Urban Company’s board today approved a proposal to raise up to ₹2,500 Cr, alongside approving its financial performance for the September quarter. The proposed funding could involve issuance of equity shares, warrants, fully convertible debentures and convertible preference shares. 

The fundraise will be executed in one or more tranches via preferential allotment, private placement or one or more qualified institutional placements (QIPs), subject to shareholder approval. The final issue pricing and structure is yet to be determined. 

“The business is materially larger than at listing, growth has stepped up, and we now operate three businesses at scale with proven economics. The proposed raise of up to ₹2,500 Cr is about flexibility: it lets us invest with conviction across each of them, cement leadership in InstaHelp, and pursue inorganic opportunities selectively, without trading off one for another,” Urban Company said in a letter to shareholders. 

The fundraise proposal comes at a time when Urban Company’s quick home services vertical InstaHelp is facing tough competition from the likes of Snabbit and Pronto, resulting in the prospect of a war for market share fuelled by cash burn. 

Hefty investments in powering the quick home services vertical is also creating a dent in Urban Company’s bottom line. For the September quarter, Urban Company’s net loss more than tripled YoY to ₹182.5 Cr, while operating revenue jumped 41% YoY to ₹537.29 Cr.

Separately, the board also granted in-principle approval to explore residential air conditioners as a new business category under its product brand Native.

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