2025 For Urban Company: New Verticals, New Realities, New Pressures

After a journey of nearly a decade, Urban Company expanded its wings beyond services to enter the products space sometime around 2022 and 2023. This initial push towards diversification gained momentum in 2025, as the company sharpened its focus on building its own product portfolio. 

As Inc42 reported earlier this year, Urban Company began exploring its own line of air conditioners under its ‘Native’ brand. While this has not materialised yet, the turn from services to a products company is not over. In fact, in 2025, Urban Company doubled down on services before it went public. 

First, it launched Revamp, a new home improvement brand offering one-day small-space makeovers across major cities such as Mumbai, Delhi NCR, Bengaluru, and Hyderabad, further broadening its revenue streams. The company also joined the quick commerce wave with Insta Help. By the time it entered the public markets, Urban Company had managed to convince many that it still had a long growth runway ahead.

The market responded positively. As the first established startup of its kind to go public, Urban Company had no listed peer for direct comparison, one of the key factors behind the strong investor enthusiasm surrounding the issue.

The IPO saw an oversubscription of nearly 104X, with robust demand from institutional, HNI, and retail investors alike. The stock made a strong debut on September 17, listing at INR 161 on the BSE, 56.3% above its issue price. On the NSE, it opened at INR 162.25 per share, marking a premium of 57.5% over the issue price of INR 103.

That said, the journey has not been entirely smooth. Urban Company wound down its step-down subsidiary in Saudi Arabia after it struggled to achieve profitability, as disclosed in its DRHP. At the same time, the company has been navigating intensifying competition from newer startups such as Snabbit and Pronto in the Insta Help segment, which has also added to operating costs.

The company said in its earnings call that this new segment reported an adjusted EBITDA loss of INR 44 Cr. Adding to the pressure, Urban Company slipped back into losses after just over a year of maintaining profitability. Unsurprisingly, the stock has faced selling pressure since listing and is down 25.16%, according to exchange data.

Overall, Urban Company closed 2025 with several strategic wins, while also encountering the realities and scrutiny that come with being a publicly listed company.

IPO And The Profitability Trade-Off

The diversification push has once again nudged Urban Company back into losses, underlining the delicate balance it is trying to strike as a newly listed company. FY25 marked a turning point, as Urban Company reported profitability for the first time after years of operating losses, a milestone that significantly strengthened its IPO narrative. 

However, in the quarters following the listing, profitability proved narrow and highly sensitive to investment cycles, reviving questions around the optics and sustainability of earnings at the time of the IPO.

While Q1 FY26 delivered a net profit of INR 6.9 Cr, the company slipped back into losses in Q2 FY26, reporting a net loss of INR 59.3 Cr. This reversal was largely driven by upfront investments aimed at scaling new verticals rather than any deterioration in the core business. 

The listing story, in hindsight, leaned more on future potential than present-day stability. Growth engines such as products under the Native brand, instant services via InstaHelp, and a broader suite of home solutions were positioned as long-term value creators, even as the core services business continued to operate on relatively thin margins.

As one market analyst at a leading brokerage firm noted, high valuations leave limited room for execution missteps. Competition from unorganised service providers and quick-commerce-led instant service startups is intensifying, while operational challenges around service quality, partner retention, dispute resolution, and rising compliance costs,remain areas to watch.

That said, the company’s management appears comfortable with near-term losses as it prioritises scaling its newer segments. On the products side, CEO Abhiraj Singh Bhal highlighted improving visibility and operating discipline within Native. During the Q2 earnings call, he noted that the P&L trajectory for the brand has become clearer, margins are steadily improving, and while Urban Company is not committing to a fixed timeline for adjusted EBITDA breakeven, it believes peak losses are behind it and the business is moving in the right direction.

In contrast, the tone around InstaHelp was more measured. Describing it as still in a very early stage, the CEO acknowledged that both unit economics and the P&L are continuing to evolve. For now, the focus remains on growth and market leadership, even as management keeps a close eye on costs and return on investment.

“While the near-term numbers may concern investors, the longer-term narrative and clarity around its multiple growth engines beyond its core services, still make it a good bet for investors,” the market analyst quoted above added.

A Year Of Strategic Turns

Urban Company’s expansion into consumer durables accelerated meaningfully in 2025, moving well beyond its initial foray into water purifiers and smart door locks. What began as an adjacent experiment under the Native brand back in 2023, increasingly took shape as a core strategic pillar this year.

The numbers are also indicating the same. In Q2, Urban Company’s connected home solutions vertical reported sharp growth, with Net Transaction Value (NTV) rising 164% year-on-year to INR 97 Cr, while revenue grew 179% year-on-year to INR 75 Cr. Water purifiers and electronic door locks saw strong market acceptance, driven by robust design, low maintenance requirements, and tight integration with the Urban Company app for monitoring and servicing, the company said.

