SOURCE : NEW18 NEWS
Last Updated:April 29, 2025, 16:16 IST
Urban Company, formerly Urban Clap, filed for a Rs 1,900 crore IPO with SEBI. Funds will go to platform innovation, tech upgrades, marketing, and office expansion
Urban Company has shown steady revenue growth in recent years, with earnings rising from Rs 437.6 crore in FY22 to Rs 828 crore in FY24.
Urban Company, formerly known as Urban Clap, is gearing up for its Initial Public Offering (IPO). The home furnishing company has submitted its Draft Red Herring Prospectus (DRHP) to the Securities and Exchange Board of India (SEBI) for an IPO worth Rs 1,900 crore. This includes raising fresh capital of Rs 429 crore, while early investors are expected to gain Rs 1,471 crore.
According to Moneycontrol, prominent investors such as Excel India, Bessemer India, Elevation Capital, Tiger Global, and VY Capital stand to benefit significantly by selling their shares.
related stories
Excel, an early supporter, will enjoy returns 16.7 times greater than Tiger Global, whereas Elevation Capital will see 11 times more profit than Tiger Global. These returns vary because the investors purchased shares at different prices. For instance, Excel acquired shares for Rs 3.61 each, while Tiger Global paid Rs 60.25 per share.
Urban Company aims to utilise the raised capital for platform innovation, technology upgrades, marketing, and office expansion. Specifically, Rs 190 crore will go towards AI-based tools and cloud infrastructure to enhance user and service provider experiences. An additional Rs 70 crore will be spent on opening new offices domestically and internationally, and Rs 80 crore will be allocated to digital, OTT, and outdoor marketing. The remaining funds will address corporate needs and working capital.
The company has shown steady revenue growth in recent years, with earnings rising from Rs 437.6 crore in FY22 to Rs 828 crore in FY24.
It also moved from a net loss to a profit of Rs 242.3 crore in the first nine months of 2024, though this includes a deferred tax credit of Rs 215 crore. Excluding this credit, the profit would appear smaller. Urban Company’s Gross Merchandise Value (GMV) increased to Rs 2,564 crore in FY24, a 70% rise from FY22.
The number of annual customers has reached 5.8 million, and active service providers now number 46,000.
Despite these gains, the DRHP has warned of potential challenges ahead. The company’s future profits are not guaranteed, and issues such as reliance on gig workers, quality control, and regulatory hurdles in new markets pose significant risks. Additionally, the dilution of shares due to Employee Stock Options (ESOP) is a concern.
