Salon & Services Platform Urban Company Eyes Rs 3,000-Cr IPO, Likely To File DRHP By March-End; Report

Urban Company, India's largest home services startup, is gearing up for its initial public offering (IPO) with plans to file the draft red herring prospectus (DRHP) by March 2024. The public issue is expected to raise approximately Rs 3,000 crore, as reported by Livemint. This move marks a milestone for the Gurugram-based unicorn.

IPO Details
The IPO will involve the issuance of both new and existing shares, enabling the company to raise fresh capital while also providing an exit route for some early investors. Urban Company has enlisted Kotak Mahindra Capital, Goldman Sachs, and Morgan Stanley as lead managers for the public issue.

The startup was last valued at $2.1 billion in June 2021 after raising $255 million in a Series F funding round led by Prosus, Dragoneer, and Wellington Management. Other prominent investors include Vy Capital, Tiger Global, and Steadview Capital.

Market Position & Growth
Founded in 2014 by Raghav Chandra, Abhiraj Singh Bhal, and Varun Khaitan, Urban Company is a technology-driven marketplace that connects gig workers with customers seeking home services. Its portfolio spans beauty and spa treatments, cleaning, plumbing, and appliance repair, among other services. Recently, the company diversified into branded home appliances by launching a range of water purifiers.

Currently, Urban Company operates in over 50 Indian cities and international markets such as the UAE, Singapore, and Saudi Arabia. With a robust network of 57,000 service partners, the platform delivered 23 million services in FY24, clocking a 2.2 million monthly orders with an average order value of Rs 1,290.

IPO Readiness
Urban Company initially considered an IPO in 2021 but delayed its plans due to market conditions. In preparation for its public listing, the company boosted its board by appointing four independent directors, including Ashish Gupta, Ireena Vittal, Deepinder Goyal, and Shyamal Mukherjee.

Financial Performance
Urban Company has demonstrated remarkable financial growth and improved profitability over the past few years. Its consolidated revenue rose 30% year-on-year (YoY) in FY24 to Rs 827 crore, while losses before tax narrowed from Rs 312 crore in FY23 to Rs 93 crore in FY24.

The momentum continued into FY25, with the company reporting Rs 281 crore in revenue for the first quarter, marking a 37.3% YoY growth, and achieving a profit before tax of Rs 12 crore.

Dharana Capital's Investment
In 2023, India-focused investment firm Dharana Capital acquired shares worth Rs 400 crore ($50 million) from Urban Company's employees and other shareholders. This secondary transaction provided an exit to early backers, including Titan Capital, founded by Kunal Bahl and Rohit Bansal. Titan Capital reportedly earned a 200x return on its nine-year-old seed investment of Rs 57 lakh.

Urban Company's foray into international markets and its diversified service offerings position it as a leader in the home services sector. The company's ability to scale while maintaining service quality has been a key driver of its success. By leveraging its gig economy model, Urban Company provides earning opportunities for its service partners.