Urban Company — India’s largest tech-enabled home services platform — has now become a case study for startup founders and investors in the unlisted and listed market. The company, which started its journey as UrbanClap in 2014, has not only revolutionized the home services sector in India but is now rewriting the rules of how startups should approach profitability and IPO readiness.
Recently, the company received approval from its shareholders to go public but surprised the market by reducing its IPO size from the earlier planned ₹3,000 crore to just ₹528 crore.
This decision highlights a new trend in India's startup ecosystem — the era of valuation-driven growth is slowing down, and profitability-driven growth is taking center stage.
Urban Company was founded in 2014 by three IIT and IIM graduates:
Abhiraj Singh Bhal
Varun Khaitan
Raghav Chandra
Urban Company operates as a tech-enabled marketplace for home services like:
Beauty & Salon at Home
Cleaning & Repairs
Electrician, Plumbing, AC Servicing
Appliance Repair
Fitness & Wellness
Commission-based — Charges service professionals a percentage of every order fulfilled.
Subscription Model — For premium service partners (Urban Company Partner Program) with benefits like training, financing, product supply, insurance, and platform support.
Direct Product Sales — Recently ventured into selling D2C beauty and wellness products.
Urban Company has raised over $400 million across multiple funding rounds. Some of its prominent investors include:
Tiger Global
Steadview Capital
Vy Capital
Bessemer Venture Partners
Accel Partners
Urban Company was valued at ~$2.8 Billion in its last funding round in 2021.
| Factor | Impact |
|---|---|
| Global Market Volatility | Uncertainty in US & Global Markets impacting startup IPOs |
| Investor Sentiment | Low Appetite for High Cash Burn Startups |
| Profitability Push | Investors preferring companies with clear profitability visibility |
| Selective Capital Raise | Company focusing on need-based capital instead of raising large sums for aggressive expansion |
| Particulars | Details |
|---|---|
| FY24 Revenue | ₹827 Crore (YoY Growth of 30%) |
| FY24 Losses | Reduced by 70% to ₹93 Crore |
| Q1 FY25 | Achieved Pre-Tax Profitability |
This shows a clear shift in business focus from aggressive expansion to sustainable growth.
Urban Company is moving towards launching beauty, wellness, and personal care products directly to consumers, leveraging its large customer base.
15-Minute Service Booking Facility for Customers
AI-based allocation of service partners
Skill development and financing for service partners
Company has worked extensively in reducing partner acquisition cost and improving margins.
Kotak Mahindra Capital
Goldman Sachs
Morgan Stanley
The IPO size cut is a strong message — The market is no longer willing to pay 10x or 20x revenue multiples for loss-making startups.
Companies which are close to profitability or have clear path towards it will attract higher investor interest.
Capital raised through IPOs will now be used for selective expansion and operational excellence — not for reckless cash burn.
Urban Company is a textbook example for India's startup ecosystem:
"Build a business for customers and profits — Valuation will follow."
As a leading platform in the unlisted space, we at UnlistedZone believe this is a defining moment for startup founders, VCs, and investors.
Even if Urban Company shares are not traded with us, such developments provide key strategic insights for our investor community.
