The valuation of Delhi NCR-based hyperlocal services startup Urban Company has risen by 33% to $2.8 Bn with its latest employee stock exchange (ESOP) program. The startup had entered the unicorn club in June 2021 at a valuation of $2.1 Bn.
The startup concluded its fourth (and largest) ESOP round worth INR 55 Cr, taking the total across four rounds to INR 100 Cr. While Urban Company has allotted ESOP plans to 940 current and former employees, 550 of them could sell their shares in the current round.
Interestingly, only 4.4% of the vested ESOPs held by current employees and 10% held by ex-employees were liquidated. A majority of the shares was purchased by existing institutional investors of the home services provider.
Founded in 2014 by Abhiraj Bahl, Raghav Chandra, and Varun Khaitan, Urban Company (formerly known as Urban Clap) is backed by marquee investors such as Prosus Ventures, Dragoneer, Wellington Management, Vy Capital, Tiger Global and Steadview, among others.
The home service company aggregates beauty and massage, appliance repair, plumbing, carpentry, cleaning, and painting providers with customers across 10 Indian cities and four international markets including Australia, Singapore, Dubai and Abu Dhabi.
It has over 1,200 staff across functions on its payroll, with 940 of them having been given a chance to avail ESOPs. Shedding light on the company’s ESOP Playbook, cofounder Khaitan, during Inc42’s WTF: Startup Equity session stated that retaining talent is one of the top priorities for his startup. “One of the ways of doing it is having an employee-friendly ESOP policy.”
While 80+ of its staff have spent more than four years in the company already, the startup was recently mired in controversy after several Urban Company partners such as beauticians, repair workers (not employees) staged protests outside its headquarter on its policies and poor pay. Following this, the company slashed its commission cap by 5%.
The startup posted total revenue of INR 289 Cr in FY21 as compared to INR 263 Cr in FY20. Also, it posted INR 247 Cr in FY21 as operational revenue, compared to INR 218 Cr in FY20. Urban Company clocked a total expense of INR 539 Cr in FY21, a 29% jump from INR 418 Cr it posted in FY20.
A large portion of Urban Company’s expenses grew because of a 62% increase in the employee benefits expense in FY21. The startup recorded INR 226 Cr in terms of employee benefits expense in FY21 in comparison to INR 139 Cr it posted in FY20.