Urban Company Faces Declining Order Value in Fast-Growing InstaHelp Segment

Urban Company, the Indian technology platform, reported a loss of Rs 346 per InstaHelp order in the first quarter of fiscal year 2027, an improvement from Rs 447 in the previous quarter. However, the company's average order value (AOV) for its 10-minute home services segment declined from Rs 150 to Rs 138.

The reduced AOV is attributed to aggressive pricing strategies implemented by Urban Company to acquire customers in a highly competitive market, facing rivals like Snabbit and Pronto. Despite these challenges, the company's management remains optimistic about InstaHelp's long-term prospects, even as some competitors question the potential for AOV growth in this segment.

InstaHelp processed 3.82 million orders in the June quarter, marking a 43% sequential increase. Despite the volume growth, the segment reported an adjusted EBITDA loss of Rs 132 crore. CEO Abhiraj Singh Bahl stated that the AOV needs to reach approximately Rs 300 for the business to break even.

Meanwhile, Urban Company's core India consumer services vertical, excluding InstaHelp, showed continued momentum, with revenue increasing by 31% year-on-year to Rs 356 crore. The company is also leveraging artificial intelligence for quality audits and service professional training, a move that comes after scrutiny of similar practices by a competitor.