UrbanClap, the largest home service marketplace in the Indian startup ecosystem has revealed its financial reports for the fiscal year 2018-19, and it’s a fresh wave of spring.
Abhiraj Bhal, co-founder and CEO of the company started with the crux of the matter – the number of orders that go on to make the entire financial story.
When the company was founded four years ago, they had a minimum volume of 1 lakh during the fiscal year. That figure maintained a 3X growth every year to achieve a 3.25 million order volume in FY19.
“This roughly translates into Rs 400 crore worth Gross Merchandise Value (GMV) and Rs 116 crore in net revenue,” elaborated Bhal. The 3X growth in volume again has been validated by the year on year growth in revenue. Starting from Rs 80 lakhs in FY16, it has now reached a Rs 116 crore mark. To be exact, this is a 2.2X jump from Rs 53.48 crore revenue in FY18.
To further elevate the consistency of this pattern, Bhal postulated that the FY19 exit order run rate, i.e. order volume in April 2019, was 625,000 orders a month amounting up to 7.5 million volume in a year.
“Looking at this, I don’t think it’s unreasonable to execute 10 million orders, translating into Rs 1,200 crore GMV and Rs 250 crore net revenue during the fiscal year, until and unless we execute poorly.”
As Bhal had told Entrackr in December, beauty services contributed 45% of this revenue – approximately Rs 50 crore, followed by repairs and maintenance adding 30% income – Rs 35 crore.
“The plan is to go deeper into these categories and foray into new ones as well. Recently, the company had added painting and express cleaning to its service portfolio,” said Bhal. But as far as expansion plans are concerned, UrbanClap isn’t limiting the diaspora to products and services. Geographical expansions is gearing up even faster than other aspects.
Already present in 10 Indian and 1 international city, Bhal and team are pushing the firm’s journey to 10 more tier II Indian cities in the upcoming fiscal year. Internationally, Dubai’s fellow city, Abu Dhabi is next on the hit list apart from 1 other city in a country other than UAE. For this, there are 6 cities like Singapore in the shortlist and the final decision is yet to be made.
The tier II targeting in India comes from the company’s observation of tremendous response from Jaipur and Chandigarh – two cities that UrbanClap launched in the latest completed fiscal.
All these plans were bound to put a dent on the company’s losses. “This is an investment that shall reap benefits in future. If we wanted to we could have become profitable now, but we chose to invest in a better future,” explained Bhal while talking about the reasonable increase in losses.
From Rs 67 crore in FY17 to a reduced figure of Rs 57 crore in FY18, to the latest Rs 72 crore figure, the losses of UrbanClap have seen its ups and downs, but it’s all the part of a growth chart. The company still plans to make loss in FY20, banking on its investment plans. Maybe by the end of FY21 is when the break even comes into the target picture.
Funding wise, the firm had raised a $50 million Series D round in December 2018 and a $2-2.5 million slice of the cake was shared with employees as well. At that time, the firm’s valuation had reached $500 million.
Looking at the current revelations around the financial growth, UrbanClap’s future in the home service marketplace segment of the economy continues to seem top notch. Right now, as per industry estimates, the market leader seems to be holding 80% plus share with a no close second.
Combining this with company’s plans to double its 100 person tech product team to further develop platform, core user and partner journey, training, data intelligence, its targets of 10 million orders and Rs 250 crore revenue in FY20 seems absolutely reasonable.
In the end, a holler to this company for advocating transparency with media regarding financial performance.
The company’s audited financial statements reveal that it generated operating revenue of Rs 115.7 crore in FY19, growing 2.5X as compared to Rs 46.7 crore in FY18. Urban Clap’s total expenditure also grew by 97.3 % to Rs 217 and it recorded a loss of Rs&%.3 crore during FY20.