Urban Company: Asia’s Largest Tech-enabled Home Services Marketplace
Urban Company is the go-to platform if you’re looking for anything from pedicures to home painting.
Where do you go looking for a technician when you need a home appliance fixed? Or what happens when your bathroom pipe abruptly starts leaking?
Traditionally, people in India had to go through a broken system to connect with different service providers. For instance, you would rush to your friends or neighbors or flip through the yellow pages for recommendations on reliable plumbers, electricians, painters, etc.
Hiring a local service provider was incredibly challenging in India. Realizing this, in 2014, three young men, Abhiraj Singh Bhal, Varun Khaitan, and Raghav Chandra, formed the home service startup UrbanClap (now called Urban Company).
The startup leverages the on-demand economy and eradicates the difficulty of finding professionals. As a result, it has become Asia's largest online home services platform in just a few years. In less than eight years, Urban Company has achieved a valuation of $2.8 billion and is available in 50+ cities in India and nine cities in other countries.
Here's the success story of Asia's leading home services provider.
The Trio Behind Urban Company
Urban Company provides services through its app and website under two verticals: home repair and maintenance and beauty and wellness.
The trio of Abhiraj Bhal, Varun Khaitan, and Raghav Chandra are the great minds behind this fantastic idea.
The Urban Company (UrbanClap) Founders
Abhiraj Singh Bhal (born December 1986) attained his Bachelor of Technology in Electrical Engineering degree from IIT-K (the Indian Institute of Technology, Kanpur) in 2009, followed by an MBA from IIM-A (the Indian Institute of Management in Ahmedabad) in 2011.
After attaining his MBA, Abhiraj worked in BCG (Boston Consulting Group) at their Mumbai and Singapore offices.
Abhiraj and Varun Khaitan were batchmates at IIT-K.
After graduating, Varun (born in September 1987) worked as an Engineer at Qualcomm in California. After his stint there, he worked as a consultant at BCG's New York and Istanbul offices.
The duo quit their BCG jobs in April 2014 to start their first startup, a movie streaming service they named Cinemabox. However, unfortunately, the streaming service was scrapped after just six months.
Later, they met Raghav Chandra (born in February 1990) through a common friend. Raghav graduated with an Electrical Engineering and Computer Science degree from UCL (University of California), Berkeley, in 2011. After graduating, he had brief stints at Yelp, Inc. and Twitter. Thereafter, he worked on his own venture— an auto-rickshaw aggregator startup called buggi.in, which lasted just six months.
When the trio realized their ventures weren't taking them places, they got together to create a hyperlocal marketplace. They began their venture with an investment of 1 million Indian Rupees each. Around October 2014, they launched the marketplace, known today as "Urban Company."
At Urban Company, Abhiraj handles marketing and product growth. Varun is responsible for operations and service provider onboarding. Raghav oversees technology and product development.
Their startup became a Unicorn in less than five years of its inception. It’s currently valued at $2.8 billion and is led by the mission: "To empower millions of service professionals by delivering services at home in a way that has never been experienced before."
Building an All-in-one Platform
Urban Company is an all-in-one platform that allows users to get services from a professional with only one touch. Some of these service professionals include beauticians, masseurs, sofa cleaners, carpenters, and electricians. The company works closely with its service partners and helps them with up-skilling, financing, etc., to help them be successful micro-service entrepreneurs.
The first ever promotions by Abhiraj and his team included giving demos to groups of employees at different companies. They also connected service providers with customers through Facebook groups. The trio wanted to ensure the company was off to a good start. So, they even scouted the markets of Delhi for potential customers.
Soon after, they created the UrbanClap website and advertised their business on Facebook. The cost of the FB ad was ₹4,000 (equal to around $65 then) and was their first such investment.
At that stage, their workforce comprised the three co-founders and two other employees. The company still had some way to go.
The trio bootstrapped the company till an investment in 2015 of $1.6 million poured in. The investment came from the U.S. VC firm Accel Partners and early-stage investor SAIF Partners. Finally, in March 2015, they launched the UrbanClap (now Urban Company) app.
Urban Company’s Hurdles & Path to Success
Hurdles are always part of the path to success, especially when you have a big idea. There are three primary hurdles Urban Company faced and overcame along the way:
- How to partner with service professionals directly rather than through intermediaries?
- How to ensure quality service to customers while making sure the service professionals make enough money to stick around?
- How to ensure the services provided through the platform were standardized.
Due to the company's rigorous selection process, only 20% to 30% of applicants make it through. Moreover, the selected service professionals are not considered employees but are micro-entrepreneurs. Each selected professional is assigned a rating. A rating of 4.5/5.0 brings them into the red zone, and a rating below 4.2 removes them from the platform.
Urban Company’s Full-Stack Business Model
Urban Company began with very little yet grew fast due to its simple yet effective business model.
The platform connects customers with service professionals directly. Thus, the company has a successful revenue-generating business model. Revenue comes from commissions, reverse auctions, and advertisements.
In 2019, Urban Company adopted a full-stack approach in its business model to engage better with customers. In the full-stack model, the company uses algorithms for automated matchmaking. This helps save time and money and eliminates the middlemen (logistical and commercial).
The business model relies on the use of Artificial Intelligence and Machine Learning technology. The technology assists the app in discovering data insights and patterns of the users to know the customer’s needs better.
From UrbanClap to Urban Company
In January 2020, the company initiated its brand makeover. It changed its name from UrbanClap to Urban Company. The basis for this decision was to focus on its key verticals to become a horizontal gig marketplace and expand globally.
Trust and reliability are an important characteristic of the brand. To achieve this, Urban Company maximizes the safety of customers by conducting thorough background checks and police verification of professionals. It also ensures uniform service quality by giving mandatory training to all professionals.
In very little time, the founders raised a good amount of funds from different ventures. By 2015 alone, the startup had raised over a million dollars.
To date, Urban Company is funded by 16 investors. A total of $445.9M in funding over 12 rounds has been raised. Their latest was a series F round on June 2, 2021, wherein $255 million was raised led by Prosus Ventures, Dragoneer and Wellington Management, with participation from Vy Capital, Tiger Global and Steadview.
Furthermore, the company has acquired 3 organizations. Their most recent acquisition was Glamazon on Mar 4, 2020. The other two being Goodservice and HandyHome.
With each round of money raised, Urban Company utilizes the funds for further innovation, product development, training, enhanced quality control and safety measures for both partners and users.
Global Expansion & Future Plans
In 2022, amidst weak market sentiments, Urban Company wound up its operations in Australia. Presently, it is also rethinking its US strategy. Meanwhile, the company is stalling further global expansion for the time being as it is turning its focus back to India to be on a path to profitability— since India is responsible for over 90% of the company’s revenues. The startup currently has over 32,000 trained service professionals, over 90% of whom are in India.
Apart from its extensive India operations through 54 service-providing cities, the company operates in 9 international cities across the UAE, South Africa, Singapore, and United States. All in all, over 5 million happy customers are being served globally.
Urban Company has crafted a tremendous name for itself due to its straightforward, effective business strategy. The company has kept its business model uncomplicated since the very start and plans to keep things working that way.