Urban Company Achieves Profit in April-June Quarter, Sets Sights on IPO in 2025

Record Revenue and Profitability Highlight Growth for Urban Company

Gurugram-based home services platform Urban Company has reported a significant achievement in its financial performance for the April-June period of this year. With a revenue of Rs 282-283 crore, the company recorded a profit before tax (PBT) for the quarter, marking a key milestone in its growth trajectory.

Impressive Revenue Growth and Profit Margins

Urban Company’s net revenue for the April-June quarter is 38% higher on a year-on-year basis, reflecting strong demand and operational efficiency. The company’s PBT margin stands at 4% for the period, as announced by co-founder and chief executive Abhiraj Singh Bhal during a press conference on Thursday. Although the company has not yet filed its financial statements for the fiscal year ended March 2024, Bhal indicated that the loss had significantly reduced in FY24, with expectations to become profitable in FY25.

Strong Performance in FY23 and Path to Profitability

In the previous fiscal year (FY23), Urban Company reported a 45% year-on-year increase in operating revenue, reaching Rs 637 crore. The loss before taxes narrowed to Rs 308 crore, compared to Rs 514 crore in FY22. This improvement is a testament to the company’s strategic focus on efficiency and market expansion.

High Order Volume and Average Order Value

Urban Company has been averaging 2.2 million monthly orders with an average order value of Rs 1,290, highlighting its strong market presence and customer trust. The platform connects customers with gig workers for a variety of home services, primarily functioning within two categories: beauty and wellness, and home repairs and maintenance.

Diverse Service Offerings

Urban Company’s beauty and wellness category includes salon and spa services along with laser hair reduction. The home repairs and maintenance category covers tasks such as plumbing, electrical work, carpentry, cleaning, pest control, appliance repair, and painting. This diverse range of services has helped Urban Company cater to a wide customer base, driving its growth.

Strategic Market Focus

Bhal highlighted that while the India business had previously achieved profitability, investments in overseas markets like the UAE, Kingdom of Saudi Arabia, and Singapore had kept the overall company in the red. However, the India business, accounting for about 90% of revenue, is now generating enough cash flow to support these international markets and new initiatives in India.

Expansion Plans and IPO Readiness

Urban Company is on track for an initial public offering (IPO) in 2025. The company will soon announce a new independent director on its board, further solidifying its governance structure in preparation for the IPO. The company had logged its maiden profit before tax in April, underscoring its potential for sustained profitability.

Additional Ventures and Partner Earnings

In addition to its core services, Urban Company launched its own water purifiers under the Native brand last year. The firm has sold 40,000 units, though this category currently accounts for a small part of overall revenues. The earnings of its service partners have also seen a notable increase, with a 13-18% rise in the October-December 2023 period compared to the same quarter in 2021. Currently, the company has around 57,000 active partners earning an average of Rs 24,845 per month.

Urban Company’s strong financial performance and strategic initiatives position it well for future growth. With a focus on profitability and market expansion, the company is gearing up for a successful IPO in 2025, aiming to solidify its leadership in the home services sector.