This App Is 'Everything' One Needs To Run A Household
Urban Company is building a fulfillment-led services platform to reimagine and organize the key verticals of this industry. At scale, this platform will empower every household to live easier lives, enable multiple billions of dollars in commerce annually and create jobs for over 1 million service professionals
The on-demand economy has come a long way since its early days in 2007. Not only is it swiftly proliferating, but also expanding into various domains like video-streaming, food delivery, and cab booking at an explosive rate. As per Harvard Business Reports, the current on-demand economy attracts 22.4 million consumers per year on an average, with their total expenditure being $57.6 billion.
Considering the current scenario where unemployment rates have increased alarmingly due to the pandemic and working professionals are eagerly looking for a job, there’s one particular business vertical in the on-demand economy where you can expect immense growth. That vertical is on-demand home services.
Due to the busy occupied schedules of the working class and preference for a simple lifestyle, consumers are psychologically attracted to the instant gratification that on-demand home services offer. Consumers can order any service of their choice from a home services marketplace and get the work done within a relatively short period of time.
Consumers are increasingly turning to the internet when looking to buy both products and services, including things that are traditionally reliant on the phone or in-person interactions. The on-demand home services market is no different: customers want to be able to book cleaning and other services online, and they want an easy way to compare prices and ensure the credibility of those they hire. This has given rise to many online services and marketplaces to help fill this need, from organizations that employ all their workers directly and keep everything in-house, to those that act as an intermediary to connect contractors with customers.
The global online on-demand home services market is in a period of accelerating growth, with a predicted CAGR of over 50 per cent between 2020 and 2024. More than a third of this growth will come from APAC, which was the largest market for these services in 2019, with an increasing number of smartphone users looking for home services apps and platforms and many start-ups entering the market. These companies are also adapting to the changes and challenges introduced by COVID-19, introducing extra precautions for their workers, alterations to or suspensions of some of their offerings, and new services such as contactless pickups and deliveries. Here are some of the companies currently leading the global market for online on-demand home services.
Urban Company was launched to create a completely new category in 2014, has now become the largest home service provider in India.
It most recently bagged Series F funding of $255 million at a valuation of $2.1 billion, in a round led by Prosus Ventures, Dragoneer, and Wellington Management, with participation from Vy Capital, Tiger Global, and Steadview. The capital infusion took Urban Company into the coveted unicorn club as it was last valued at around $933 million during its funding round in 2019 and has earned the unicorn status this year.
The new financing round — a Series F — was led by Prosus Ventures, Dragoneer, and Wellington Management, while Vy Capital, Tiger Global, and Steadview participated in it.
The Gurugram-headquartered startup said the new round features a primary capital infusion of $188 million while the rest is a secondary sale by some angel and other early investors. The startup has raised about $470 million to date.
Formerly known as UrbanClap, the seven-year-old startup offers a range of home services on its platform. Does your AC need maintenance work? Is the TV not working? Does the house need a fresh coat of paint? Plumbing issues? Need your toilet cleaned and disinfected? How about a haircut done at a place of your choosing?
These are just some of the services Urban Company offers to its customers, who can place an order using the startup’s app or the website and pick a good time and venue.
The idea of the startup came from its three co-founders, who in their early 20s were puzzled why nobody else was trying to take a stab at the industry, which remains largely unorganized, said Raghav Chandra, co-founder, and chief technology officer, Urban Company, in an interview with Entrepreneur India.
What started as an idea is now a unicorn. The startup today operates in 35 cities in India, Singapore, Australia, the UAE, and the Kingdom of Saudi Arabia. More than 35,000 service partners are active on the platform, said Chandra, who serves as Urban Company’s chief technology officer.
Chandra shared the startup began seeing recovery last year after the nation started to open up again and had its best month to date in March this year.
He commented the startup will deploy the fresh capital to further expand in the markets where it operates and work on ways to supercharge onboarding, training, and safety of service workers on the platform. It is also looking to expand its technology team. The startup plans to file for an IPO within the next 24 months, it said.
Urban Company spends weeks on training and upskilling the workers that join its platform, stated Chandra. The startup today also enables workers with expertise in one category to learn about other categories, hence increasing their odds of getting more work and earning more. Chandra said offering upskilling courses to the workers will remain one of the key areas as the startup expands.
Home services is a large, unorganized industry in India. Indian consumers spend $30 billion annually on home services. They largely rely on word of mouth and friends-family recommendations for search and discovery. There is no large, well-run, billion-dollar company in this category today. The industry lacks scale benefits - standardization, transparency, and trust.
In the absence of organized players, the current market architecture is froth with middlemen and aggregators, who control market access and keep a lion’s share of the margins. As a result, experiences are broken for both customers and end service professionals. The industry could easily be two-timed larger than it is today if frictions in transaction journeys are removed – and experiences made more meaningful and memorable.
Chandra elaborated that Urban Company is building a fulfillment-led services platform to reimagine and organize the key verticals of this industry. At scale, this platform will empower every household to live easier lives, enable multiple billions of dollars in commerce annually and create jobs for over 1 million service professionals.
Chandra believes, “Urban Company has been creating a new paradigm for the experience of home services in India. During the pandemic, when trust and safety became the most important parameter for bringing a service professional at home, millions of Indians trusted our service professionals to deliver services at their homes. We worked towards reimagining the way our services were being delivered. To ensure the well-being of our service professionals and customers, we invested in PPE kits, training, and putting health protocols in place. Today, Urban Company services over a million homes per month. Further, our solutions enable over 35,000 service professionals across the world to enhance their income by providing customer access, financing, and insurance, tech-led standardization along with training, and certification. Our goal here is to empower millions of professionals worldwide to deliver services at home like never experienced before.”
“We are only 1 per cent done. We have a whole industry to define globally. Over the coming few years, we want to expand by going deeper into tier-II cities in India and take a few more international bets. We will be innovating on our customer offerings by widening our selection, perfecting the quality, and training our professionals to a service standard unparalleled and plan to onboard over 20,000 service professionals in 2021,” he further shared.