Urban Company Continues Investment in InstaHelp Despite Losses
Home services firm Urban Company is maintaining its investment in its rapid home services subsidiary, InstaHelp, prioritizing its strategic value for a broader home platform over short-term profitability.
Urban Company, an Indian home services provider, is continuing its significant investment in its subsidiary InstaHelp, which focuses on rapid home services. Despite InstaHelp currently operating at a loss, the company's leadership views it as strategically crucial for its larger goal of establishing a comprehensive home platform for Indian consumers.
During an analysts' call, Urban Company co-founder and CEO Abhiraj Singh Bhal highlighted InstaHelp's role as a primary customer acquisition channel. In micro-markets where InstaHelp is available, approximately 45% of new users now come through this service. This increased user engagement ensures Urban Company remains top-of-mind for household needs and hinders competitors from building similar consumer habits.
Financial disclosures show that Urban Company's adjusted EBITDA, excluding InstaHelp, was Rs 30 crore in Q2 FY27. However, due to a Rs 174 crore investment in InstaHelp during the quarter, the consolidated adjusted EBITDA stood at a negative Rs 144 crore. The company accepts this financial impact, identifying InstaHelp as a "winner-takes-most" category where cementing market leadership is a key objective.
The company is also seeking to raise Rs 2,500 crore in fresh capital following its stock exchange listing. A portion of these funds will be allocated to growing InstaHelp's market share in the fast home services segment, which faces intense competition. Urban Company is also exploring mergers and acquisitions to expand its core services and considering new product launches, such as air conditioners under its Native brand.