On-demand economy in India had a rollercoaster ride last year. While investments (at seed stage) were raining for on-demand startups for the first half of the year, the second half proved to be a litmus test for such startups across various verticals. Consequently, a slew of angel-funded on-demand food and grocery startups failed to raise follow-on capital, and ceased their operations.
On the lines of product-based (like Grofers and PepperTap) on-demand marketplaces, service-focussed on-demand platforms are witnessing correction and consolidation. However, UrbanClap and HouseJoy have managed to demonstrate decent growth and have also won investor confidence for some much-needed momentum.
Launched in November 2014, UrbanClap has grown from three co-founders to an over 300-strong team. Since its launch UrbanClap has had a horizontal approach towards home and personal service needs.
“Survival of a vertical-focussed service platform is very challenging if the size of opportunity is not mammoth,” says Raghav Chandra (25), Co-founder, UrbanClap.
Varun Khaitan and Abhiraj Bhal are the other co-founders of Urbanclap. People generally need a plumber or carpenter only twice a year and it becomes difficult for a vertical-focussed startup to retain those customers in such non-impulsive categories.
Currently, home servicing (like carpet cleaning), fitness and personal care (beauticians) and events are the top three categories for the Gurgaon-based venture. “India is going through a fitness revolution and we have recorded a spate in demand for fitness and yoga trainers,” adds Raghav. The company snaps up about five to 10 percent margin in high ticket size transactions (home servicing) and 12to 18 percent in low ticket services, including plumbing and carpentry.
So far, UrbanClap gobbled up $37 million in funding across two rounds. In November last year, it had raised a $25 million Series-B round led by Bessemer Venture Partners. The venture is also backed by Ratan Tata and Snapdeal founders. However, instead of deep pocket, the company claims to have a frugal approach from day one.
Raghav speaks about funding and more in this video interaction with YourStory.
“Most of the funds are being diverted towards marketing, building processes and having a rock-solid teamin place. We make consistent efforts to optimise maximum ROI out of our marketing campaigns. UrbanClap hires very cautiously and believes in hiring for tomorrowand not today. We primarily evaluate ownership and leadership quotients with every hire,” says Raghav.
UrbanClap's rival HouseJoy recently acquired on-demand laundry startup MyWash.Hhowever,UrbanClap, backed by SAIF Partners, isn't looking to acquire any vertical-focussed startups, after its acquisition of after-sales service platform HandyHome last month, in an equity swap deal.
“We are already present across 90 categories and consolidate our position across categories. Acquisition doesn't make sense for UrbanClap at the moment,” adds Raghav.
With $25 million in its armour, UrbanClap has no plans to raise any institutional capital this year.
Camera person: Manoj Upadhaya
Video Editor: Anand
Production Assistant: Vincent Arthur