Margins also improved materially. Native’s contribution margin narrowed from negative 30% of NTV in the same period last year to negative 9% in Q2, despite some demand being pulled forward due to an early festive season. Bahl reiterated that the business is on a clear path to profitability.

Inc42 reported earlier that Urban Company is now preparing to deepen its consumer durables play. According to sources, its next major product could be an in-house line of air conditioners. While the company has not officially confirmed the launch, sources told Inc42 earlier that the first product could be ready by December this year or early next year, with a market rollout ahead of the summer 2026 season, potentially aligning with its post-listing growth phase.

From a strategic standpoint, management has been clear that Native is being built with superior unit economics in mind. The company’s stated priority is to take Native to adjusted EBITDA breakeven, with the longer-term belief that margins can exceed those of traditional OEMs. 

This shift toward electronics and durables, where margins are structurally higher than services, has given Urban Company a clearer pathway to chart a stronger unit economics this year.

That said, the pivot has not been without friction. The company’s reliance on third-party OEMs has helped keep capital expenditure low, but it has also raised questions around long-term differentiation and quality control.

Litigation risks, including disputes such as the one involving KENT RO, have further highlighted the vulnerabilities inherent in scaling a product-led business alongside a services marketplace.

The InstaHelp Bet 

What marked Urban Company’s most ambitious experiment of 2025 is InstaHelp, testing whether instant home services could be scaled reliably across India’s largest metros. Launched in the first half of the year, the segment effectively went through its first real stress test during the festive season.

Early traction was strong. Within months of launch, InstaHelp scaled to 4.7 lakh orders in October alone. However, the unit economics remain a work in progress. With average order values in the INR 180–200 range, InstaHelp is fundamentally a volume-led business rather than a margin-driven one. Worker onboarding, migration, and availability across dense micro-markets have added to costs, contributing to an adjusted EBITDA loss of INR 44 Cr for the segment.

InstaHelp is being positioned as a long-term investment designed to deepen app engagement, increase frequency, and expand Urban Company’s total addressable market. Drawing parallels with beauty and cleaning, now mature profit pools, the company believes instant services can follow a similar trajectory as scale and operational efficiency improve.

But the execution challenges are materially different. Instant services require dense supply, tight quality checks and controls, and real-time coordination across hundreds of micro-markets. Seasonal demand surges, worker churn, and logistics disruptions have made supply consistency a persistent challenge. Early branding missteps, such as the rebranding from Insta Maids to InstaHelp following social backlash, also highlighted the sensitivity around perception and labour narratives in this category.

Competition has further raised the stakes. Startups such as Pronto and Snabbit, along with adjacent quick commerce platforms, have intensified hiring, incentives, and pricing pressure. 

Unlike organised players such as BookMyBai, Broomes, and Helper4U, many of which operate with higher AOVs and marketplace-style pricing, instant services demand speed, predictability, and uniform pricing, compressing margins in the early stages.

Despite this, management remains bullish. Leadership has pointed to encouraging early data around retention, repeat usage, and frequency, particularly in micro-markets where discounting is limited. While acknowledging that the business is still only eight months old and that metrics will take time to mature, the company has described InstaHelp as its most exciting new initiative in years, one it is firmly committed to scaling, while remaining disciplined on returns.

Urban Company: Between Expansion And Restraint

In hindsight, InstaHelp captured Urban Company’s 2025 mindset, willing to absorb near-term losses to secure long-term relevance, betting that its decade-old playbook in services can be adapted to the demanding economics of instant fulfillment. Whether that bet matures into a sustainable profit pool will be one of the most closely watched threads in its post-IPO journey.

Urban Company’s 2025 story was defined as much by selective pullbacks as by aggressive expansion. The decision to exit its Saudi subsidiary after sustained losses and pivot to a JV-led model signalled a more disciplined approach to overseas growth. At the same time, gig workforce shortages across markets such as the UAE, Saudi Arabia, and Singapore exposed the operational limits of scaling service-heavy models internationally.

Back home, Urban Company continued to widen its canvas. Revamp was launched to tap higher-ticket, micro-renovation demand, while Native, InstaHelp, and instant services stretched the brand from a pure services marketplace into appliances, quick fulfilment, and home makeovers. This breadth opened new revenue pools but also diluted brand clarity and added execution complexity.

Marketing spends and multiple category launches further weighed on near-term margins. As a listed company, Urban Company now faces a defining question: can products, instant services, and core offerings coexist sustainably within one platform? The answer will determine whether 2025 is remembered as a year of overreach or the foundation of a more resilient, multi-layered business.