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Can Urban Company Pass Covid-19 Test After 2.4X Surge In Bookings In FY20?

Can Urban Company Pass Covid-19 Test After 2.4X Surge In Bookings In FY20?

Urban Company said its operating revenue for FY20 was INR 216 Cr

Beauty and wellness vertical contributed to approximately 55% of its revenue in FY20

The company sees mid-term impact of Covid-19, which may vary depending on the lockdown extension or exit

Gurugram-based hyperlocal services provider Urban Company announced on Tuesday (May 12) that its operating revenue for the year ending March 31, 2020 was INR 216 Cr, under IND-AS method.

The company said that last year under IND-AS method its operating revenue was INR 106 Cr. This year, the company changed its accounting method from GAAP to IND-AS as the company crossed a certain revenue threshold, said CEO Abhiraj Bahl. In comparison under GAAP measures, the company said it has operating revenue of INR 242 Cr in FY20, as against INR 116 Cr in FY19. Bhal clarified that these are consolidated figures, but refused to share details of expenses and loss for the year.

As Inc42 reported earlier, in FY19, Urban Company reported consolidated revenue of INR 141.6 Cr, with expenses of INR 216.9 Cr, leading to a loss of INR 75.3 Cr. On a standalone basis, Urban Company spent INR 211.66 Cr in FY19 to earn INR 141.15 Cr for the year, leading to losses of INR 70.5 Cr for the year.

The company’s consolidated performance includes its international businesses in Dubai, Australia and Singapore. Bhal didn’t share any figures but said that Dubai business had a good performance in beauty and cleaning categories. Bhal also said that in April, the company had the first profitable month in Dubai. He noted that Australia and Singapore businesses were launched in January 2020, but business was disrupted due to the Covid-19 pandemic. Bhal said that the company is looking to invest heavily again once the situation improves.

For FY20, Bhal also said that the company’s net booking value of all transactions grew 138% from INR 385 Cr in FY19 to INR 918 Cr in FY20. Explaining this growth, Bhal said that the company expanded into 10 new small cities in the year, while the beauty and home repair business also gained traction.

The company said that the beauty and wellness vertical contributed to approximately 55% of its revenue in FY20. The runner-up category, Bhal said, was home repair services.

Founded in 2014 by Abhiraj Bhal, Raghav Chandra and Varun Khaitan, Urban Company offers home services like beauty and spa at home, cleaning, plumbing, carpentry, appliance repair, painting. The company has nearly 30K service partners, with over 10K beauticians and hairdressers. Backed by investors like Tiger Global, Steadview Capital and Vy Capital, the company has raised $185.9 Mn in funding till date. Over the last months of disruption due to Covid-19 pandemic, the company has been doing its part to support its service partners.

Urban Company had set up a Covid-19 relief fund to provide sustenance support to its 30K service providers over the next few months. The founders, investors and employees contributed INR 1.5 Cr to this fund. The company is providing interest-free business advances with delayed payback period, income protection and health insurance. In addition, it will also be covering existing life, accidental and health insurance.

However, even if the company had a high growth performance in FY20, the company is looking at a dull start for the new financial year. This is further induced by the fact that the consumer services industry has been one of the major hit of covid-19, and recovery period may anywhere be between a few months to a few quarters.

Bhal said that the company sees mid-term impact, which may vary depending on the lockdown extension or exit. This easily means that at least two-quarters of FY21 will be disrupted with fewer bookings on a Y-o-Y level. Bhal, however, says that they expect business to pick up pace after lockdown ends, as customers would be looking to avoid getting out of the home due to safety risks.

Despite having resumed home repair services in certain cities and all services in orange and green zones, Urban Company has been requesting the government to allow beauty services at home in red zones as well, citing the impact of services on nearly 70 Lakh beauty service providers.

The company has assured the government that it would be following the mandated safety and hygiene measures and urging all service professionals to install the Aarogya Setu contact tracing app. Bhal explained that the company is constantly tracking the Aarogya Setu status of its status partners and has also been asking customers for self-declaration for health. Service providers are also allowed to decline service if the home or service location seems unsafe to them.