Urban Company Secures Largest ESOP Liquidity as Dharana Capital Invests $50 Million in Home Services Startup

Bengaluru: India-focused investment firm Dharana Capital has bought shares worth ₹400 crore ($50 million) in Urban Company from the home-services marketplace’s employees and other shareholders. This is the largest employee stock option sale in Urban Company’s history, the company announced.

Vamsi Duvvuri, founder and managing partner of Dharana Capital, praised Urban Company’s strong and efficient business model in the challenging local services market. Duvvuri will join Urban Company’s board as a non-executive director. Dharana Capital, which invests in technology and consumer-focused companies, has also backed Zopper (an insurance platform), Lentra (a lending platform), and NoBroker (a real-estate services company offering salon, carpentry, and AC repair services similar to Urban Company’s).

Urban Company did not reveal the deal’s valuation, but secondary transactions typically occur at a discount to primary share values. In secondary transactions, shareholders sell their stakes to other investors without new capital being added to the company.

Urban Company was valued at $2.1 billion when it raised $255 million in June 2021, entering the unicorn club (startups worth at least $1 billion). The company hasn’t had any primary fundraises since then. It offers home services like beauty and spa treatments, cleaning, plumbing, and appliance repair, and last year launched branded home appliances including water purifiers.

The company reported ₹282-283 crore in revenue over the last three months and made its first-ever profit in April. Its UAE business is also nearing profitability.

Urban Company had planned to go public in 2023 but postponed its IPO to next year. It added three independent board members—Dr. Ashish Gupta, Ireena Vittal, and Shyamal Mukherjee—in 2022 to prepare for the public listing.

Founded in 2014 by Raghav Chandra, Abhiraj Singh Bhal, and Varun Khaitan, Urban Company saw a 45% increase in operating revenue to ₹637 crore in 2022-23, while its losses narrowed to ₹308 crore from ₹514 crore in FY22. The company operates in over 50 Indian cities and internationally in the UAE, Singapore, and Saudi Arabia.