The business model of UrbanClap revolves around connecting service providers with the service seekers.
UrbanClap is an online platform that allows people to find professionals to help them with daily services. These services can range from home cleaning, educational tutors, and engineers to photographers, lawyers, and much more.
In this post, we will be diving deep into the Business Model of UrbanClap and understand how they channelize their functions and make money.
So, without any further ado, let us get started right away-
Table of Contents
Introduction to the Business Model of UrbanClap
UrbanClap Business Model is a startup with the basic idea that someone sitting at home can hire help for a varied range of jobs.
The company is a community of professionals providing their services to whomever it may concern.
The business model of UrbanClap is a way to change how members of the armed forces get employment which is paid quickly. The application is available on smartphones, and it connects the specialists with the users.
Many hurdles have been overcome in recent years, and the company has become one of the fastest-growing startups.
Striking History of UrbanClap Business Model
The company was started by Varun Khaitan, Abhiraj Bhal, and Raghav Chandra in 2014.
Varun and Abhiraj studied together at IIT Kanpur. They shifted to the US, in 2009, to work. Khaitan worked at Qualcomm and the Boston Consulting Group and returned to India in 2013. Surprisingly, Abhiraj also came back at the same time.
The two college friends founded Cinema Box in 2014. This allowed travellers to stream movies on a bus, train, or aeroplane with the aid of Wi – fi.
A familiar friend introduced them to the third co-founder, Raghav. He was a computer science and engineering graduate from the University of California. He worked at Twitter for a bit and shifted back to India in 2013.
The craving to open an online store made the three friends.
In August – September 2014, the three co-founded UrbanClap by putting in a total of 10 lakh.
The business model of UrbanClap connected customers to the suppliers through a quick and easy mobile application.
The company now provides services in eight Indian cities. They have around 60,000 professionals. Five thousand five hundred requests are fulfilled every day.
Founding and Funding of the Business Model of Urban Clap
The organization was founded as a need to bridge the gap between service providers and service receivers. They mostly wanted to take the concept of Yellow Pages and convert it into an online format.
The company began as a search and discovery platform but has now become a belvedere for providing services, training individuals, and maintaining quality control.
The company raised a total of $57 million for seven investors in 5 funding rounds.
The seed capital raised $1.6 million from SAIF Partners, Accel Partners, Kunal Bahl, and Rohit Bansal.
Two – Fold Business Model of UrbanClap
The business model of UrbanClap provides the most suited experts for your day to day needs.
You can hire electricians, yoga trainers, lawyers, engineers, chartered accountants, beauticians, photographers, interior designers, etc.
They use an automated matchmaking algorithm that they continue to perfect through heavy investing.
To ensure that the business model of UrbanClap is safe for you, they do a background check and police verification for all the partnered professionals.
The business model of UrbanClap is as follows:
1) Fixed Charged Services
For plumbing, electrician work or home cleaning the company accepts the money from the app and then pays the hired help their dues.
They cut a specific commission from the funds received.
2) Services without Fixed Charges
The organization charges the experts for lead generation and sponsored listing.
The users do not pay immediately. They get to know the service. The professional pay a fee to accept the request. If the expert can convince the user to buy the service, then monetizing is successful.
The user is given five options from which he can choose his most comfortable option. If the profile of the service provider is not viewed, he gets paid credit. If the algorithm is good, the user has to do less work.
The business model of UrbanClap has achieved astounding success in the past few years. The app recently started using AI (Artificial Intelligence) for the data. It helps them assess the users’ needs better.
Not only do they understand the user’s needs and allocate resources, but they also track the entire process simultaneously.
The three founders have combined Machine Learning and AI-backed processes to codify the way decisions are made. The company is handling all the departments in a smooth, efficient manner so that a user at home can receive high-quality services.
If the organization continues as the present, the business model of UrbanClap will turn into an aspiring achievement.
Interesting Facts associated with UrbanClap Business Model
The company has accomplished applauding success in the few years of it starting as an organization. A few fun facts of the business model of UrbanClap:
- Launching Date: October 2014
- Founders: Varun Khaitan, Abhiraj Bhal, Raghav Chandra
- Headquarters: Gurgaon, India
- Brand Statement: Get instant access to reliable, certified and affordable service
- Number of services: > 100
- User base: > 3 billion
- Employed professionals: > 50,000
- Company valuation: $480 billion
- Monthly order average: 4,50,000
- A few names in the list before UrbanClap was finalized: Prowaala, ProTrumpet, Joystation, WorthyFit
- Ratan Tata, former chairman of Tata Sons Ltd, invested an undisclosed amount in the company in 2015.
- 75% of supplier applications are rejected to maintain a quality check
- Abhiraj Bhal – Operations and service provider onboarding
- Raghav Chandra – Technology and product developer
- Varun Khaitan – Marketing and product growth
These differences make the business model of the UrbanClap tick.
Geographical Presence of UrbanClap
The organization made its presence in 8 cities in a matter of one year.
- Delhi
- Hyderabad
- Mumbai
- Chennai
- Pune
- Bengaluru
- Kolkata
- Ahmedabad
They plan on spreading to Jaipur and Chandigarh.
