UrbanClap shuts non-core businesses to focus only on beauty and home

Many startups begin early well, claiming good business potential ideas and go one to raise early funds. But as they go along, the majority of startups face tough challenge achieving growth objectives and goals.

Largely because they focus on too many things ignoring their core businesses, which yield largest return on investment.

This seems to be the case with home services marketplace UrbanClap. The Gurugram-based based firm amidst expansion plans is now shutting down all non-core businesses such as wedding services and photography.

The marketplace will now focus on two categories beauty and home, which contribute more than 70-80% to the company's revenue. It is planning to manage and control the supply side of its business.

"A transaction platform can only survive and thrive if the supply side is extremely dependent on the marketplace for livelihood and sees the immense value,” said Abhiraj Bhal in an interview to ET.

Suppliers should also get credit, training, procurement, technology and insurance facilities, he added. The company aims to garner revenues over Rs 250 crore for FY20.  In FY19, it recorded Rs 116 crore in revenue.

Among new services, UrbanClap plans to start offering a luxury salon at home service to compete with the high end of the market (with an average order value of Rs 2,000).

In the service sector, a platform with several categories face a tough challenge in building and operating seamlessly. The marketplace has to take a lot of pain matchmaking between service providers and customers.

One of the major challenges in the services business is the unskilled workforce. In the next five years, UrbanClap plans to run a training program for all the categories it will offer service in.

Till date, the five-years-old firm offered service including beauty and spa at home, plumbing, cleaning, plumbing, carpentry, appliance repair and painting.

So far, UrbanClap has raised a total of $185.9 million in fundings. In its last financing round, the company raised $75 million from Tiger Global in August.

The marketplace operates in 14 cities in India and three international markets including Dubai, Abu Dhabi and Australia. It claims to be doing around 6.5 lakh transactions every month.