Dharana Capital acquires Rs 400 crore worth of stake in Gurugram-based Urban Company

Bengaluru-based investment firm Dharana Capital has acquired over Rs 400 crore ($50 million) in Urban Company through a secondary transaction.

Notably, the transaction also marks the largest ESOP liquidity transaction in Urban Company's history, with shares acquired from employees and other shareholders.

Dharana Capital founder joining the board

As part of the investment, Vamsi Duvvuri, Founder and Managing Partner of Dharana Capital will join Urban Company’s board as a non-executive director.

“We are very excited to partner with Dharana Capital and have Vamsi Duvvuri join our board of directors," said Co-founder Abhiraj Singh Bhal.

“Urban Company, with its full-stack approach and focus on partner enablement, has built a strong, capital-efficient and durable business in a challenging local services market,” Duvvuri said.

“We remain deeply impressed with the focus and execution of the UC founders and team. We look forward to continuing to support them in their endeavour to build a long-lasting institution.”

Urban Company's ESOP

In May, Urban Company announced its fifth ESOP sale program involving a secondary transaction of around Rs 203 crore. This allowed current and former employees to liquidate their vested stocks, with Dharana Capital, Vy Capital, and Prosus purchasing these shares.

So far, Urban Company has granted ESOPs to 1,593 employees, with 784 participating in five buybacks, liquidating shares worth Rs 306 crore ($37 million).

Is Urban Company profitable?

Urban Company has shown significant improvement in its financial performance. The company posted a revenue of Rs 637 crore in FY23 and reduced its losses by 40.1% during the fiscal year.

The company also turned profitable at the profit-before-tax level in April and achieved a 4% profit-before-tax margin in the June quarter of FY25.

Additionally, It reported a 45% growth in consolidated operational revenue for FY23, rising from Rs 438 crore in FY22 to Rs 637 crore in FY23. Its losses dropped from Rs 514 crore in FY22 to Rs 308 crore in FY23.

Urban Company's market presence

Urban Company operates in 62 cities across India, the UAE, Singapore, and Saudi Arabia, with a partner network of over 55,000 trained service professionals. 

Looking ahead, Urban Company is preparing for an IPO in 2025 and plans to announce a new independent director on its board soon.