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Urban Company to double down on instant services within an hour, CEO Abhiraj Bhal says
Urban Company plans to make “meaningful” investments over the next 2-3 years to build a dense network of professionals to provide instant services.
Urban Company Ltd. plans to double down on offering at-home services within an hour, according to its chief executive officer, reflecting the rising popularity of quick commerce across India.
“Given the frequency and relevance to the average Indian middle-class household, instant services are a category that will become very important,” CEO Abhiraj Singh Bhal told Reuters. “It could create a strong strategic moat (sustainable competitive advantage) around our core business and a strong engagement driver.”
The company plans to make “meaningful” investments over the next 2-3 years to build a dense network of service professionals in its core markets, enabling it to offer instant services. This strategy could put pressure on profit margins, Bhal said, without providing specific details.
“I think it's going to take some labour along with some capital to really build the business before it breaks even,” he said, noting that instant services help customers get assistance faster and benefit service professionals who have time between scheduled gigs.
Urban Company has traditionally allowed customers to schedule services, from facials to faucet repairs, for a later time. Its new emphasis on rapid service delivery complements this model.
The company recently launched its ‘Insta Help’ service, allowing users to book domestic workers within 15 minutes.
As of June 30, Urban Company had 7.02 million annual transacting customers, according to its offer document. Its online on-demand services market is projected to grow at a compound annual growth rate of 22.4% from 2023 to 2030, according to Grand View Research.
Urban Company IPO & Share Price
On 17 September, Urban Company listed at a premium of nearly 60% and its share price gained as much as 73.78% after its IPO become the most sought-after in India so far this year. The stock finally settled at ₹169.00, 64.08% higher than its IPO price, ascribing the company a market capitalisation of $3 billion ( ₹26,700 crore) on listing day itself.
The investor enthusiasm reflects Urban Company's dominance of India’s largely unorganised home-services sector, where it faces limited competition from smaller regional and offline providers.
“Investor excitement stems from viewing this as a structural long-term play on digital adoption and a proxy for the rising demand in home services,” said Aishvarya Dadheech, founder of Fident Asset Management, told Reuters.
The surge in demand reflects investors’ growing interest in domestic-focused companies. The government, earlier this month, effected GST reforms that made soaps to small cars cheaper by at least 10 percentage points.
Urban Company Competition
Urban Company faces competition in the on-demand home services space from emerging startups such as Pronto and Snabbit. These rivals promise trained personnel for tasks like dishwashing, laundry and cleaning in as little as 10 minutes.
“Once they figure out the economics (of instant services), this can actually become the next big thing,” Elara Capital analyst Karan Taurani said.
The market potential for such rapid services may be limited, and managing logistics could prove challenging, especially if service professionals are unable to take on additional requests, Ashish Dhir, senior director of consumer and retail at market intelligence firm 1Lattice, told Reuters. These factors, he added, could hinder the growth of this vertical.
“For the logistics to work, for the economics to work, it's not easy, and the operations are not easy. For a big player such as Urban Company, in a way, it can work out in certain phases such as during festive seasons.”
