In April, Pronto’s monthly orders surged 40% sequentially, with average order value between Rs 130-140 range due to lesser discounting amid a supply-demand constraint, she said.
The latest fundraise is an extension of Pronto’s $25 million funding round at a $100 million valuation from Epiq Capital, General Catalyst, and Bain Capital Ventures.
“With this, we have closed this round at $45 million,” said Sardana. “We will deploy the capital largely for scaling supply. Ensuring steady supply will be a key priority,” she said, adding that the company will invest in referral programmes to onboard more professionals.
ETtechET reported on Groom’s investment on April 24. This comes a few weeks after rival Snabbit raised $56 million funding from Susquehanna Venture Capital, Unicorn Growth Fund, and Bertelsmann India Investments, valuing the startup at $350 million.
The instant house help sector is seeing rising competitive intensity, fuelled by growing demand thanks to aggressive venture capital-backed micro-market expansion of these platforms.
“There’s much more irrationality on the supply side than demand side,” said Sardana. “The entire industry was very supply constrained last month. So, right now, there’s a lot of money obviously going towards supply scaling.”
ETtechDuring April, users in Delhi-NCR, Mumbai, and Bengaluru reported limited or no availability of slots on these apps due to a sudden unavailability of professionals as many returned home due to assembly elections in some states and for the harvest season in agrarian states.
Apart from house help, Pronto has launched car washing service in Gurugram and Mumbai, and it plans to launch home cook service in Bengaluru next.
The latest fundraise has increased Pronto’s total funding to $58 million. Rival Snabbit has raised $112 million so far. Urban Company, the biggest in this space, listed in August last year. However, its post-listing stock price has been under pressure due to the rising competition in this industry from risk-capital backed startups.
Demand and burn
According to a Morgan Stanley report, Urban Company’s InstaHelp, Snabbit, and Pronto clocked 10 million monthly users in March.
In March, both Snabbit and Urban Company’s InstaHelp segment cumulatively surpassed the one-million booking mark. Pronto crossed the 500,000 fulfilled bookings mark in March, when it turned one. The company has burned just over $8 million in the past year, Sardana said.
The growth in demand comes with expansion into new micro-markets and categories with heavy cash burn.
ET reported earlier that across the top three players, the industry’s cash burn during February had increased to $11-12 million, from $7-8 million in December.
India’s home services market is expected to clock a compound annual growth rate of 18-22% to around Rs 8,500-8,800 crore by FY30, per consulting firm RedSeer.