1. What is the problem that they are solving?
They solve new emerging and both old school problems with their model. They provide jobs to skilled professionals by connecting them to users looking for specific services hence hindering unemployment. They also upskill the service providers by making them pass extensive training and providing them with new-age modern tools that will optimally solve future and present problems. Urban Company demolished the traditional way of people taking services from the available nearby shops and following up with them till the job gets completed. No wait people also had to follow up with them regarding payment issues but all these steps were replaced by a few clicks that enabled the user to experience highly skilled services with luxury such as:
I. Urban Beauty: Salon and makeup services for women at home
II. Urban Spa: Massage therapy for men and women at home
III. Urban Grooming: Haircut and grooming services for men and kids at home
IV. Urban Repairs: Electricians, plumbers, carpenters, AC, and appliance repair
V. Urban Cleaning: Regular and deep home cleaning solutions
VI. Urban Painting: Professional home painting services
VII. Other services, such as fitness and yoga at home and pest control
2. How are they solving that specific problem? Do you think they have a good product-market fit?
Microservice architecture is an approach for creating cloud applications. Each application has multiple sets of services, and each service has its process and communicates through APIs. This is the medium through which they solve the problem of both creating employment and providing services.
The business works closely with Service Providers for Individuals (ISPs) and turns them into micro-entrepreneurs. UrbanClap does so by offering market access, credit, insurance, training, inventory, acquisition, payment, and a host of other services to ISPs. Consumers can avail of the services through the mobile app or website.
The model currently used by the urban company is applicable only in metropolitan cities to expand the company to sub-urban and rural areas, they need to go through a lot of changes or come up with a whole new strategy. If they become much popular then they also need to deal with areas that are red-listed. There are many competitors but all are at this time lacking behind because the urban company has built some tactics that are being helpful in capturing the market.
3. A brief about their industry-
The home services industry in India is expected to reach USD 65.51 Billion by 2026, growing at a CAGR of 27.2% from 2019 to 2026. From the consumer’s point of view, home services is an attractive service model as it is time-saving for the consumer as well as credible.
4. How did they scale the company from a startup to a huge conglomerate?
Over the years, the company decided to focus on a few select services — home maintenance and grooming/beauty. It developed close integration with the supply ecosystem, which runs on various levels. The service delivery experience was condensed into five levels, to make it straightforward for customers and professionals. This became their most significant competitive advantage — and the founders earlier shared that it took two years to perfect this five-level model.
Urban Clap rebranded itself as Urban Company in 2020, a name aligned with the company’s ambition to be a horizontal gig marketplace, with a global footprint and leadership position across service categories.
5. How and from where did they receive funding?
Apr 2015: The startup recently got a vote of confidence from SAIF Partners, Accel Partners, and Snapdeal founders Kunal Bahl and Rohit Bansal, who participated in a $1.6 million seed round last week.
Jun 2015: Mobile services marketplace, UrbanClap, has raised $10 million in funding from its existing investors SAIF Partners and Accel Partners. The new round is the second round of funding by the company.
Nov 2015:UrbanClap, which uses a matchmaking algorithm to help consumers find the best service providers in major Indian cities, plans to scale rapidly after landing a $25 million Series B. The round was led by Bessemer Venture Partners, with participation from returning investors SAIF and Accel Partners, and brings UrbanClap’s total venture funding so far to $37 million.
Jul 2017-Series C funding-
$21,000,000
Nov 2018:UrbanClap raises Series D funding of $50 M led by Steadview Capital and Vy Capital
Aug 2019: UrbanClap, a marketplace for freelance labour in India and the UAE, has raised $75 million in a new financing round to expand its business. The Series E round for the four-and-a-half-year-old India-based startup was led by Tiger Global. Existing investors Steadview Capital, which led the startup’s Series D in December last year, and Vy Capital also participated in the current round. The startup, which has raised about $185 million to date, said some early investors sold portions of their stake as part of the new round.
