On-demand hyperlocal home services marketplace UrbanClap has raised $50 Mn in a Series D funding round led by Steadview Capital and existing investor Vy Capital.
Backed by marquee investors, the company plans to use the fresh funds to accelerate customer and service partner onboarding, invest in team building, especially on the product and technology front, and build training capabilities.
It will also work on enhancing its supply chain of consumables and continue to invest in building high-quality experiences for both sides of the marketplace.
The company, which started its services in Chandigarh this week, plans to expand its services in a host of Tier 2 cities in India.
Founded in 2014 by Abhiraj Bhal, Raghav Chandra, and Varun Khaitan, UrbanClap offers services such as beauty and massage, appliance repair, plumbing, carpentry, cleaning, and painting. The company claims that its operating model focuses on service professionals with the aim of turning them into micro-entrepreneurs, multiplying their earnings by 2-3 times.
For its employees and early angels, UrbanClap is also facilitating a secondary sale of Employee Stock Option Plan (ESOP) and stocks worth approximately $4 Mn. This is the second liquidity event for UrbanClap’s employees. The company had organised an ESOP sale at the time of its Series C round of funding in June 2017.
Raghav Chandra, cofounder, UrbanClap said, “We have a mission to create more than 1 Mn micro-entrepreneurs for India and other emerging markets. This will require strong execution, and ahead of the curve investments into our technology platform and operational leadership.”
Till date, the company has raised $110.7 Mn funding in seven rounds led by major VC firms like SAIF Partners, Accel Partners and Bessemer Venture Partners. It is also backed by industry stalwarts such as Snapdeal co-founders Kunal Bhal, Rohit Bansal, and Ratan Tata.
Ravi Mehta, Founder and managing partner, Steadview Capital said, “Their tech-centric approach of building quality supply in a trust-deficit market is solving a big consumer need, and enabling service professionals to be micro-entrepreneurs. The company’s focus on customer experience stands out, and we think very highly of the founders and the team.”
UrbanClap: A Click-Away Professional
With operations in eight cities – Ahmedabad, Bengaluru, Chennai, Delhi-NCR, Hyderabad, Kolkata, Mumbai, and Pune – UrbanClap now claims to have served 3 Mn customers with its 100K verified experts as of July 2017.
The company also narrowed its losses to $7.79 Mn (INR 57 Cr) in FY18, which is 14% less than $9.1 Mn (INR 66.7 Cr) recorded in FY17.
In a What The Financials analysis, Inc42 Datalabs found that UrbanClap went big in creating an aggregated marketplace with a wide range of services with ticket sizes ranging from $7.16 (INR 500) to $1432 (INR 1 Lakh).
It had also announced its plan to go international and has already launched operations in Dubai.
Talking about the road ahead for UrbanClap, Pankaj Makkar, Managing Director, Bertelsmann India Investments said that the next phase for the company may be around growth while defending their position and maintaining good unit economics.
Hyperlocal Industry In India
After an early interest from investors and entrepreneurs, startups which had ventured into hyperlocal services suffered a bubble burst in 2016 owing to a lack of clear business models and too many similar apps and services.
However, helped by renewed investor interest in 2017, increasing urbanisation, personalisation of services, and new-age business models, the hyperlocal market in India is currently seeing an upswing.
According to a report by market research firm Ken Research, titled “India Hyperlocal Market Outlook to 2020 – Driven by Rising Startups Firms and Fluctuating Investments”, the India hyperlocal market will grow at a considerable CAGR rate thus exceeding $330.32 Mn (INR 2,306 Cr) by 2020.
Inc42 in its flagship The Ecosystem Report noted that consumer services sector, which has developed around hyperlocal services, raised $2.3 Bn in 456 deals since 2014.
The report emphasised that as new startups plan to adopt the hyperlocal model, it is essential that they first develop robust business models so that they can meet demands, face the competition, and stay afloat without solely relying on the external funding.
However, the next frontier for hyperlocal players will be the fight for market share in Tier 2 and 3 cities.
UrbanClap was part of the 2018 edition of the most coveted list of India’s most innovative startups — 42Next by Inc42.