UrbanClap has disrupted the model by taking out the middleman: Abhiraj Bhal
Mumbai: UrbanClap Technologies India Pvt. Ltd, which runs home services platform Urbanclap.com, has 50,000 professionals registered with it including electricians, beauticians, plumbers, yoga trainers, wedding planners and photographers. Another 150,000 have signed up and are waiting to be vetted to begin providing their services on the platform.
Only about a third of them are likely to make the cut, says Abhiraj Bhal, an alumnus of the Indian Institute of Technology, Kanpur and Indian Institute of Management, Ahmedabad who set up UrbanClap in 2014 after a three-year stint with the Boston Consulting Group.
In a phone interview, Bhal talks about how the platform differs from listing services that work with aggregators because it enables professionals to cut out the middleman and see their income grow multifold. Edited excerpts:
How is UrbanClap different from listing services such as Justdial, Sulekha and Yellow Pages that provide carpenters, plumbers and electricians when you call them or search their online directories?
In the traditional directories, it was the same set of people that were registered on multiple platforms as there was a fee to be paid for listing. They had the resources to do so. In turn they were aggregators that had a list of handymen with them to whom they would then pass on the job for a commission. Many times, such aggregators would pay the professional just a nominal amount, keeping the larger fee for themselves. We have disrupted that model by cutting out the middlemen and enabling these people with the skill set to register directly with us. This allows the technicians to keep a majority of what they earn for themselves and they just pay us anywhere between 5% and 25% commission, depending on which of our services they avail.
What is the guarantee that a person quitting his job will be able to sustain his lifestyle and find independent jobs?
About 10,000 people were working full-time somewhere and are now independent entrepreneurs on our platform. Their income has gone up at least two-three times. In some cases, like say a beautician who was working in a salon and earning Rs12,000 a month servicing seven-eight people a day, she probably could make that amount now in one day. We have beauticians making Rs60,000-80,000 a month with us. For an independent guy, getting customers earlier was very hard. Therefore, they would prefer to work and get a salary. Today, the salon model is getting disrupted. Your home can be the salon and we are seeing the demand for this service is rapidly growing.
There are over 100 companies in this segment. How do you plan to sustain and expand your operations?
We have so far raised Rs250 crore, in three rounds of funding. The last round was in November 2015. We have enough capital to last us for the next two-and-a-half years. Also we are in the business of service, which involves no inventory. Unlike classic e-commerce, there is no discounting in our model. We do some degree of advertising and are unit positive from the go.
What are your expansion plans?
We are present in eight cities and plan to go deeper in the cities that we are in. We have a business development team of 70-80 people that have to vet the 150,000 profiles in our database before we take them on board. Only 40,000-50,000 of these will make the cut as we have a stringent process of 14 days before we take a person live.
Which are your largest segments? What is working online?
We have about 50,000 service professionals of which 30% are beauticians. Of the remaining, including home building and improvement, health, yoga, fitness and dieticians are about 50%, events like wedding and birthday parties is 15%, and personal and business services is the remaining.
These professionals may not be tech-savvy. They may not have broadband or a smartphone. How do you work with them?
Most of the people who are registering with us to list their skills have heard of us through someone they know. We don’t spend money on enlisting them. However, once they have been selected for their skills, we set them up with a smartphone, data plan, tools and everything one needs to do business on UrbanClap, which includes invoicing, payment, collections and customer relationship management. We have training programmes for that. We also support them with bank accounts as most of them were unbanked earlier.
Who is the UrbanClap customer?
They are young working moms, women who don’t have the time to go to the salon or are new to the city and don’t know the neighbourhood well and are looking for professionals. They are in their 30s, maybe 40s. Often, bachelors who are 25-30 years old also try us.