Urban Company is doubling down on its instant household-help business, InstaHelp, with a proposed capital raise of up to Rs 2,500 crore as it looks to strengthen its position in a fiercely competitive market.
The move comes even as the home services platform reported a sharp rise in revenue for the September quarter, with investments in InstaHelp continuing to weigh on its overall profitability.
In its earnings release, Urban Company said its consolidated revenue from operations rose 41% year-on-year to Rs 537 crore in Q2FY27. Net Transaction Value (NTV), which measures the value of transactions conducted on its platform, increased 39% to Rs 1,432 crore. Orders delivered more than doubled to 15.1 million, while annual transacting users rose 35% to nearly 10 million.
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However, the company’s adjusted EBITDA loss stood at Rs 144 crore for the quarter, reflecting its investment in InstaHelp. Urban Company said it spent Rs 174 crore on the business during the period.
The proposed fundraise, which is subject to shareholder approval, is aimed at giving the company greater financial flexibility to invest across its businesses, strengthen InstaHelp’s market position and selectively pursue acquisitions, according to the company.
InstaHelp is emerging as a key growth driver for Urban Company, but scaling the business comes at a cost. The service fulfilled 6.2 million orders during the quarter, up 63% sequentially, while its NTV increased 34% quarter-on-quarter to Rs 71 crore.
The company acknowledged competitive pressure and introductory pricing for new users, which pulled its net order value down to Rs 114 from Rs 138. However, its adjusted EBITDA loss per order improved to Rs 279 from Rs 346 in the previous quarter, which Urban Company attributed to greater network density.
The segment is competing in a crowded instant household-help market, where players such as Snabbit and Pronto are also looking to capture demand for on-demand domestic services.
Urban Company’s established businesses continued to show improving operating performance. Excluding InstaHelp, adjusted EBITDA rose 213% year-on-year to Rs 30 crore. The company said its core business generated Rs 119 crore in adjusted EBITDA over the past three quarters.
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India Consumer Services, excluding InstaHelp, recorded an adjusted EBITDA margin of 3.5% of NTV, up 110 basis points from a year earlier. Its international business also expanded margins by 190 basis points to 2% of NTV, while Native, the home-products business, narrowed its loss margin by 220 basis points.
The company also received in-principle board approval to explore residential air conditioners as a new category under Native.
Urban Company ended the quarter with Rs 1,901 crore in cash and treasury investments. It reiterated its target of achieving adjusted EBITDA breakeven by Q3FY28 and adjusted EBITDA of Rs 1,000 crore by FY31.
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