UrbanClap is the name synonymous with “your go-to home salon”. Within a year, the startup’s operations expanded grew tremendously that it reached almost all of the households in Delhi. Now, what we know as Urban Company, is trying to accommodate and bring other inevitable services at the consumer’s doorsteps too. This company has revamped its operations not once but twice, adapting to the ever-changing environment and demands in the market.
Urban Company (formerly known as UrbanClap) was launched in Delhi in November 2014 with a handful of service professionals. Over the past 5 years, it has expanded to 4 countries (India, Australia, Singapore, and the UAE), built a fleet of 25,000+ trained professionals, and served over 5 million households.
It was established a year before its actual launch with three co-founders- Abhiraj Bhal, Varun KHitan, and Raghav Chandra. In 2013, Abhiraj Bhal and Varun Khaitan left their jobs at the Boston Consulting Group in the United States and returned to India to launch their own venture. Raghav Chandra, who earlier worked at Twitter, Inc., also returned to India around the same time to pursue entrepreneurship. The three got together and invested INR 10 lakh each to launch UrbanClap, a hyperlocal home service platform.
At first, it began as a stage that was lead-generation model, but over time Urban Company adopted a full-stack model that onboards gig workers offering them financial assistance, skills training, access to branded tools and products, and a ready-to-serve market. The full-stack model helped the company maintain quality standards irrespective of the partner delivering the service, thereby building consumer love and loyalty.
In a short period of time, the three founders raised a good amount of funds from different ventures and by 2015, the startup had raised more than a million dollars.
IITians placed at BCG, Bhal and Khaitan often talked about starting their own business, but none of them had a clue that what they would be doing. After working for two years in BCG, they had figured out they want to start an ‘enduring business’. Both were ready to take the plunge. So in 2013, they left the job and came back to India to start their business.
Bollywood and movies being the biggest interest in India, Bhal and Khaitan launched their first startup named Cinemabox. The company made entertainment devices for public transport like buses, trains and planes. They invested about INR 10 Lakh in the startup on their own.
On the other hand, Chandra received an engineering degree in Computer Science from the University of California, Berkeley. After completing college, he worked for some major companies like Infosys, Yelp, and Twitter. Chandra had a similar dream as Bhal and Khaitan, so he also came back to India, in 2013. Here he started an online-autorickshaw booking platform Buggy.in.
But both the startups could not do well and were shut. Despite the failure, the three budding entrepreneurs were not in the mood to quit and were still looking forward to establishing a successful startup.
Most of the times, the better startup ideas are the result of the necessities one faces in real life. That’s what happened with them. At the wedding of Khaitan’s sister, Khaitan faced a lot of problems in hiring people and local vendors for various tasks. This hit the pinpoint, Khaitan and Bhal were certain that creating a platform, where people could find service providers at a reasonable cost will be their next startup idea.
The two now needed a tech guy, and eventually, got to meet Chandra through their common friends. The three of them discussed the idea, and after, contributing INR 10 lakh each, they started UrbanClap in October 2014.
They met with professionals from the different fields and shared their idea with them, such that to make them register to UrbanClap. Upon meeting those professionals, the three co-founders got to know that these service providers also faced various problems with their customers and payments.
What was UrbanClap all about?
The UrbanClap app helped the customers book a particular service through the app, the professional go to their home and complete the task. The customers make the payments for the service through the app. The company deducts 20 percent of the payment and the rest goes to the service provider. This way, many of the registered service providers even make a lakh a month.
The idea was to redefine how local services and servicemen were being hired in India. The founders saw an opportunity in the broken system of how the country connected with various service providers. To search for an electrician or a plumber, people had to ask friends and neighbors or flip through yellow pages. The company began with a vision of going beyond being a mere search and discovery platform by building a business model that encompasses onboarding service providers, training them, managing quality control while at the same time giving users the assurance of standardized services and prices on a platform where they could make payments and write reviews.
At the time when UrbanClap began its journey, hyperlocal firms such LocalOye and Timesaverz were already operational. Timesaverz had raised an undisclosed amount in seed funding in 2014. Other companies such as Housejoy, Zimmber, Taskbob, Spini, and BookMeIn were also launched during 2014. These companies are among the top 10 funded hyperlocal services start-ups. But, UrbanClap grew fast and soon caught the eye of investors. Within six months of building the product, it received a seed funding commitment in January 2015
Changing the Business Model
A year after launch, Abhiraj and his co-founders noticed that the quality of the services they were providing was not up to the mark. Urban Clap’s “light-touch” model, where the company didn’t insert itself in every aspect of the customer service, was clearly not working out.
What started as a lead-gen model was then turned into a full-stack, which was a difficult but rewarding decision. The realization that customers wanted the whole deal from confirmed fulfillment, price transparency, genuine products, service SOPs and more, made us pivot to full-stack.
The startup then started to focus on one category to understand what it would mean to own the service delivery experience. They chose beauty, which offered an interesting challenge. The company developed close integration with the supply ecosystem, which runs on various levels. UrbanClap condensed its service delivery experience into five levels, to make it straightforward for customers and professionals. It, to date, controls the products that their professionals use. It has also revamped its payments process to make it more flexible for customers and professionals to pay and collect money. The company has also set up a content sharing platform to allow customers to share reviews and rate service professionals easily.
In FY19, the Urban company claimed to have completed around 3.3 million service orders, a sharp rise from around 1.2 million service orders in FY18. Gross transaction value (GTV) of all orders in the last financial year jumped to ₹400 crores from a GTV of ₹130 crores in FY18. GTV represents the aggregate spends of a company’s customers in a particular financial period, according to a Mint report.
Why was a successfully running start-up RE-BRANDED?
Urban Company, a simple name with universal appeal, repositioning UrbanClap into seven key verticals and geographies, expanding its global footprint to Australia and Singapore. With the new UMBRELLA brand, it took a step closer towards this vision to offer multiple types of services at home:
- Urban Beauty: Salon and makeup services for women at home
- Urban Spa: Massage therapy for men and women at home
- Urban Grooming: Haircut and grooming services for men and kids at home
- Urban Repairs: Electricians, plumbers, carpenters, AC and appliance repair
- Urban Cleaning: Regular and deep home cleaning solutions
- Urban Painting: Professional home painting services
- Other services, such as fitness and yoga at home and pest control
It aims to onboard over 20,000 professionals on its platform this year to meet the strong growth in demand for various services post the lockdown. Currently, the company has more than 40,000 gig workers on its platform, of which over 35,000 are present in India. Of the total base of gig workers on the platform in India, more than one-third are women working as beauticians and massage therapists.