On July 17, 2024, India-focused investment firm Dharana Capital made a significant move by purchasing shares worth INR 400 crore (or USD 50 million) in Urban Company. This transaction was made through the acquisition of shares from the home-services marketplace’s employees [ESOP Shares] and other shareholders.
Record-Breaking ESOP Sale
This deal marks the largest liquidity event for employee stock options in Urban Company’s history. Vamsi Duvvuri, founder and managing partner of Dharana Capital said, “Urban Company, with its full-stack approach and focus on partner enablement, has built a strong, capital-efficient, and durable business in a challenging local services market.”. Duvvuri will join Urban Company’s board as a non-executive director.
Also Read | ‘Aditi’, an affordable health insurance by Narayan Health: Check how this can revolutionize insurance sector
Dharana Capital’s Portfolio
Dharana Capital typically invests in technology and consumer-focused companies. It also supports other startups like insurance platform Zopper, lending platform Lentra and a real estate services company, NoBroker. NoBroker has expanded into home services similar to Urban Company’s offerings.
Urban Company’s Valuation
Urban Company was last valued at USD 2.1 billion. This was when it raised USD 255 million in June, 2021. While the UC did not disclose the deal valuation, secondary transactions like this generally occur at a discount to the primary shares. In such transactions, shareholders sell their stakes to new or existing investors without the company receiving new capital.
Profitable Growth
Urban Company offers home services such as beauty and spa, cleaning, plumbing and appliance repair. It reported revenues of INR 282-283 crore over the past three months. UC also achieved its first-ever profit in April. Its UAE operations are nearing profitability.
IPO Plans
Initially, Urban Company had targeted to IPO by 2023. But now, Urban Company has deferred these plans and is now aiming for a public listing next year. To prepare, the company onboarded three independent board members in 2022 – Dr. Ashish Gupta, Ireena Vittal and Shyamal Mukherjee.
Also Read | “Bajaj Ki Guarantee” For World’s First CNG Motorcycle: Freedom 125 For The Independent India
Company Background and Financial Performance
Urban Company was founded in 2014 by Raghav Chandra, Abhiraj Singh Bhal and Varun Khaitan. Urban Company saw a 45% increase in operating revenue to INR 637 crore in 2022-23. Its losses narrowed to INR 308 crore from INR 514 crore in the previous fiscal year. The company operates in more than 50 Indian cities and international markets such as the UAE, Singapore, and Saudi Arabia.
About the Author
Mr. Radhesh Tarang Shah, is a management student at Institute of Management, Nirma University. He has a passion for writing articles and poems. He has experience as a financial analyst, author, news writer, marketer and social worker.
