Home services marketplace Urban Company announced earlier this week that its board would meet on Friday, October 16, to consider raising funds through equity shares and/or equity-linked securities via a qualified institutional placement (QIP), preferential allotment or other permissible routes.
The proposed fundraise comes at a time when competition in the instant home services space is intensifying, driven by the aggressive expansion of rivals such as Snabbit and Pronto.
On August 2, Urban Company announced that its instant domestic help service, InstaHelp, had crossed 100,000 orders delivered in a single day. Snabbit, meanwhile, says its daily job volume has surged from around 400 to more than 1.15 lakh in less than two years.
“Snabbit and Pronto currently operate with a clear mandate — and rightly so from their vantage point — to prioritize market-share expansion and differentiated category creation over near-term unit economics,” according to domestic brokerage firm JM Financial.
Having raised $112 million and $60 million, respectively, according to Tracxn data, the two challengers have the institutional financial runway to aggressively subsidize customer acquisition and service-provider incentives.