Urban Company Profitable Before Tax In April 2024: CEO Bhal

SUMMARY

Urban Company CEO Abhiraj Bhal said that profit from India operations now offsets the loss incurred due to overseas operations

Bhal said that the platform will focus on growing profitably and sustainably going forward, while “prioritising” the interests of customers and service partners

In September last year, the Delhi NCR-based startup said that its India business brok even in Q1 FY24 at an “adjusted EBITDA level with negative working capital’

Hyperlocal services startup Urban Company turned profitable before tax (PBT) in April 2024, as per its cofounder and CEO Abhiraj Singh Bhal.

In a post on LinkedIn on Monday (May 13), Bhal said that the startup’s profit from India operations now “offsets” overseas loss.

“In April 2024, Urban Company reached a significant milestone: the consolidated company turned profitable at the PBT level. Although our India business had previously achieved profitability, our investments in overseas markets had kept the consolidated business in the red. However, India’s profitability now offsets the overseas losses, making the consolidated business profitable at the PBT level,” Bhal said in the post.

It is pertinent to note that Urban Company has overseas operations in countries such as the UAE, Australia, Singapore, and Saudi Arabia.

Bhal also said that the platform will focus on growing profitably and sustainably going forward while “prioritising” the interests of customers, service partners, employees, and shareholders.

The announcement came nine months after the Delhi NCR-based startup said that its India business broke even in the first quarter (Q1) of the fiscal year 2023-24 (FY24) at an “adjusted EBITDA level with negative working capital”.

Back then, it also claimed that its net loss declined 40% year-on-year (YoY) to INR 308 Cr in FY23 as against INR 514 Cr in the year-ago period.

The announcement of “profitability” comes at a time when Urban Company has seen several protests by its gig workers in India in the past one year over alleged unfair employment practices and delisting of partners.

Founded in 2014 by Bahl, Raghav Chandra, and Varun Khaitan, Urban Company offers a range of services such as home cleaning, appliance salon and massage, repair services, painting, among others.

Backed by marquee names such as Tiger Global, Prosus and Steadview Capital, the startup has raised more than $445 Mn in funding to date.

While Urban Company is yet to enter the profitable club (profitable after tax), the latest development comes at a time when profitability has become the latest buzzword among startups.

The Indian startup ecosystem has been hit by a raging funding winter in the past two years which has dried up capital across the board. VCs and PEs have tightened their purse strings and are focussing on ventures that are profitable and can grow sustainably.

As a result, a number of Indian startups have taken steps to trim their costs via restructuring exercises and shelving expansion plans. These initiatives are also showing results as a number of startups have managed to turn profitable. For instance, CarTrade, Groww, Fractal, Indifi, and Perfios turned profitable in FY23.