Accel Partners. In April 2015, Taskbob raised USD 1.2 million worth of seed funding from Orios Venture Partners and the Mayfield Fund. In June this year, UrbanClap raised USD 10 million in Series-A funding. In July, Zimmber secured USD 2 million from IDG Ventures, Omdiyar Networks, and others. This month, Mumbai-based Doormint raised USD 3-million funding led by Helion Ventures and Kalaari Capital.
In the past few years, the entire on-demand hyperlocal sector has witnessed a large boom. According to our research and that of data analysis company Venture Intelligence, this till mid-June year, , the hyperlocal sector witnessed 27 deals, with funding amounting to over USD 135 million. Sequoia Capital, SAIF Partners, Nexus Ventures, Accel Partners India, Tiger Global and Nirvana Ventures — to name a few — are some of the investors in the segment.
Talking about the existing competition, Anubhav says that the market size is as big as USD five billion and there’s an opportunity for everyone in the segment. The only competition he sees in the space is capturing the marketing space in the hyperlocal areas. “If the marketing issues are addressed, we will be able to make a successful brand name in the segment,” he adds.