Urban Company FY20 operating revenue rises two-folds, but breakeven not in sight
Urban Company, formerly known as UrbanClap, on Tuesday reported a two-fold jump in its full year operating revenue to Rs 242 crore, led by strength in its beauty business.
Operating revenue rose to Rs 242 crore in the full year ended March 31, from Rs 116 crore a year ago, as per the I-GAAP accounting standard.
The company said that its beauty and wellness business - which accounted for nearly 55 percent of total revenue in the year - had been under pressure the last few months of the financial year due to the lockdown. Those services are still not operational, but the startup's home repair and maintenance services have been allowed to resume.
The net booking value of transactions through the company's platform grew 138 percent to Rs 918 crore in the year. The company largely earns money from commission fees on every transaction done on its online platform.
Speaking about profitability with YourStory, Abhiraj Singh Bhal, Co-Founder of Urban Company said that breakeven is still some distance away for the company, and that the upcoming financial year is going to be beyond just the financials of the company.
"If COVID-19 would not have happened, we would have targeted it in FY21. But, at this time, not anytime soon," he added.
The startup expects the coronavirus-led lifestyle changes in people to positively impact its business in FY 2021. Its core businesses - beauty and home repairs and maintenance - could see a positive impact in the medium term.
"Beauty industry will undergo very structural tectonic change towards 'at-home'. People will now prefer to get beauty services in the controlled environment of their home, versus to step out and go to a salon," said Abhiraj.
The company recently rolled out a waitlist program for customers who wanted beauty services once operations were resumed. Till date, more than 1.5 lakh customers have joined the queue, Urban Company said.
It urged the government to consider lifting the ban on its at-home beauty services, saying the resumption would help restore its beauty partners' and technicians' livelihoods.
"Over 70 lakh people earn their livelihood through the beauty and wellness industry, many of whom are single bread-winners. Services at home are delivered in a 1-to-1 format and minimize congregation. This would be similar to the restaurant industry which has been allowed to deliver food at home while dine in operations remain suspended," he added.
For its home repair and maintenance business, Abhiraj said the 'safety' component of operating during the lockdown, which includes temperature checks and verifications, was something that was helping the company compete with the gray market, on price versus quality.
"Getting a person from Urban Company gives you that quality assurance. So, once the peak of the pandemic is over, in September or so, I expect a positive shift in both beauty as well as home maintenance."
For the financial year 2021, Urban Company said that protecting the health and safety of its customers and service partners is its number one priority.
Founded in November 2014, Urban Company is a home services company offering services such as beauty and spa at home, cleaning, plumbing, carpentry, appliance repair, painting, etc. through its mobile app and website. It operates in 22 cities across India, UAE, Australia and Singapore. The company has nearly 30,000 service partners, with over 10,000 beauticians and barbers. It helps them with training, credit, product procurement, insurance, technology etc.
In FY20, Urban Company moved from I-GAAP to IND-AS accounting method.
Edited by Aparajita Saxena