UrbanClap Business Model: Detailed Guide on How it Works

UrbanClap Business Model

UrbanClap Business Model: Detailed Guide on How it Works

UrbanClap (rebranded as Urban Company) is the fastest-growing startup. The company connects you with the best service providers and helps you to get the solution to your everyday needs. No matter whether you’re looking for a plumber, beautician, or any other professional, Urban Clap is the right place to find them all. You might be curious how the marketplace business started and grabbed massive success? If yes, let’s step into the UrbanClap business model and revenue model; also, let’s check how it connects customers with service providers.

UrbanClap went live intending to change the way how local service providers are working and paid. Marketplace services were one of those sectors that failed to witness a transformation. However, there were many services like Yellow Pages, Just Dial, and Sulekha; all these companies used to hire professionals who could provide their service, but the loophole in this approach was that a great amount of money was spent to fill the aggregator’s pockets.

However, UrbanClap fills this loophole by connecting users with professionals who emerge to be the most suitable of their kind. The team had lots of issues, but they are still paddling them all. UrbanClap has developed a network of more than 40,000 trained service professionals and provided its service to more than 5 million customers across major metropolitan cities of Abu Dhabi, India, Sydney, Singapore, and  Dubai. The company is trying to grow its network by engaging more people to be part of its growing community.

What is UrbanClap?

Urban Company is an Indian marketplace that provides home, maintenance, beauty, and wellness services to its customers. The company was founded by Varun Khaitan, Abhiraj Singh Bhal, and Raghav Chandra in 2014. It was valued at 2.8 billion after its employee stock sale program concluded in 2021; the company operates in more than 30 Indian cities, UAE, Australia, Singapore, and Saudi Arabia.

UrbanClap Business Model

History, Success Story, and Some Interesting Facts About UrbanClap

Founders invested around 10 lakh in 2013 in a hyperlocal service platform to make it easier for users to get connected with service providers and appoint them to get their daily chores completed with ease. Urban Clap was rebranded as Urban Company in 2020 as a move to launch it as a global brand.

Home services startup has reported a more than 103% rise in revenue to ₹216 crores between 2019 and 2020 on account of demand in its wellness and beauty vertical. The services startup had around ₹106 crores of revenue in FY19. The net booking value of transactions processed through the company’s platform grew by 138% to ₹918 crores in FY20 compared with the affiliated period a year ago.

Urban Clap said that the beauty and wellness vertical contributes approximately 55% of its revenue. This segment remained largely suspended on the platform after lockdown and nationwide restrictions. India and UAE’s largest home service marketplace platform Urban Company has raised around $190 million from investors led by Naspers.

The funding has doubled the Gurugram-based company’s valuation to around $2 billion. The firm’s value increased to $933 million after a funding round by Tiger Global. UrbanClap has become a unicorn startup that was valued at about $1 billion.

Success timeline of UrbanClap to unbox its success path:

success timeline of UrbanClap

Urban Company witnessed emphasized results post lockdown, and it’s expected that the company will double its revenue in the fiscal year compared to the previous year. The company is working harder to grow its partner strength, helping them to meet the growing market demand.

Co-founder of UrbanClap Varun Khaitan said, “during pandemic spread, we re-imagining more hygienic and safer services and have made significant investments in PPE (personal protective equipment), safety training, and modern tech. However, our business has been on a positive trajectory, and lots of customers trust Urban Company to enter their dwellings and provide home and beauty as per their requirement.”

Home services marketplace company, UrbanClap has announced a stock ownership plan of 150 crores for its service providers over the next few years. The company has confirmed that it had received the approval for the tranche worth 75 crores; they have added a process to grant all the stocks, taking into account the performance of service providers and longevity on the platform. Have a close look at a few more interesting facts about Urban Clap right away.

Founders: Raghav Chandra, Varun Khaitan, and Abhiraj Bhal.

Headquarters: Delhi, India

Live services on UrbanClap: 107 services

People using UrbanClap: 3 million.

Average transactions each month: 450,000

Average rating: 4.2

Service providers: 200,000 service providers

Average customer requests per day: 5,000 customer requests

Service categories in number: 75

Percentage of monthly returning users: 40%

Founding UrbanClap raised: $185 million.

UrbanClap Business Model: Explore How Marketplace Platform Works?

UrbanClap Business ModelThe UrbanClap business model makes it easier for customers to get connected with skilled professionals to get all their work done efficiently. It is popular in more than ten Indian cities where it offers service; the company has partnered with millions of professionals.

