IPO-bound consumer services unicorn Urban Company has begun winding down its step-down subsidiary in Saudi Arabia as it failed to achieve profitability, as per its draft red herring prospectus (DRHP).
The consumer services startup said it has started transferring its Saudi operations to a joint venture launched in 2024, with an intent to eventually wind down the step-down subsidiary, Urban Company Arabia for Information Technology.
Incorporated in 2021, Urban Company Arabia saw its loss before tax widen 182% to INR 23.4 Cr in the nine months ended December 31, 2024 (9M FY25) from INR 8.3 Cr in the year-ago period.
Its loss before tax for FY24 stood at INR 14.1 Cr, for FY23 at INR 17.7 Cr, and for FY22 at INR 10.1 Cr.
The startup, through Urban Home Experts, held a 100% indirect stake in Urban Company Arabia, which provides an online marketplace, allowing customers registered on its platform to search and hire service professionals for their household and business needs.
“The Group has started operations through its joint venture entity, Waed Khadmat Al-Munzal For Marketing, located in the Kingdom of Saudi Arabia, with effect from January 1, 2025, with an intent to eventually close down step-down subsidiary, Urban Company Arabia for Information Technology,” the DRHP read.
Urban Company further stated that it experienced service professional shortages in its overseas markets such as the UAE, Saudi Arabia and Singapore in 9M FY25, FY24, FY23 and FY22 and may continue to see supply shortages in the future.
While the supply shortage has not had any adverse effect on its business operations yet, “there is no assurance that we will not face any supply shortages, or we will be able to find alternatives, which could have a material adverse effect on our business, results of operations and financial condition”, it said.
Get Set Go: Urban Company Joins The Race For Public ListingFounded in 2014 by Abhiraj Singh Bhal, Varun Khaitan and Raghav Chandra, Urban Company provides a tech-enabled, full-stack online marketplace platform that enables users to hire professionals for household services.
Last month, it to raise INR 1,900 Cr through an initial public offering (IPO). The IPO will comprise a fresh issue of shares worth INR 429 Cr and an offer-for-sale component of INR 1,471 Cr.
Existing investor Accel India will be selling Urban Company shares worth INR 433 Cr in the OFS, while Bessemer India Capital Holdings II Ltd will offload shares amounting to INR 173 Cr. Other investors participating in the OFS include Elevation Capital and VY Capital.
Ahead of the IPO, between September 2024 and February 2025. They will not be participating in the OFS round.
On the financial front, the consumer services unicorn in 9M FY25, swinging from a loss of INR 57.8 Cr in the year-ago period. Operating revenue jumped 41% to INR 846 Cr during the period under review from INR 600.9 Cr in 9M FY24.
With this, Urban Company has joined several other new-age tech companies that have outlined plans for mega IPOs. Startups such as Smartworks, and have also filed draft IPO papers with SEBI. Last month, the markets regulator gave its go ahead to IPOs of BlueStone and Aye Finance.
Overall, more than 20 new-age tech companies are in 2025. These include companies like ArisInfra, Cars24, Ola Consumer, Rebel Foods, Captain Fresh, Zappfresh, among others.
The likes of PhonePe, Groww, , , BRND.ME (formerly Mensa Brands), Lenskart, and Meesho are also preparing for their imminent public listings.
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