Gurugram-based home services giant set to raise ₹429 crore in fresh equity as investors like Accel and Tiger Global partially exit
| April 29, 2025
Urban Company Ltd., India’s largest tech-enabled home services marketplace, has officially filed its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) for an Initial Public Offering (IPO) worth ₹1,900 crore. This highly anticipated move signals a new chapter for the Gurugram-based startup, which has emerged as a market leader in the consumer services space since its founding in 2014.
IPO Structure: Mix of Fresh Equity and Investor Exit
According to the draft filing, the IPO will include a fresh issue of ₹429 crore and an Offer for Sale (OFS) component of ₹1,471 crore by existing investors. The company may also conduct a pre-IPO placement of up to ₹86 crore, potentially reducing the fresh issue size.
The scaled-down fresh issue—compared to the earlier board-approved ₹528 crore—suggests Urban Company’s financial strength and operational maturity, allowing it to raise growth capital with minimal equity dilution.
Key Investors Eye Partial Exit
The OFS will see participation from several top-tier venture capital firms, including:
- Accel India: ₹433 crore (10.5% stake)
- Elevation Capital: ₹346 crore (10.8% stake)
- Bessemer India: ₹173 crore (6.5% stake)
- Internet Fund V (Tiger Global): ₹303 crore (4.7% stake)
- Vy Capital: ₹216 crore (9.2% stake)
These investors, who have backed Urban Company through its growth phases, are now capitalizing on the firm’s move to public markets—an indicator of their confidence in the company’s readiness and potential for sustainable growth.
Utilization of IPO Proceeds: Tech, Marketing, and Infrastructure
Urban Company has earmarked the fresh capital for the following purposes:
- Technology and Cloud Infrastructure: Enhancing its AI-powered logistics, routing, and personalization capabilities.
- Office Lease Payments: Covering lease obligations across key operational centers.
- Brand Building and Marketing: Deepening customer trust and visibility across existing and new markets.
- General Corporate Purposes: Including working capital and other operational flexibility.
This diversified use of funds reflects the company’s strategic focus on scalability, efficiency, and long-term value creation.
A Scalable Platform in a Fragmented Market
Founded in 2014 by Abhiraj Bhal, Varun Khaitan, and Raghav Chandra, Urban Company has grown into a household name, providing services such as beauty treatments at home, appliance repair, plumbing, and cleaning. The company operates on an asset-light, tech-heavy model, enabling consistent service quality across 50+ cities in India and a few international markets.
According to its latest investor presentation, Urban Company boasts over 50,000 trained service professionals and completed over 12 million service orders in FY24, underlining its significant footprint in India’s unorganized home services sector.
IPO Led by Global Investment Banks
The IPO is being managed by an experienced consortium of investment bankers:
- Kotak Mahindra Capital
- Morgan Stanley India
- Goldman Sachs India
- JM Financial
Their involvement not only signals strong institutional interest but also ensures smooth navigation through both domestic and international capital markets.
Implications for India’s Startup Ecosystem
Urban Company’s public listing follows in the footsteps of Mamaearth and comes ahead of anticipated IPOs from Swiggy and Zepto, cementing its position as a bellwether for India’s consumer tech startups.
This trend reflects increasing investor appetite for tech-enabled businesses with proven revenue models, strong operational infrastructure, and market differentiation.
According to a 2024 Bain & Company report, India’s consumer tech market is poised to grow to $150 billion by 2030, driven by rising digital adoption, urban demand, and preference for convenience-based services (Source).
Conclusion: A Defining Moment for Urban Company and India’s Digital Economy
Urban Company’s ₹1,900 crore IPO is more than just a fundraising event—it marks a transformative moment for India’s digital services landscape. With a robust business model, investor confidence, and clear growth strategy, the company is well-positioned to leverage public market capital to further solidify its leadership in the home services segment.
As India continues to embrace digitization and formalization of essential services, Urban Company’s journey to the stock market is expected to set a precedent for other high-growth, tech-led startups seeking public market validation.
Last Updated on: Tuesday, April 29, 2025 7:04 pm by Nikitha Reddy | Published by: Nikitha Reddy on April 29, 2025 7:04 pm | News Categories: GENERAL, News, TECHNOLOGY, TRENDING
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