Urban Company swings to profit ahead of IPO, trims issue size amid market recalibration

Mumbai: Home services marketplace Urban Company swung to a consolidated net profit of ₹239.8 crore in FY25, reversing a loss of ₹92.7 crore in the previous fiscal, as the Gurugram-based firm gears up for its public listing. The turnaround was driven by improved operating performance, strong revenue growth, and a one-time deferred tax credit.

A significant portion of the profit came from the recognition of deferred tax assets worth ₹211 crore, which sharply boosted the bottom line. Excluding this, profit before tax stood at ₹28.6 crore. The company also turned adjusted Ebitda positive at ₹11.1 crore, recovering from a loss of ₹119 crore in FY24—a sign of improving operational efficiency, though margins remain slim.

Revenue from operations rose 38.2% year-on-year to ₹1,144.5 crore in FY25, fuelled by steady growth across both domestic and international markets, and scale-up of newer verticals.

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In India, its core consumer services segment generated ₹881.4 crore in revenue, up 24.2% year-on-year. Net Transaction Value (NTV) for the India business reached ₹2,667.2 crore, with 82% of transactions driven by repeat customers, a signal of strong customer retention.

The platform had an average of 45,619 monthly transacting service professionals in India, who earned an average monthly income of ₹26,407 after costs. Top-tier professionals reportedly made up to ₹49,000 per month.

While the FY25 and FY24 reports do not provide direct year-on-year comparisons, Urban Company’s H2 CY2023 Earnings Index stated that service partners delivering over 30 services a month earned an average of ₹33,469 net of all costs, with the top 20% earning ₹42,792 monthly.

The hardware division, Native — offering products such as smart locks and RO water purifiers — continued its sharp expansion. Hardware revenue rose nearly fourfold to ₹116 crore in FY25 from ₹28.7 crore in FY24. Launched in FY23, this segment has emerged as as a key growth driver and remains a crucial diversification strategy.

International operations, spanning the United Arab Emirates (UAE) and Singapore, delivered revenue growth of 63.9% year-on-year to ₹147 crore. The UAE arm turned Ebitda positive with a ₹1.7 crore profit, though the broader international business still posted an Ebitda loss of ₹36.8 crore. Urban Company exited its step-down subsidiary in Saudi Arabia, citing financial unsustainability, according to its Draft Red Herring Prospectus (DRHP).

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Over the past year, Urban Company has recalibrated its international approach, shifting from building standalone operations to exploring partnerships and joint ventures. It has previously exited the US and Australia, while actively restructuring its presence in existing overseas markets. 

High operating costs, talent shortages, and local regulatory challenges, such as stringent labour laws and fragmented demand, have weighed on its expansion efforts.

The financial disclosures come as Urban Company prepares for its initial public offering (IPO). The company has trimmed its fresh capital raise to ₹528 crore, down from an earlier plan of roughly ₹3,000 crore, with the board citing current market conditions. This also marks a revision from its April DRHP, which proposed a ₹1,900 crore issue with ₹429 crore as primary capital. 

Urban Company has raised over $500 million across multiple rounds, including a $255 million Series F fundraise in June 2021 led by Prosus, Dragoneer, and Wellington, with participation from Tiger Global, Vy Capital, and Steadview.

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In pre-IPO secondary transactions, co-founders and early investors (including Prosus, Accel, Bessemer, Tiger Global, Vy Capital, Elevation, and Steadview) sold shares worth ₹1,395 crore to create liquidity ahead of listing. Titan Capital (Snapdeal founders Kunal Bahl & Rohit Bansal) fully exited its stake with an estimated 200x return. 

Several early investors, including Accel, Steadview, Bessemer, and Tiger Global, are also expected to pare down holdings via the IPO’s offer-for-sale component.