UrbanClap Business Model Design
Key Activities
- Simplifying the complicated user experience with technologies like AI and ML
- Pricing controls scheduling
- Personalizing the UX on the platform
- Marketing services
- Reaching to Tier 2 cities
Cost Structure
- Salaries of employees
- Technological infrastructure
- Marketing expenditure
Key Resources
- Engaging Website
- Healthy Mobile Application
Customer Relationships
- Social Media
- Customer support
- Reviews and ratings
Revenue Streams- How UrbanClap Makes Money
There are three ways incorporated in the business model of UrbanClap that help the company make good money-
1) Commission
In this, customers book service-providers from the UrbanClap platform, and for that service, they pay a fix amount either COD or digital payments. From the payment to the service provider, there is a commission for UrbanClap as well.
2) Reverse auction
A service provider using UrbanClap can pay a fixed amount for promoting their services on UrbanClap. In exchange for this money, UrbanClap team helps service provider in lead generation and conversions.
3) Advertisements
Businesses, manufacturers, and services use the UrbanClap platform to run their advertisements in exchange for advertising fee to the company.
Working of the Urban Clap Business Model
1) Service Receiver End
- Through the app, users can go through a list of services depending on their requirements and choose the appropriate one.
- The business model of UrbanClap promotes the user to choose a particular service; they can select one package from a list of options. The choice is usually made on a budget of the user.
- Once the package is selected, the user chooses a date and time for the appointment.
- The application allows the users to check the service provider and his qualities. The presence can be guaranteed by visiting the profile of visitors.
- Payments are made by advance payments or COD (Cash On Delivery).
- The users rate and review the services.
2) Service Provider End
- The app has a two-folded function – one for the user and one for the professional
- When a service is requested, the professionals in that area get a notification. They can either accept or deny.
- The business model of UrbanClap is designed in such a way that the professionals can analyze their work commitments and accept or deny the service request accordingly.
- If the request is accepted, the user and provider get notifications to confirm the booking.
- If due to some emergency professionals back out, they are charged.
Financials of 2019
The business model of UrbanClap has recorded operating revenue of INR 116 crore which is 150% up compared to 2018.
The operating loss increased by 26%, that is, from INR 57 crore to INR 72 crore.
The company reported that it served 6,20,000 service orders in April. The annual value of these transactions was around INR 1,000 crore.
They recorded around 3.3 billion service orders in 2019, which is much higher than the 400 million in 2018.
Vision and Mission
The business model of UrbanClap is based on a robust strategic vision and mission. These statements help the workers to strive for perfection.
The co-founder Abhiraj Bhal, said, “Our vision is to empower millions of professionals to deliver services at home like never experienced before.
In the last financial year, we took great strides towards that mission, improving our capabilities in the selection, onboarding, training, and certification of service professionals. Additionally, we also invested in areas like product procurement, technology, and financing, establishing our market leadership.
Conclusion
Abhiraj and Varun claim to have 1000+ highly engaged service providers through whom they connect to 1000 professionals.
The business model of UrbanClap aims to achieve a more comfortable, faster, and more organized way to connect the human needs to the providers of these services. The app helps to reduce the middlemen concept.
The service receivers engage with the service providers before booking an appointment, and this allows them to receive the aptest package depending on their needs and requirements.
The co-founders put together their desire and brains to come up with a unique idea of providing services that are required by a person daily.
The business model of UrbanClap earns its money from the commission and reverse auction. This allows satisfaction on the part of the customers and suppliers as well. It is a well – thought out idea with constant improvement for the betterment of users.
The organization helps the urban population to complete various chores through a secure mobile application or website.
It is the millennial version of Yellow Pages and is going to reach applauding heights.
How inspiring do you consider the business model of UrbanClap? Share your views in the comments below.
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Quite helpful article ! Thanks Hitesh for compiling this information.
Answerthis please… because i am making urban clap kind of application in my country….
How does urban clap get commission if the payment is done in cash…cod
I dont get this point…
I havent used their platform as a service provider. But most logically, there would be debits which might accumulate against a service provider. These debits will be adjusted against future payments which arent COD or Cash. Or else, it would be like a fee model. So if u accumulated an order of $10, then u gotta pay $1 as the fees / commission. Now u may not pay it against COD. But if u wanna continue using the platform then u gotta pay up to get more orders.
See if u can find any urban clap service providers on linked in or facebook. And speak to them.
Hello Hitesh,
Really nice articles, How do I connect with you, Can you drop me a text on 9164840000 or my mail ID, I have something important to discuss with you.
Are the numbers mentioned correct? Valued at USD 480 billion? Userbase 3 billion?
Most of these app based business models are running in huge losses.Let 8t be Zomato or Big Basket or Uber. Anybody can sell if goods or services are sold below cost. It is all a mumbo jumbo to make big investors fools and burning their money. Of course if one is capable of giving a spin talk and make smart people part with huge sums as equity it needs to be admired. But in the end it is not a business model but a scam model.
Jealous will never pay you. This is a successful company and they make millions regardless of what you may think about them. I wish them to grow until they penetrate your country’s market.