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Urban Company announces ESOP secondary sale worth Rs 203 Cr for 446 employees

EntrackrEntrackr · 1y ago
Urban Company announces ESOP secondary sale worth Rs 203 Cr for 446 employees
Medial

Home service marketplace Urban Company has announced its largest employee stock secondary sale worth Rs 203 crore (nearly $25 million). This is the fifth ESOPs buyback wherein 446 employees have participated, according to the company’s press statement. As per Urban Company, beneficiary employees are between 23 and 56 years old, with 28% of beneficiaries being women. This sale will give the company’s employees an opportunity to liquidate their vested stocks. Dharana Capital (an offshoot of existing investor Vy Capital), along with existing investors Vy Capital and Prosus will be purchasing these shares from former and current staff. To date, Urban Company has granted ESOPs to 1,593 employees and around 784 of them participated in five buybacks, liquidating ESOPs worth Rs 306 crore ($37 million). The Abhiraj Bhal Singh-led company did its last ESOP liquidity program in December 2021 at a valuation of $2.8 billion. The company did not disclose the valuation of the latest buyback. However, Entrackr’s sources outline that the fresh buyback is happening at a valuation of around $2.2 billion to $2.5 billion. Just ahead of the fourth buyback, Urban Company achieved unicorn status in June 2021. It hasn’t raised any external capital since then. According to the startup data intelligence platform TheKredible, Urban Company posted a revenue of Rs 637 crore in FY23 and managed to reduce its losses by 40.1% during the fiscal year. The buyback of ESOPs came a month after it turned profitable at PBT (profit before tax) level. On a consolidated basis in April, the company posted PBT of Rs 7 crore. Entrackr had exclusively reported the development earlier this month. The company also expects its operations in UAE to become profitable in the coming months. As per sources, Urban Company is preparing for a public listing which is likely to happen in the second half of next year (2025).

Urban Company concludes $63 Mn secondary led by Dharana Capital

EntrackrEntrackr · 1y ago
Urban Company concludes $63 Mn secondary led by Dharana Capital
Medial

Vy Capital’s offshoot Dharana Capital has bought $50 million worth of secondary shares from employees, early investors and founders. Significantly, this transaction is a part of a $63 million secondary round in which Prosus also participated. This transaction also includes $25 million ESOP buyback from employees in May this year, said a company’s top official to Entrcakr. Following the secondary transaction, Vamsi Duvvuri, founder and managing partner of Dharana Capital, will also join the board of Urban Company as a non-executive director, as per the fund’s press statement. Dharana Capital is an India-focused fund which has backed several startups including Zopper, Lentra, NoBroker and Itilite. To date, Urban Company has granted ESOPs to 1,593 employees and around 784 of them participated in five buybacks, liquidating shares worth Rs 306 crore ($37 million). Urban Company concluded its last ESOP liquidity program in December 2021 at a valuation of $2.8 billion. As per Entrackr’s sources, the new buyback happened at a valuation of around $2.2 billion to $2.5 billion. As per startup data intelligence platform TheKredible, Urban Company posted a revenue of Rs 637 crore in FY23 and managed to reduce its losses by 40.1% during the fiscal year. The company also turned profitable at profit before tax level in April. Importantly, it also claimed to have achieved profit at PBT level in June quarter of FY25. Urban Company currently operates in 62 cities across India, the UAE, Singapore, and The Kingdom of Saudi Arabia. The company has a partner network of over 55,000 hand-picked service professionals.

Urban Company turns profitable with Rs 7 Cr PBT in April

EntrackrEntrackr · 1y ago
Urban Company turns profitable with Rs 7 Cr PBT in April
Medial

Urban Company has turned profitable at PBT level (profit before tax) on a consolidated basis in the last month, said two sources aware of the firm’s financial numbers. The development will potentially smoothen its public listing plan which is likely to happen in the second half of next year (2025). “Urban Company’s India business has been EBITDA profitable since October-November 2022,” said one of the people cited above requesting anonymity. “But on a consolidated basis, the firm posted a little over Rs 7 crore in profit before tax (PBT) in April 2024.” As for the firm’s India unit—which is more than 90% of its business—it recorded over Rs 11 crore PBT in April. “Urban Company has also achieved breakeven in the UAE but it is incurring losses in Singapore and Saudi region as these two markets are new,” said the person mentioned above. The profitability in April indicates that Urban Company has been able to cut losses by over two-third in FY24. “The company’s losses for the last fiscal stood under Rs 100 crore,” said another person who also requested anonymity. The 10-year-old company posted a loss of Rs 308 crore against revenue of Rs 637 crore in the fiscal year ending March 2023. According to the startup data intelligence platform TheKredible, Urban Company also reduced its losses by 40.1% in FY23 as compared to FY22. Queries sent to Urban Company didn’t elicit any response. Urban Company is a home services and beauty salon marketplace with a presence across over 30 cities in India along with operations in some foreign markets. The Gurugram-based company joined the unicorn club in June 2021 with a valuation of over $2 billion but the company hasn’t raised any primary money in the past three years. In December 2021, it bought back employee stocks (ESOPs) at a valuation of $2.8 billion. While plans for an IPO are usually a red flag when a sudden improvement in financials is observed, in Urban Company’s case, the improvement has been long in coming with a series of changes the firm has been making over the years. Be it white label or own label products, service contracts to ensure predictable cash flows, focus on repeat users and better management of partner relationships, the firm has been seen to be at work. Seen as a barometer for the state of blue collar gig economy in India, the firm will continue to find itself in the cross hairs of critics in case of any misstep, but credit has to be given for a long and sustained effort to thrash out a business out of it all. The international ventures remain a question, considering the widely different conditions and laws in each market, but in India at least, the numbers will just be the icing on the cake that seems ready for a taste test in the capital markets.

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