Urban Company to Shut Saudi Subsidiary, Shift Operations to New Joint Venture

Tiger Global–backed Urban Company is winding down its step-down subsidiary in Saudi Arabia due to financial unsustainability, according to a draft red-herring prospectus (DRHP).

The home-services company announced it will transfer its Saudi operations to a joint venture established in October 2024, with the intention of closing its step-down subsidiary, Urban Company Arabia for Information Technology (UCAIT).

“We have started operations through our joint-venture entity, Waed Khadmat Al-Munzal for Marketing, located in the KSA with effect from 1 January 2025, with an intent to eventually wind up the step-down subsidiary, Urban Company Arabia for Information Technology (‘UCAIT’),” the DRHP stated.

Reported Losses

Incorporated in 2021, Urban Company Arabia reported a 182% increase in loss before tax, reaching ₹23.4 crore for the nine months ended 31 December 2024 (9M FY25), compared to ₹8.3 crore in the previous year.

Its loss before tax was ₹14.1 crore in FY24, ₹17.7 crore in FY23 and ₹10.1 crore in FY22.

The start-up, through Urban Home Experts, held a 100% indirect investment in Urban Company Arabia, which operates an online marketplace enabling clients to search for and hire service providers for home and business needs.

Shares Offload

The founders of consumer-service unicorn have collectively sold shares worth ₹779.08 crore in secondary deals. According to Inc42, Abhiraj Bhal, Varun Khaitan and Raghav Chandra each sold shares worth ₹259 crore.

The founders sold a portion of their shares to some of the company’s existing investors, including Prosus Ventures, Dharana Capital, Think Investments, former ITC executive Sanjiv Rangrass, SailThru Ventures and Swiggy co-founder Sriharsha Majety.

Following these transactions, each founder now holds a 6.67% stake, totalling a combined 20.1% equity in the company. The founders have chosen not to participate in the offer-for-sale component of the upcoming IPO.