Urban Company is rethinking its approach to international growth by moving away from its earlier strategy of building operations independently in foreign markets. The home services provider, which is preparing for a Rs 1,900-crore initial public offering (IPO), is now focusing on partnerships and platform integrations to sustain its presence outside India.
The company had entered markets such as the UAE, Singapore, Australia, the US, and Saudi Arabia with high expectations. These regions featured strong demand for app-based home services, driven by large expatriate populations and high disposable incomes. However, operational and financial difficulties have led the company to reconsider its expansion model.
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Urban Company has already exited Australia and the US. In the remaining international markets like UAE, Singapore, and Saudi Arabia, it is shifting towards partnerships. A recent agreement with West Asian e-commerce platform noon allows Urban Company to offer services through the noon app in both the UAE and Saudi Arabia. In Saudi Arabia, the company is also transitioning operations to a joint venture entity, Waed Khadmat Al-Munzal For Marketing. According to its draft red herring prospectus (DRHP) filed with markets regulator Sebi, the move signals an intent to wind down its subsidiary, Urban Company Arabia for Information Technology.
The company’s international operations are yet to achieve sustained profitability. In the nine months ended December 31, 2024, its Singapore subsidiary, Urban Home Experts Pte, recorded losses of Rs 43.32 crore, following a `118.56-crore loss in the previous year. In the UAE, its two subsidiaries posted losses of Rs 0.95 crore and Rs 1.51 crore, respectively. Losses in Saudi Arabia were more severe, with Urban Company Arabia for Information Technology reporting a 182% year-on-year increase in loss before tax, rising to Rs 23.45 crore from Rs 8.29 crore.
To address this, Urban Company established a JV in Saudi Arabia in March 2024 with Saneem Investment Company. It holds a 50% stake in the venture through its Singapore entity. The partnership restricts the use of the Urban Company brand to a period of 6-12 months, after which the venture must operate under a new identity.
The DRHP also mentions that the company may not be able to respond quickly to market changes under the JV model.
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