Investment of $30 Million to Be Made by Prosus in Urban Company

Nitin Konde

Oct 8, 2024 — 2 min read

Investment of $30 Million to Be Made by Prosus in Urban Company

One of the biggest technology investors in the world, Prosus, is increasing its position in the home services platform Urban Company by almost double. The Netherlands-based investor wants to increase its holdings before the business goes public early next year.

According to a media report, Prosus, which has funded some of the largest startups in the nation, including Swiggy, Meesho, and Eruditus, among others, will be investing roughly $30 million in an all-secondary transaction, providing Bessemer Venture Partners a partial exit. The deal will be closed at a fixed valuation of $2.6 billion. Note that secondary transactions usually occur at significantly lower valuations.

Accel Partners and Elevation Capital

Two of Urban Company's initial investors, Accel Partners and Elevation Capital, sold a portion of their shareholding to Dharana Capital in July in an all-secondary deal valued at approximately INR 400 crore. The sources claim that while both companies were thinking about selling additional stakes, they have now shelved those plans and will wait for the company's IPO the following year.

Even the possibility that Steadview was considering a sale is unfounded, according to a media report. Only Bessemer is offering the biggest portion and minor secondaries for Elevation and Acceleration. The report went on to say that Urban Company is one of the few good assets and that Prosus has an opportunity to take full advantage of it by doubling down its investment, and watch its valuation rise at the IPO the next year.

India’s Venture Capital Landscape

Recent trends in India's venture capital scene indicate that when their initial fund cycles are coming to an end, early-stage VCs are choosing to quit their portfolio businesses. In April, The CapTable published a detailed article about how venture capitalists (VCs) were seeking to sell their holdings in secondary transactions.

However, Prosus' decision to raise its ownership in Urban Company follows a significant multi-hundred million-dollar profit from its investment in Swiggy, a rapid commerce and food delivery company getting ready for an IPO later this year. Despite suffering large losses on two of its largest Indian assets, Pharmeasy and Byju's, Prosus is now focussing on growing its other purportedly profitable businesses. Prosus also wants to expand the scope of its holdings outside of tech ventures. Prosus made a $100 million investment in Vastu Housing Finance in September. It also planned to spend about $40 million on the jewellery platform Bluestone.

The Urban Company was founded by Abhiraj Bhal, Raghav Chandra, and Varun Khaitan about ten years ago. It last received main funding in 2021 from a variety of investors, including Prosus, Steadview, Dragoneer, and Tiger Global Management. At the time, the corporation was worth $2.6 billion. It has started discussions about an IPO with a few investment institutions.