Co-founder and CEO Abhiraj said the company could break even at any point, but most of the expenses incurred in FY19 are forward-looking in nature.Rashi Varshney
Gurugram-based home services platform UrbanClap has announced its unaudited FY19 financial results. The company has reported 150 percent increase in operating revenues at Rs 116 crore as compared to Rs 46 crore in FY18. In FY17, its operating revenues stood at Rs 11 crore.
With increasing revenues, the company has managed to keep the operating losses flat at Rs 72 crore in FY19. In previous fiscals, operating losses stood at Rs 57 crore (FY18) and Rs 67 crore (FY17).
Speaking with YourStory, Abhiraj Bhal, Co-Founder and CEO, UrbanClap said the company has managed to maintain the losses flat despite aggressive growth because it has kept the unit economics positive since day one.
When will it see profitability? Abhiraj said, the company could break even at any point, but most of the expenses incurred in FY19 are forward looking in nature.
"A lot of Rs 72 crore of our losses would actually be the investments we have made for the next financial year and a year after," he said.
In FY19, the company made investments in training, product procurement, technology and financing, people, and brand building among others. Abhiraj said the company could have easily broken-even last financial year, but "the idea is not to make a profit on a low scale, and at the same time, the idea is not to be a bleeding company either."
"The idea is to always have toe touch distance that you can maintain profitability if a push comes to shove, and that you are always ready to sort of tighten the noose a little bit at the top level," he said.
He pointed out that what most consumer tech businesses have been doing in India is they lose on unit economics and even when they scale fast on the order side, their losses increase. "For us, because the unit economics has been positive, our financials look healthy," he said.
The CEO also explained that UrbanClap has maintained a steady growth. "We are not a business which will go 10 times, but it will go three times every year."
Abhiraj told YourStory :
"UrbanClap is not looking at profitability this financial year because we want to really push the acceleration and grow at least three times. So, FY20 will be too early to turn profitable. This fiscal year, we will continue to make some losses, but the next one we should break even."
From 1.2 million service orders in FY18, the company jumped nearly three times to clock 3.3 million service orders in FY19. The gross transaction value (GTV) of all orders served by UrbanClap in FY19 stood at Rs 400 crore, three times increase from Rs 130 crore in FY18. On an average, the ticket size of the users on the platform is between Rs 1,100 to Rs 1,200, said Abhiraj.
The company said that it served over 6,20,000 service orders in the month of April 2019, which is 3x jump over the same period last year, putting it on an annualised run-rate of 7.5 million service orders. These orders represented an annualised gross transaction value of Rs 1,000 crore and an annualised revenue run-rate of Rs 200 crore for the company, it added.
UrbanClap, which also offers skin-care, hair-care, makeup, spa, and men’s grooming services, said beauty services at home continued to be the largest vertical for the company. The second largest vertical was appliance and basic home repairs. The company also made inroads in new verticals such as cleaning, pest control, painting, etc., this fiscal.
In terms of professionals on the platform, Abhiraj said the number will increase from 20,000 professionals at present to 60,000-70,000 professionals in FY20. "We are committed to growing that number to one million plus service professionals over the next five years,” he said in the statement.
The company also expanded its operations to the UAE as well as to select tier II Indian cities last fiscal. Commenting about UAE's contribution to the company's total revenues, Abhiraj said it is 'low single digit percentage' at present, and that right now the company is all powered by India.
Founded in November 2014 by Abhiraj Singh Bhal, Varun Khaitan, and Raghav Chandra, UrbanClap offers services like beauty and spa at home, cleaning, plumbing, carpentry, appliance repair, painting, etc. through its mobile app and website. It operates in 10 cities in India (including Ahmedabad, Bengaluru, Chandigarh, Chennai, Delhi NCR, Hyderabad, Jaipur, Kolkata, Mumbai, Pune) and in Dubai.
In FY 2020, the company will expand to ten more cities in India, and also to an international market. Abhiraj also told YourStory that Urbanclap will expand to Abu Dhabi, and another international market, which he said is too soon to name. He added,
"Given how things are shaping up and growing, we definitely believe this is the start for 2020, which will be our highest year-on-year growth. This fiscal year is when we will go beyond being just a tier I place. Today, we are only in 10 cities, by end of this year we will be in 20 cities in India."
Abhiraj informed that the company is estimating a growth of 150-200 percent in terms of revenues in the upcoming financial year.