Urban Company’s board today approved a proposal to raise up to ₹2,500 Cr, alongside approving its financial performance for the September quarter. The proposed funding could involve issuance of equity shares, warrants, fully convertible debentures and convertible preference shares.
The fundraise will be executed in one or more tranches via preferential allotment, private placement or one or more qualified institutional placements (QIPs), subject to shareholder approval. The final issue pricing and structure is yet to be determined.
“The business is materially larger than at listing, growth has stepped up, and we now operate three businesses at scale with proven economics. The proposed raise of up to ₹2,500 Cr is about flexibility: it lets us invest with conviction across each of them, cement leadership in InstaHelp, and pursue inorganic opportunities selectively, without trading off one for another,” Urban Company said in a letter to shareholders.
The fundraise proposal comes at a time when Urban Company’s quick home services vertical InstaHelp is facing tough competition from the likes of Snabbit and Pronto, resulting in the prospect of a war for market share fuelled by cash burn.
Hefty investments in powering the quick home services vertical is also creating a dent in Urban Company’s bottom line. For the September quarter, Urban Company’s net loss more than tripled YoY to ₹182.5 Cr, while operating revenue jumped 41% YoY to ₹537.29 Cr.
Separately, the board also granted in-principle approval to explore residential air conditioners as a new business category under its product brand Native. This would be subject to further evaluations and final board clearances.
“This category represents a large market in which the Company already services millions of units annually, providing it with first-hand insights into the existing product gaps and customer needs,” noted UC’s board.
Urban Company made its debut on the bourses just around one year ago. Hence, its proposed fundraise puts it among the ranks of several new-age tech companies like Kissht, Swiggy, Ather Energy, and Ola Electric that have sought to return to the public markets for fresh capital soon after their IPOs.
On a quarterly basis, its net loss nearly doubled from ₹92.1 Cr. Operating revenue remained nearly flat compared with ₹528.3 Cr in Q1 FY27.
The company’s adjusted EBITDA loss for the quarter widened to ₹144 Cr, due to a “deliberate” ₹174 Cr investment in InstaHelp. The company also gave a timeline to improve its bottom line performance in the near future.
“We remain on track for Adjusted EBITDA breakeven by Q3 FY28 and Adjusted EBITDA of ₹1,000 Cr by FY31,” it said.
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