Dharana Capital acquires shares worth Rs 400 crore in Urban Company

Dharana Capital founder Vamsi Duvvuri to join the board as Non-Executive Director

Dharana Capital, an India-focused investment firm, on Wednesday announced the acquisition of shares worth over Rs 400 crore (about $50 million) in home services platform Urban Company (UrbanClap Technologies Private Limited) through a significant secondary transaction. The shares were acquired from employees and other shareholders, making this transaction the largest employee stock ownership plan (ESOP) liquidity in Urban Company's history.

Vamsi Duvvuri, founder and managing partner of Dharana Capital, will also join the board of Urban Company as a non-executive director. The companies did not reveal if there has been any change in the valuation of Urban Company.

“Urban Company, with its full-stack approach and focus on partner enablement, has built a strong, capital-efficient and durable business in a challenging local services market,” said Vamsi Duvvuri, founder and managing partner, Dharana Capital. “We remain deeply impressed with the focus and execution of the UC founders and team. We look forward to continuing to support them in their endeavour to build a long-lasting institution.”

 

Abhiraj Singh Bhal, chief executive officer and co-founder, Urban Company, said Duvvuri has been a strong partner to Urban Company for a long time. “We look forward to working with him even more closely in the future,” said Bhal.

According to sources, Dharana Capital's transaction is part of Urban Company's secondary transaction announcement in May this year. Urban Company had announced its fifth ESOP sale, with a total secondary transaction amount of about Rs 203 crore. This sale gave the company’s current and former employees an opportunity to liquidate their vested stocks. Dharana Capital (an offshoot of existing investor Vy Capital), along with existing investors Vy Capital and Prosus, purchased these shares from employees and former employees.

In 2021, Urban Company’s valuation jumped 33 per cent in six months to $2.8 billion, after concluding the fourth ESOP sale programme of $7.3 million (Rs 55 crore).

Urban Company is tapping into the home services market, currently estimated at $50 billion in India alone. It is projected to reach $75 billion within the next five years.

Recently, initial public offering (IPO)-bound food and grocery delivery firm Swiggy also announced its fifth ESOP liquidity programme. As part of this initiative, Swiggy employees across levels and functions will have the option to receive liquidity of up to $65 million for their ESOPs.

Swiggy’s co-founders, Sriharsha Majety and Nandan Reddy, along with other employees of the firm, will be selling some shares in the company’s upcoming ESOP programme, according to industry sources. They are also doing this in the run-up to the firm's IPO.

Company shares will be sold as part of the ongoing secondary transactions where the firm is valued at $9.3 billion, according to sources.


Paytm announces health insurance for users, offered by Aditya Birla Health Insurance

One97 Communications, the company that operates brand Paytm, will now distribute a health insurance exclusive to the company’s users with a policy cover amount of Rs 3 lakh for a person aged between 18 and 35. The insurance plan will be offered by Aditya Birla Health Insurance, the company said on social media platform X (formerly Twitter).

As part of the plan, the company will offer discounts on pharmacy purchases and diagnostic lab tests. This announcement follows the launch of another health insurance plan ‘Paytm Health Saathi’ for merchants associated with the firm. “Starting at just Rs 35 per month on a monthly subscription, Paytm Health Saathi offers a range of services that includes unlimited doctor teleconsultation, in-person doctor visits (OPD) within its partner network,” the company had said earlier.