Amount Raised till 2020 :
$203.6M
JUNE 2, 2021:
Home services platform Urban Company raises $255 million at $2.1 billion valuation
The new financing round — a Series F — was led by Proses Ventures, Dragoneer, and Wellington Management, while Vy Capital, Tiger Global and Steadview participated in it.
The startup plans to file for an IPO within the next 24 months.
6. The top management of the company-
The top management team comprises of:
I. Abhiraj Bhal- Marketing
II. Raghav Chandra- Technology and Product Development
III. Varun Khaitan- Operation and Service Provider on-boarding
Thereby ensuring the three most important aspects of their business are well-taken care of.
7. Present and future cash flows -
1. Urban company‘s revenue is mainly through commission charged on the services provided.
2. They are in tie-up with the local service providers and they are the bridge between the service provider and customer. They earn through commission in that.
3. For uniformity to be maintained across India, they sell the products themselves only.
Ex- Like in beauty parlour service, they ask the service providers to purchase products from their company, so that the reputation of their site is maintained.
4. They earn 70% from the commission and 30% from sales.
5. The company is growing at a double rate per year.
They have earned 55% in beauty parlour services themselves. They will now have a focus on this stream. They have now delisted many non-revenues generating services from their site.
8. USP (Unique Selling Points)
The Urban Company has mainly 4 unique selling points -
1. It’s an all-in-one platform that helps users hire any professional, literally any professional that you require for carrying out skilled day to day chores.
2. The interface of the app and its website is made so that it can be used by all generations and classes of society.
3. They provide greed to customers so that they can retain them by giving them vouchers, coupons and personalized discounts.
4. They have a top-notch organizational structure with marketing ideas and brand ambassadors that reach their targeted audience. Eg. They have Ayushman Khurana and Kriti Sanon as their brand ambassadors which helps them get relatable to the middle-class section of the society as they both come from typical middle-class families.
9. Entry barrier
1. Foreign companies need to do more groundwork and it is not possible for them to understand the Indian market.
2. The companies that enter the market need to do a lot of research even before starting the company which costs a lot.
3. The newer companies are not able to make partnerships with many of the organizations that are helpful to service providers that provide tools and skills to them.
10. Unfair advantage
Due to any physical, political or disease outbreak, people may be in fear of taking services visiting stores, calling unprofessional. Now people are focusing more on services from home. This is an unfair advantage to them.
Secondly, they give too many discount offers clubbed, prices lesser than the branded-service providers.
This type of company requires a lot of groundwork, funds and research work which eliminates the possibility of new companies emerging in the market.
They are now a dictator because of extensive area coverage.
11. SWOT analysis ( Strengths, Weaknesses, Opportunities, Threats)
Strength-
1. The budget fits the choices.
2. Trusted professionals.
3. Ideal for last moment requirements.
4. All requirements are processed according to personal choice.
5. Best of the class marketing team.
Threats-
1. Local labour
2. The labour union may not understand their objective and might be a threat to them.
3. The service providers broke the link of customers with this company by giving them less prices and in return giving clients and money as a whole. They do this to cut the commission earned by the company.
4. In Tier-2 and lower-tier cities, they need to make different strategies to enter the market because the diversity in India changes the ground reality from city to city.
OPPORTUNITIES -
1. They are currently not involved with any large scale projects or contracts. If they scale their service force up to that model then they can get a large profit and can create contracts with other businesses or projects.
2. They can acquire companies that help them get training for their service providers or companies that provide tools for them but they have not pondered over this topic.
3. For testing their company in Tier-2 cities they can collaborate with the local leading service providers.
WEAKNESSES -
1. They need to red list areas where goons do not make payment to the company after getting the service so their area coverage gets reduced.
2. Their prices are slightly higher because of providing the platform so they lose customers that live close to a market or which have typical Indian thinking.
3. The service providers that reach to professional and personal spaces are not monitored for any misconduct such as thefts etc.
