Urban Company Receives Shareholder Nod for IPO, Scales Down Its Fundraising by Over 80%

Home services startup Urban Company has received formal approval from its shareholders to raise ₹528 crore (approximately $60.6 million) through a fresh issue of equity shares in an upcoming initial public offering (IPO). This decision was reflected in filings made with the Registrar of Companies (RoC).

The company, backed by prominent venture capital firm Accel, plans to list its equity shares on one or more recognised Indian stock exchanges. The listing aims to provide shareholders with a structured marketplace to trade their holdings.

A Sharply Reduced Issue Size

Initially, Urban Company had ambitions of launching a ₹3,000-crore IPO. However, according to the news report, the company has scaled down its fundraising by over 80%, citing volatile market conditions as the key reason for the strategic revision.

This recalibrated approach reflects the caution exercised by startups amidst fluctuating investor sentiment in the Indian equity markets.

Leading Investment Banks on Board

Urban Company has reportedly roped in Kotak Mahindra Capital, Goldman Sachs, and Morgan Stanley as the book-running lead managers for the proposed public issue. These institutions are expected to guide the company through the regulatory and investor engagement process.

The company is also expected to file its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) shortly, marking a critical step towards the IPO.

Foray into Quick Commerce with Insta Maids

Urban Company’s IPO announcement comes close on the heels of its entry into the quick commerce space with a new service offering called Insta Maids.

This 15-minute maid booking platform offers essential home services such as utensil cleaning, brooming, mopping, and basic cooking preparations, carried out by hourly-paid gig workers.

With this move, Urban Company seeks to leverage the growing demand for on-demand household services, tapping into a broader consumer base.

Funding History and Valuation

According to data from Tracxn, Urban Company has raised $376 million across 12 funding rounds. Its last significant fundraising was in 2021, when it raised $255 million in a round led by Prosus, Dragoneer, and Wellington Management.

At that time, the company was valued at $2.5 billion. The upcoming IPO is expected to provide existing investors with a partial exit while offering new investors a chance to participate in its growth journey.

Operational Scale and Reach

Urban Company has grown to become a dominant player in the home services and beauty salon marketplace. It currently operates in over 30 Indian cities and has expanded into international markets such as Singapore and Saudi Arabia.

The platform facilitates approximately 2.2 million orders per month, with an average order value of ₹1,290. As of FY24, it claims to have 57,000 partners, who collectively delivered 23 million services over the year.

Conclusion

Urban Company’s IPO journey marks a significant milestone in its business lifecycle. While the fundraising size has been revised in light of external conditions, the company’s long-term strategy remains focused on growth and service diversification.

This development will be closely watched by both institutional investors and market participants as the company moves closer to its listing milestone.

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