UrbanClap raises $50 million from Steadview Capital and Vy Capital
On-demand home services marketplace UrbanClap has raised $50 million in primary capital in its latest round of funding. The investment has been led by Hong Kong-based hedge fund Steadview Capital along with existing investor Vy Capital, according to three sources familiar with the developments. Steadview Capital has invested about $30 million in the round with the remaining coming from Vy Capital, in what is the largest fund raise by a company in India’s on-demand services space yet. The round will see UrbanClap`s valuation more than double to $480 million post the investment, said one of the persons cited above. UrbanClap which also counts Accel, SAIF Partners, Bessemer Venture Partners and Ratan Tata amongst its investors, was last valued at $200 million when it raised capital in 2017. UrbanClap confirmed the investment but declined to comment on valuation specifics. The latest investment round will also see the firm raise an additional $4 million in a secondary sale of shares and ESOPs for early angel investors and employees. This is the second instance of a fund raise exercise at UrbanClap, enabling employees an opportunity to liquidate their ESOPs after the first instance in 2017. “The core of our business which is beauty, cleaning and repairs is growing faster than before and we will invest deeper in these areas especially with regard to building supply chain and training of professionals. We know this model works, we now want to be more aggressive in our expansion strategy there,” Co-founder and CEO Abhiraj Bhal told media. UrbanClap will use the capital to accelerate the on-boarding of both customer and service partners, build stronger teams across product and technology, build training capabilities as also enhance its supply chain of consumables. The firm is looking to double down on expansion in tier 2 cities and has begun operations in Chandigarh just this week. UrbanClap saw its topline surge a whopping 327% in FY18 with operational revenues coming in at Rs 46.6 crore even as losses fell 14% to come in at Rs 57 crore. UrbanClap's operating revenues comprise commission on services delivered and revenues from sale of products with commissions forming almost 85% of the pie. Commissions on services delivered typically form about 10-20% of the ticket size across categories with some categories, such as beauty, on the higher end of the commission spectrum. UrbanClap currently has about 15,000 service professionals across its offerings and is looking to take that number to 1 million over the long term. To that end, the firm has been heavily investing across training of its professionals and has 4 training centres and over 100 trainers on its platform. The firm has been steadily reducing costs and claims to have brought its net burn excluding debt down to Rs 15 crore for the first half of 2018. As of April 2018, UrbanClap clocked 4,50,000 orders monthly with an average order value of Rs 1200-1500. The gross transaction value of services sold in April alone stood at about Rs 50 crore, Bhal had told media earlier. The firm is also partnering with large residential complexes in Gurgaon for expanding the reach of its beauty and repairs segment, setting up kiosks in such complexes. The move is aimed at furthering brand visibility in areas which offer potential for a large captive customer base. While beauty, appliance, electronic repairs and handyman services form the top categories for UrbanClap, FY19 will see the firm invest to grow deeper into other categories such as home painting, tutoring, etc by offering full stack services for professionals.
Tags : News/Views