Urban Company’s India Biz Achieves Adjusted EBITDA Breakeven In Q1 FY24

Gurugram-based hyperlocal services platform Urban Company said its net loss declined over 40% to INR 308 Cr in the financial year 2022-23 (FY23) from INR 514 Cr in the previous fiscal year on the back of a strong growth in its business.

In a statement, the startup also claimed that its India business broke even in Q1 FY24 at an adjusted EBITDA level with negative working capital.

“Our India business contributes approximately 90% of our revenues… Our strong unit economics with focused cost control will help us drive EBITDA improvement as the business scales,” said the startup. 

Besides India, the startup has operations in the UAE, Australia, Singapore, and Saudi Arabia. 

In FY23, Urban Company’s adjusted EBITDA loss reduced to INR 297 Cr from INR 377 Cr in the previous fiscal.

Meanwhile, the startup’s revenue from operations jumped 45% to INR 637 Cr during the year under review from INR 438 Cr in FY22.

Urban Company said that the growth in FY23 came on the back of investments in service quality, partner training and enablement, new innovations, brand building, and technology development. 

It is pertinent to note here that the startup has seen several protests by gig workers working with it, whom it calls its partners, in India this year for alleged unfair employment practices 

However, the company vouched for its ESG practices in its annual business summary FY23, published on Friday (August 18).

Talking about its Partner Earnings Index for H1 2023, Urban Company said that the top 20% of its partners earned an average of about INR 40,000 per month, net of all commissions and other related costs (travel, product expenses, etc.).

The average net earnings of partners delivering more than 30 services per month were about INR 32,000, it said.

Besides, the startup said that all its active partners are provided with multiple social security benefits, including free life insurance cover of INR 6 Lakh, free disability insurance cover of INR 6 Lakh, free health insurance cover of up to INR 1 Lakh, up to 12 free medical consultations per year, and more.

Urban Company’s consolidated employee expenses, excluding employee stock ownership plans (ESOPs), stood at INR 311 Cr in FY23 as against INR 262 Cr in FY22.

The company spent INR 73 Cr on employee expenses in Q1 FY24, of which INR 60 Cr was spent on the India business.

The ESOP/ Partner Stock Option Plan (PSOP) cost for the consolidated business declined to INR 95 Cr in FY23 from INR 203 Cr in FY22. In Q1 FY24, it stood at INR 28 Cr.

“In FY23, we granted stocks to 500 service partners, of whom 30% were women,” said the company.

Founded in 2014 by Abhiraj Bahl, Raghav Chandra, and Varun Khaitan, Urban Company offers a range of services such as salon and massage, home cleaning, appliance repair services, and painting. It is backed by marquee investors including Tiger Global, Steadview Capital, and Vy Capital.

The company has raised a total funding of $445 Mn till date. In July last year, it raised $225 Mn in its Series F funding round, at a valuation of $2.1 Bn, led by Prosus Ventures, Wellington Management, and Dragoneer.

Emphasising on its focus on customer excellence, Urban Company said in its statement today that its repeat customers (acquired in years prior to FY23) contributed about 77% of the net transaction value of the platform during FY23.

The startup said this number would surpass the 90% mark in the coming years.