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Urban Company reaches profitability milestone in April 2024, CEO Abhiraj Bhal announces

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In a recent LinkedIn post, Abhiraj Singh Bhal, CEO and co-founder of Urban Company, announced a significant milestone for the hyperlocal services startup – the company has achieved profitability before tax (PBT) in April 2024. This achievement marks a turning point for Urban Company, whose operations in India they were now able to offset losses from their overseas businesses.

Highlighting the path to profitability, Bhal pointed out that while the Indian business was profitable earlier, investments in international markets kept the consolidated company in the red. However, with India’s profitability now effectively offsetting overseas losses, the consolidated business has become profitable at PBT.

Urban Company’s overseas footprint includes operations in the United Arab Emirates, Australia, Singapore and Saudi Arabia. Despite the challenges of expanding into these markets, the company’s strategic focus on profitability within its core operations has begun to yield positive results.

Bhal highlighted Urban Company’s commitment to sustainable growth and pledged to prioritize the interests of customers, service partners, employees and shareholders. This commitment to sustainable growth is in line with a broader industry trend where startups are under increasing pressure to demonstrate profitability and operational efficiency.

The latest announcement follows Urban Company’s earlier milestone of breaking even in Adjusted EBITDA with negative working capital in the first quarter of FY2023-24 in its India business. The company also reported a significant year-on-year decline in net losses for FY2022-23, which showed a 40% reduction compared to the previous year.

Founded in 2014 by Bhal, Raghav Chandra and Varun Khaitan, Urban Company offers a wide range of services including home cleaning, appliance repair, salon and massage, painting and more. The startup has received significant backing from prominent investors such as Tiger Global, Prosus and Steadview Capital, with total funding exceeding $445 million.

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While Urban Company has achieved PBT-level profitability, the startup aims to continue its trajectory towards sustained profitability and operational excellence. The development coincides with a broader shift in India’s startup ecosystem, where profitability has emerged as a key metric amid a challenging funding environment characterized by reduced investor appetite for high-risk ventures.

The trend towards profitability is exemplified by other prominent startups in India, including CarTrade, Groww, Fractal, Indifi and Perfios, all of which turned profitable in FY2022-23. This shift underscores the strategic imperative for startups to adopt sustainable business models amid evolving market dynamics and investor preferences.

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