Key highlights UC grew 45% YoY in FY23 while reducing losses India’s business broke even in Q1 FY24 Customer obsession. Partner empowerment. These two values have been central ...
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These two values have been central to Urban Company’s build journey. These values define our true north and form the bedrock of our day-to-day operations. In this Annual Business Summary for FY23, we highlight how these values have helped us improve service experiences, enable partners to lead decent middle-income livelihoods and grow meaningfully while progressing toward profitability. We also delve into the efforts to strengthen our corporate governance and ESG practices.
Our growth in FY23 came on the back of investments in service quality, partner training and enablement, new innovations, brand building and technology development. We saw steady business growth with revenue from operations (consolidated) growing by 45%, from INR 438 Cr. in FY22 to INR 637 Cr. in FY23. We also made meaningful progress towards improving profitability driven by operational leverage in fixed costs and driving efficiency across other costs. Losses for the year declined from INR (514 Cr.) in FY22 to INR (308 Cr.) in FY23.
The India business broke even on an adjusted EBITDA basis during Q1 FY24 with negative working capital. Our India business contributes approximately 90% of our revenues. We remain focused on improving profitability for India and UC as a whole. Our strong unit economics with focused cost control will help us drive EBITDA improvement as the business scales.
In the tables below, we have used additional non IND AS financial measures — Net Transaction Value, Contribution Margin and Adjusted EBITDA. We believe these non GAAP financial metrics along with other non financial metrics will help readers better understand business and financial performance. GAAP metrics mentioned under Q1 FY24 are unaudited.
We prioritize customer experience above all else and work backward from the promises we make to our customers. Our approach towards customer experience is one of continuous improvement across five key pillars — Quality, Convenience, Value, Selection and Trust.
Over the years, we have seen a steady improvement in average ratings given by customers at the end of each service. In FY23, customers on average rated our services at 4.82/5.0, across millions of ratings collected on our apps. These included more than 17 million services rated 5-stars by our customers. On third party platforms such as the Google Playstore and the Apple App Store, our average app rating is 4.7 (on a scale of 5) across > 1.8 million ratings, a reflection of our service quality and the convenience offered by the platform.
This focus on customer excellence has helped us grow the share of repeat bookings steadily each year. Repeat customers (Acquired in years prior to FY23) contributed ~77% of the Net Transaction Value of the platform during FY23. We expect this number to surpass 90% in the coming years.
We help partners deliver great experiences by focusing on continuous training programs, both in person and online. Partners are supported to improve their performance through the following efforts:
Through the above interventions, we support partners to improve their performance across a few key parameters — Average ratings, order acceptance %, order cancellation % and the usage of genuine products. To further improve customer experience and reduce error rates in delivery, we have recently raised the operating standards for partners on the platform. Our business teams are organizing focussed group discussions with partners explaining the rationale for this change. Our goal is to work with all partners to help them improve and deliver delightful service experiences to consumers.
We are determined to make a real difference in the lives of our Service Partners, enabling them to lead decent middle-income livelihoods. This helps our Partners earn significantly more than what they can in offline models and creates a long-term sustainable career path for them.
To this end, we are committed to delivering on our four key pillars of Partner Enablement:
A. UC Partner Earnings Index for H1 CY23 can be accessed here.
2. Social security benefits: All active partners in India benefit hfrom a free life, accidental and health insurance cover. Details of our social security benefits for partners in India are detailed below:
Additionally, we enable access to credit on easy terms for our partners through tie ups with NBFCs and fintechs. All eligible partners can avail personal loans up to INR 1 lacs and initial kit loans at attractive interest rates.
3. Training & upskilling: To ensure consistently good service experiences, we have built a vast network of training centers and industry experts who train and upskill our service partners everyday. We have invested more than INR 250 Cr. since inception in training and upskilling our partners. Our training programs are either completely free or highly subsidized for partners, with ~ 90% of the cost of training being borne by Urban Company.
4. Wealth creation: Creating a win-win environment implies that the growth of our business is synonymous with the growth of our partners. There’s no stronger testament to this value that we hold dear than our industry-first Partner Stock Option Plan (PSOP). Our Service Professionals get to enjoy the fruits of their hard work and partake in the company’s growth. In FY23, we granted stocks to 500 service partners, of whom 30% were women.
Building a world-class institution requires having the right set of folks to guide and advise us and ensure we do right by all the stakeholders involved — our customers, service partners, investors, employees, government and civil society at large.
Our nine-member Board is instrumental in providing input to our management on strategy, growth, profitability, and doing right by all stakeholders while maintaining the highest standards of corporate governance. Their varied skill sets, experience, and background help the organization with strategic guidance, valuable insights, and prudent counsel. The board comprises 3 executive directors (the founders), 3 non executive directors from our investors, and 3 independent directors. Our independent directors also chair the organization’s independent Audit, Risk Management, Nomination and Remuneration, and Corporate Social Responsibility committees.
Brief Profile on Urban Company’s Independent Directors is given below. To know more about our Board and ESG commitments, read our latest ESG report.
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