Ratan Tata-backed Urban Company (UC) is hopeful of servicing 0.5 million bookings in October, a jump of about 2.5X from now, from its professional cleaning department alone, as people gear up for the festive season, a senior company executive said in an interview.
Gathering pace since 2018, UC’s cleaning service has an average ticket price of about Rs 1,200 across four categories: bathroom, sofa, kitchen and full home cleaning. Further, the company has an average take rate or earns about 15-25% from each order.
“In October alone we are expecting about 30% of the company’s business to come from our business unit. From a typical business month, around now, to October, we’re expecting a jump of about 2.5X. That means this Diwali we will witness a 3X growth year-on-year (y-o-y) after very muted two years,” said Arushi Arora, vice president, professional cleaning of Urban Company.
The company also plans to increase its partner base to 10,000 by October from the current 8,000, which has already doubled over the past year or so. It aims to have 500,000 partners by 2030. Over the past years, Arora claims her wing has been able to reduce its prices by about 40% just by moving to an individual model from an aggregator model, where it would collaborate with various business owners, which she said was very capital-intensive.
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So far, Arora’s department has serviced about 2.5 million users, out of which a million came in the last 12 months alone. UC had closed calendar year (CY) 21 with 11.5 million orders, as reported earlier.
Further, UC even earns marginally from supplying chemicals, scrubbing machines and other tools. It has financing options for partners to buy equipment and also provides personal loans of up to Rs 15,000 for its select partners, a loan UC takes on its books. In total, about 10% of the department’s total revenue comes from the aforementioned categories.
On a company level, UC’s top three categories in terms of revenue are beauty and salon services at home, professional cleaning services and appliance repair category. Each division generates about 20-30% of the revenue for the company. UC had reported a 13.8% increase in its revenue from operations to Rs 239 crore y-o-y while its net losses widened 51% to Rs 207 in FY21. Going forward, the company is however expected to face competition from Flipkart’s Jeeves — the company’s services arm which began AC repair services in April and is expected to expand offerings to other electronic items, to begin with.
UC was founded in 2015 by Abhiraj Bhal, Raghav Chandra and Varun Khaitan and has raised over $470 million so far from Tiger Global, Accel, Prosus Ventures, Zomato’s Deepinder Goyal, OYO’s Ritesh Agarwal, and others who have valued the Gurugram-based company at over $2.6 billion.