ETtechAt-home services provider Urban Company plans to list on Indian stock exchanges and raise Rs 1,900 crore. Proceeds from the maiden offer will go into developing new technology, building cloud infrastructure, leasing offices, and marketing purposes, according to the draft papers filed with the markets regulator.
The Urban Company initial public offering (IPO) consists of a fresh issue of shares worth Rs 429 crore and offer for sale by existing shareholders of Rs 1,471 crore, the draft red herring prospectus (DRHP) shows. Accel, Tiger Global, Elevation Capital, Vy Capital and Bessemer Venture Partners are selling their stake in the IPO and will receive the OFS proceeds. Urban Company will utilise the net proceeds from the fresh issue for various purposes.
Of the Rs 429 crore from fresh issue, Urban Company has will spend:
These funds will be deployed between fiscals 2026 and 2028, Urban Company mentioned in the DRHP.
Deep dive
For technology development, Urban Company will spend Rs 130 crore over the three fiscals to develop multi-category checkout, better recommendation systems for home improvement and decor solutions, and enhance products under its Native business with Internet of Things (IoT) capabilities.
Most of the technology spend will be towards engineers' salaries. Another Rs 60 crore will be on cloud services, based on the annual payment commitments.
IPO details and financials
Founders Abhiraj Singh Bhal, Raghav Chandra and Varun Khaitan will not sell stake in the book-built offer. They had sold shares worth nearly Rs 780 crore through secondary transactions in the run-up to the issue.
In the OFS, Accel will sell a block of shares worth Rs 433 crore, while Elevation Capital is looking to offload stakes worth Rs 346 crore. Tiger Global and Vy Capital are selling a stake worth Rs 303 crore and Rs 216 crore, respectively. Bessemer will sell shares worth Rs 173 crore.
In the first nine months of FY25, Urban Company clocked operating revenue of Rs 846 crore, marking a 41% year-on-year growth. The Gurgaon-based company also turned profitable in this period, posting a net profit of Rs 242 crore, against a loss of Rs 58 crore in April-December 2023.
Urban Company reported 6.51 million annual transacting customers and 48,169 average monthly active service professionals during the period.
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Of the Rs 429 crore from fresh issue, Urban Company has will spend:
- Rs 190 crore for new technology development and cloud infrastructure;
- Rs 70 crore on office leases;
- Rs 80 crore for marketing activities;
- A portion will be spent on general corporate purposes.
These funds will be deployed between fiscals 2026 and 2028, Urban Company mentioned in the DRHP.
Deep dive
For technology development, Urban Company will spend Rs 130 crore over the three fiscals to develop multi-category checkout, better recommendation systems for home improvement and decor solutions, and enhance products under its Native business with Internet of Things (IoT) capabilities.
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Most of the technology spend will be towards engineers' salaries. Another Rs 60 crore will be on cloud services, based on the annual payment commitments.
IPO details and financials
Founders Abhiraj Singh Bhal, Raghav Chandra and Varun Khaitan will not sell stake in the book-built offer. They had sold shares worth nearly Rs 780 crore through secondary transactions in the run-up to the issue.
In the OFS, Accel will sell a block of shares worth Rs 433 crore, while Elevation Capital is looking to offload stakes worth Rs 346 crore. Tiger Global and Vy Capital are selling a stake worth Rs 303 crore and Rs 216 crore, respectively. Bessemer will sell shares worth Rs 173 crore.
In the first nine months of FY25, Urban Company clocked operating revenue of Rs 846 crore, marking a 41% year-on-year growth. The Gurgaon-based company also turned profitable in this period, posting a net profit of Rs 242 crore, against a loss of Rs 58 crore in April-December 2023.
Urban Company reported 6.51 million annual transacting customers and 48,169 average monthly active service professionals during the period.
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