Urban Co. (formerly UrbanClap) on Wednesday said it has raised $255 million at a valuation of $2.1 billion, making the hyperlocal service provider the latest startup to enter India’s unicorn club.
The funds raised as part of a Series F round was led by Prosus Ventures, Dragoneer and Wellington Management, and also saw participation from existing investors Vy Capital, Tiger Global and Steadview.
The round comprised a primary capital infusion of $188 million and a secondary sale of approximately $67 million by angel and early investors. The company did not elaborate on the secondary exits.
Much of Urban Co.’s success is down to its popularity since the first wave of the pandemic struck in March 2020. Bookings in March this year are double February 2020’s pre-covid peak.
The company, which aggregates service providers in areas like home cleaning, hairdressing, AC servicing and appliance repairs, now hopes to repeat that success as regional lockdowns in the second wave start to be eased.
Urban Co. last raised $75 million as a part of its Series E round back in 2019, led by Tiger Global, at a valuation of about $933 million.
According to the company, it will use the fresh investment on product innovation, boosting training and development of partners and expanding across India and overseas.
Urban Co. operates in more than 30 cities in India and in the UAE, Singapore, Australia and Saudi Arabia. It plans to expand to 100 cities, including tier-II Indian cities, by the end of 2022 while ramping up its business in Saudi Arabia and entering the South-East Asian market.
“We will also be launching new categories in different cities and look to expand our international footprint while looking to go deeper with cities including Jeddah, Mecca, Medina in Saudi Arabia. We may also look to enter Egypt and Oman and South-East Asia in 12-18 months,” Abhiraj Singh Bhal, chief executive and co-founder of Urban Co., said in an interview.
Bhal revealed plans to go public by 2023 and turn profitable on earnings before interest, taxes, depreciation and amortization (Ebitda) level in the next 12-18 months.
In FY20, Urban Co.’s consolidated loss widened to ₹155.17 crore from ₹78.48 crore in FY19. Revenue doubled from ₹132.04 crore in FY19 to ₹263.07 crore in FY20, according to regulatory filings filed by the company.
Urban Co.’s India business accounts for about 80-90% of revenue. With the current pace of expansion, the company expects international markets to contribute almost a quarter of overall revenue by 2023.
With the new fundraise, Urban Co. will look at either more acquisitions or acqui-hires and extend its training solution to other firms with large, blue-collar workforces. It is also looking to apply for a non-banking company licence.
“Urban Co. is disrupting a large, fragmented industry that has seen low digital adoption until now. Through their technology-enabled platform and keen focus on providing high-quality, trained service partners, Urban Co. has been able to achieve the very difficult task of productizing services,” said Ashutosh Sharma, head of India investment, Prosus Ventures.
