While the listed Urban Company clocked 840,000-850,000 orders in February, rival Snabbit fulfilled 830,000 bookings. Pronto, which closed a $25 million funding round in March, had around 340,000 orders last month.
Amid the aggressive growth, these companies are leaning heavily on incentives to drive trials. Urban Company has been running on-ground campaigns in residential societies across Noida and parts of Delhi, offering free kitchen appliances and cleaning supplies to nudge residents to try its Instahelp service, according to people familiar with the matter.
Snabbit and Pronto have slashed introductory pricing in some of its markets to as low as Re 1 per hour to acquire first-time users.
As of February, Lightspeed-backed Snabbit was present in 108 micro-markets, against 87 in December. Pronto, which was present only in Gurgaon six months ago, now offers its services in 10 cities with plans to enter more following its fresh fundraise.
While these companies push for scale, investors are growing wary. From $7-8 million burned in the month of December, the three platforms have together spent almost $10-11 million in February.
Both public and private market backers are questioning the true total addressable market for 10-minute househelp and whether unit economics can sustainably improve.
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ETtechUrban Company’s stock has fallen over 40% since listing, with investors seeking clarity on when the business can turn unit-economics positive. Its market capitalisation is at around Rs 15,500 crore.
Snabbit, in the midst of raising its next round, has also been fielding questions from investors over the sector’s economics, people aware of these discussions said.
“Early scale-up in the segment has been encouraging, but even after nearly a year we haven’t seen these services become a primary use case for most users,” said a venture capital investor, who has backed a startup in this space. “Companies will likely expand into new markets now, but for the model to sustain, a core base of steady-state users needs to start generating meaningful economics.”
Analysts suggested the high frequency nature of the category could result in customers taking a shine to other services provided by the platforms as well. While Urban Company is already present in a number of other home services categories, Snabbit and Pronto have been planning to enter new areas. For example, Pronto is testing a car-wash service in Gurugram.
“Daily housekeeping is a high-frequency use case that could also become a strategic acquisition channel for it as customer trust could translate into adoption or increased repeat rate of higher-value services on the platform,” brokerage firm JM Financial wrote in a recent note. “If unit economics become viable, this could turn out to be the ‘Blinkit’ opportunity for Urban Company”.
Also Read: ETtech in-depth: Instant househelp demand triples as industry scrambles to crack economics
The burn question
During Urban Company’s October–December earnings call, founder and CEO Abhiraj Singh Bhal struck a cautious note when asked about the economics of the company’s InstaHelp push and how far along the business was.
“The short answer… is I don’t know. And it’s important for us to acknowledge what we don’t know. It’s too early,” Bhal said.
For now, he said, the company’s focus is on deepening its presence across micro-markets and strengthening its position with both customers and service professionals. The company believes the model can eventually break even at scale, but only if order values rise meaningfully.
“Those AOVs (average order values) need to be much higher than where they are today… around 1.8 to 2x,” Bhal said.
Bhal did not respond to ET’s queries.
Urban Company reported an average order value of Rs 172 for the October-December quarter. In February, according to people familiar with the matter, the company’s InstaHelp AOV was Rs 165-170.
That compares with roughly Rs 120-130 at Snabbit and about Rs 120-125 at Pronto in February. These figures reflect post-discount order values and include both heavily subsidised new customers as well as repeat users. Pronto did not comment on the numbers. Its $25 million funding round, which closed earlier this month, was led by Epiq Capital with participation from the startup’s existing backers such as General Catalyst, Glade Brook and Bain Capital Ventures. This round valued Pronto at $100 million, more than double the $45 million in the previous fundraising round in August, reflecting the company’s rapid scale up.
“Our focus is on quality, frequency, and retention. This is a deep customer need…not a discretionary purchase,” Pronto founder and CEO Anjali Sardana said. “If a customer has a poor experience, they won’t retain. In-home services require trust, reliability, and consistency. Our top 1% of customers use us over 23 times a month. Our top 10% use us more than nine times a month.”
That level of frequency validates the company’s thesis that it can become a primary service, not just an emergency backup, she said.
“We burned only $8 million in our first year, which reflects our cost discipline,” Sardana said. “We are currently in an exponential growth phase and focused on reliability, frequency and quality. We believe healthy AOVs will follow from strong retention and high-frequency behaviour. Capital efficiency has been central to how we’ve built the business so far.”
Snabbit founder and CEO Aayush Agarwal told ET that AOV alone is not the most meaningful metric for the category.
“Take food delivery or quick commerce… no matter how large the cart, the amount paid to the delivery rider remains the same. When last-mile costs are fixed like that, businesses optimise for parcel value,” he said.
The instant househelp model works differently.
“It’s closer to Rapido or Uber,” he said. “If an expert spends two hours on a job, they earn for two hours and if they spend one hour, they earn for one.”
Agarwal said the more relevant metric is gross profit per order.
“In this business, net order value versus cost per order, which is essentially the gross profit per order, matters far more than AOV,” he said.
On the gap between the order values of Snabbit and Urban Company, Agarwal said the difference largely reflects customer acquisition dynamics.
“We spend far less on retained customers. But a competitor that already has a large user base has more leverage when acquiring new users,” he said, noting that platforms that have already spent hundreds of crores building a customer base can afford to subsidise less.
A person aware of the company’s numbers said that for regular customers, Snabbit’s average order value in February was around Rs 166. Agarwal refused to comment on these numbers.
“For us, acquiring a new customer is more expensive because we don’t yet have that base,” he said. “That’s acceptable as long as we remain more efficient per acquired customer.”