UrbanClap has increased the field of activities and population size services, and the company has opted to cut back on the variety of deals it has listed on its website. After realizing that customers prefer the business model where a highly professional was dispatched to their doors, UrbanClap started providing its quality services. They paired with transparent pricing and standard procedures; the team arrived in the market with its successful recipe.

Service Receiver’s End

  • Users can use a list of resources and choose the right one on the app based on their needs;
  • An impressive UrbanClap business model enables customers to choose specific services; it enables users to choose a range of products;
  • Customers can choose any date and time to book the appointment;
  • The user app enables consumers to check information about the service provided;
  • Users are allowed to use multiple payment options, including cash on delivery;
  • Users are allowed to rate and review the service provider and their service.

Service Provider’s End

  • The app has a dual purpose for users and experts;
  • Professionals get a notice when users request the service;
  • They can choose to embrace or reject the service at their convenience;
  • When the service provider approves a customer’s request, they are provided with all essential details;
  • Service providers are fined if they back out.

How UrbanClap Work?

An UrbanClap business model makes it easier for internet users to get connected with professionals. UrbanClap was a search tool during the initial stage. The platform lists professionals, trains them if essential, and connects them online. It enables users to book regular services with ease.

Users can check the app and select and schedule the services at their convenience. However, UrbanClap promotes the process of specifying trained business professionals. It supports service providers by selecting intermediaries and enables them direct access to customers. The successful UrbanClap business model works in two primary ways:

1. Fixed Charged Services
For electricians, plumbers, and other maintenance service providers, the company accepts money from the app and pays the hired professional. It charges different fees for the collected funds.

2. Services Without Any Fixed Charges
The company is paying funding listing and lead generation to the experts. Customers aren’t charged right away; they comprehend the operation—the professional needs to pay a fee for approving the order. Professionals can influence the customer to buy the service and monetize the success.

There are various services listed in the app and users can choose them based on their requirements. The matching algorithm of UrbanClap makes it easy for users to find experts and get things done quickly with real-time tracking features. On the other hand, this algorithm also works better for service providers as they can get more service requests and earn more profits at the same time. 

The popularity of on-demand services is increasing, especially in urban areas and entrepreneurs are all set to grab this opportunity and are thinking of investing in the feature-rich handyman app to stay ahead in the game.

UrbanClap Revenue Model: How the Company Makes Money?

The marketplace company uses a four-way approach when it comes to generating money. An UrbanClap revenue model mainly lists two categories; one is fixed pricing service, and the other is non-booking or variable pricing services. The company uses various methods to bring great capital to the table.

Commission Model

The company generates around 85% of its revenue by subscription. They charge a few percentages of commission from the service provider; they support all consumers by offering them reliable and fast service. Hence, the more service providers work, the more reward they get from offering their home services.

Reverse Auction

UrbanClap supports the approach of charging the specialist for listing for the second group and lead generation. It is a reverse auction. Through this method, customers are not specifically booking the service; instead, they spend time in operation awareness. Specialists have to pay a fee to get the approval of the request.

Monetization is based on the capability of the specialist to convince the consumers to book the service. The company has introduced the user to five experts who can vote after the assessment. When the expert’s profile is not present, the professional gets the credit paid back. Here is where the algorithm for matchmaking comes into existence. The better the algorithm works, the less the customers have to work.

Lead Generation

It also provides a way to generate income. However, the primary source of revenue generation for the marketplace platform is commission charging. It charges lead generation from service providers and professionals.


Besides the above-listed approach to generating money, there are methods of earning money which is an advertisement. Suppliers, businesses, and service providers can invest in advertisements to display their ads on the UrbanClap platform; the company charges advertising fees in return.

UrbanClap has experienced great success; the company is planning new and effective ways to build a strong presence and satisfy the needs of millions of customers in different regions. Getting inspired by the marketplace platform, many entrepreneurs are investing in an app similar to UrbanClap. If you are looking to start the same, then get a quote right away.

Final Words

People want to get all their needs satisfied instantly; the growing demand for instance service has made it crucial for brands to opt for new ways that help them meet the customers’ needs. Urbanclap understands that very nicely and uses AI-enabled information to better evaluate user needs. You can also choose to follow the success path of the company; just understand the UrbanClap business model to have a clear idea about how UrbanClap works and makes money.

If you want to create and launch an app similar to UrbanClap, we are here to help you out. We will capture your business needs and provide you with a one-stop solution that satisfies all your business and customers’ needs. For more info, contact us at [email protected].

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