UrbanClap | Business model | How UrbanClap earns? | CASE STUDY | Hindi - YouTube

Hello Friends, I am Sahil Khanna and you are watching Intellectual Indies

And, Today we will talk about urban clap business model

I was getting a request for this video from many people

The story started in 2013 with two boys Varun and Abhiraj who were working at Boston Group

And they always wanted to do business in India so they finally decided then

they left their job without knowing what they will do further

So they started a company "Cinema box" which will provide Cinemas in buses like Volvo do where people can watch movies and all

And for that, I have to give money to buy the subscription

there was a person name "Raghav" who was working on an application company called "Buggi"

He was a technical person and that company made applications for auto and rickshaws

Thorugh that application you can book auto and rickshaw like you book Ola and Uber

Now they all met through one common friend and start working together

then they realized their business is not long-lasting and they can't huge revenue out of it

But they had a big dream so they shut down the company within 6-8 months

Both the company was shut down and then they all invested s10 lakh total and start a new company called "urban clap"

In 2014 December they all decided to build an application and they started it with a simple idea

Basically, the Urban clap is a service providing application

From this app, I can apply for any service like a salon, music classes, carpenter, electrician and all

When they came to India they realized the need of the market and finds out how difficult it is to find electrician, plumber and all

So they built an application where you can hire these kinds of people

And their business model is simple like everyone has. They earn from leads and commission

But think how difficult it will be or you to make money if you fully rely your business on Plumber and electrician

You will hardly able to 100 rupees per lead and ultimately your business will be at a loss

So, In starting they focused on big services

Like makeup artist, wedding photographer, interior designing and all where the sale price is around 1 lac

They have covered 107 services from A-Z

They are operating in 8 cities and now let's talk about funding, competitors and all

I was just trying to simplify the business model first for all the people

The competition started to increase after they launched their platform

infact after one month, big startups launched like house joy and all

Nobody explored this market before but then they realized the competition is increasing day by day

SO they started to tie up with different service providers like electrician, plumbers, artist and all

Then they got seed investment

The company named "SAIF" promised them to give seed investment

They promised to give 1M$ but funding was given after 4-5 months

During that period they found one another partner "ASL Group" so totally they got 10 crore funding in initial days

Now big founders like Snapdeal CEO and all realized the potential of this startup

So, they also gave some funding to urban clap

And after getting funding after some time they again raise 10M$ as funding

They asked for funding because they wanted to expand themselves to other cities as well as

Till November they again raise 25M$ funding

They were continuously getting money because of their good business model

And their targeted niche was also which just started like the time when Flipkart was booming

Everyone's was like Urban clap will be like next Flipkart so they invested a lot

In 2015 again something big happened and that is Ratan Tata also invested in this company

The amount is not disclosed yet but he invested

Along with investment Ratan Tata also helped in growing the business by making strategies and all.SO everything was going fine

But things were not easy company named "House Joy" raise funding of rupees 150 crores from Amazon India

And the backing of both these two companies are very strong

After research, I found that more than 260 startups were launched in this hyper niche

Everyone was trying to enter in this business because Urban clap was raising funding continuously

People start doing work in micro-niches as they will only provide makeup service, salons service, etc.

Normally they charge 10-20% of commission from each user

let's suppose if I want someone for website development then I will have to pay a 20% commission but basically, it varies from 10-12% easily

One thing that they are doing good is they reject 75% of users request

On their application, they don't accept everyone's request they only focus on quality users

They will judge you on behalf of some parameters

According to them, they have more than 1.5 lac vendors

They have a team of 320 people and they get daily 7-8k request

Which goes from 400 to 1 lac

they say average amount goes to 3k-4k on a daily basis

Now let's try to calculate and see how much they earn

they earn 17.2 lac daily, 5.02 cr monthly and 64 cr yearly

now let's find profit and assume they charge 20% commission

They charge according to the services although they have other businesses also so let's assume they charge 20%

and according to 20%, they earn 12.5 cr

staff members are 320 and lets suppose each get 30k so 7.6 cr goes to salary

After cutting all the expenses like marketing cost and all so the company should be at a profit

Gradually company awareness will be increase still many people don't know about the urban clap

Once the market share increases the company revenue, sales and profit will ultimately increase

Last year the company was at a profit

Last year Urban clap had 3 cr of revenue with 6 cr loss

This year they earned 62.4 cr of revenue according to numbers

Now, there are high chances that the company will come into profit

Their next business model is selling leads

I have told you about India mart business model

For example - You apply for request in Urban calp that you need a beautician or a makeup artist for an event

So they sold your request

So let's suppose there's a wedding photography service cost 2lac

They have also recharge option where you can buy your credits

Basically, there's a system of selling and buying leads

They are earning through commission and selling leads

Along with that they also earn through an advertisement, for example, the user gives them money to list himself on the top

There's a subscription-based model for this. So they are earning through three sources ultimately the company will be at profit in future

But the point is a competitor may destroy the market

Maybe people entered into small niches and start offering discounts and all

I am taking an example of beauty because according to them their most of the revenue comes from beauty niche

65% of their revenue comes from the beauty

If someone starts just on beauty and start offering discounts and all then maybe their beauty business reduce

Basically, they have to protect themselves from other companies but their business model is good

Now let's take an example if a beautician works in a parlor so 80% money goes to the parlor and 20% goes to the beautician

But with an urban clap, there will be reverse game 20% will go to the application and 80% will go to you

SOo that's it I hope you like this video don't forget to comment and share with your friends

Bye good morning and goodnight whenever you are watching this video