Urban Company targets IPO in 2025: CEO Abhiraj Singh Bhal
On-demand services platform Urban Company said it recorded a profitable first quarter for FY25. Co-founder and CEO Abhiraj Singh Bhal also said the company was targeting a public listing in the coming year.
Gurugram-based home services platform said it has turned profitable for the first quarter of FY25, clocking a revenue run rate of nearly Rs 282.5 crore for the April to June 2024 period before taxes.
Co-founder and CEO Abhiraj Singh Bhal said that the company registered a 38% increase in revenue for the quarter compared with the corresponding period in FY24 with a profit before taxes margin of 4%.
Accel- and Steadview Capital-backed Urban Company is yet to file its annual earnings with the Ministry of Corporate Affairs. For FY23, Urban Company reported Rs 636.5 crore in revenue from operations, with Rs 312.48 crore incurred in net loss on a consolidated basis.
The platform, which offers on-demand services across home repair and renovation and beauty and salon categories, has seen its average monthly orders grow to 22 lakh. Its services span nearly 26 categories. Founded in 2014 by Bhal, Raghav Chandra and Varun Khaitan, the company had last raised $190 million in a Series F round of funding in 2021.
Urban Company, which has a presence in the UAE, Saudi Arabia and Singapore markets, is targeting an initial public offering (IPO) in 2025, said Bhal, without expanding on timelines. He added that while the UAE market was the most mature of Urban Company’s international operations, it was on its way to being cash-flow profitable.
The company claimed that the average earnings for service partners who work on the gig-worker model on its platform averaged Rs 24,845 per month, based on data from the second half of calendar year 2023. The platform currently has 57,000 monthly active partners, or service partners who have taken up at least one job in 30 days.
“Our attrition rates for service partners has 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%,” Bhal said while addressing the media at the launch of the company’s FY24 ESG Report.
He added that 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.
“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 noted. He clarified that while the company has seen multiple protests on the change in rules, it was led by service partners with blocked IDs.
The CEO said that the company had 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 ESG report, Urban Company said that it disbursed nearly Rs 6.29 crore in insurance claims in FY24, benefitting over 1,800 service partners, as part of its insurance programme. The platform also disbursed Rs 37.2 crore across personal loans, service kit loans, and others through its NBFC partners.
(The copy was changed to reflect the updated statement from the company.)
Edited by Kanishk Singh