Urban Company Ltd reported a sharp swing into losses in the October–December 2025 quarter (Q3 FY26), driven primarily by aggressive investments in its quick-help services vertical, InstaHelp. While revenue growth remained strong, rising costs linked to rapid expansion pushed the company into its second consecutive quarterly loss since listing.

Key Highlights at a Glance

• Revenue: ₹382.68 crore, up 32.9% year-on-year
• Net loss: ₹21.16 crore (vs ₹231.84 crore profit in Q3 FY25)
• Previous quarter loss: ₹59.33 crore (Q2 FY26)
• Primary drag: InstaHelp expansion costs
• Management outlook: Losses expected to continue in the near term

InstaHelp Emerges as the Biggest Profitability Challenge

Launched in March 2025, InstaHelp offers on-demand household assistance such as cleaning, sweeping, mopping, and basic domestic tasks. While the service has seen rapid adoption, it has also become the single largest drag on Urban Company’s consolidated profitability.

During Q3:

• Net Transaction Value (NTV) jumped to ₹28 crore, nearly tripling from ₹10 crore in the previous quarter
• Adjusted EBITDA loss for InstaHelp widened to ₹61 crore

Urban Company acknowledged in its December quarter shareholder letter that stepped-up investments in supply build-out, workforce onboarding, and market expansion will keep the consolidated business loss-making for the next few quarters.

“The InstaHelp opportunity is significant and immediate, and we are committed to maintaining clear market leadership,” the company said.

Despite near-term losses, management believes loss per order is steadily declining, even if the pace of improvement slows.

Management Guidance: Profitability Expected by FY28

In a post-earnings call, co-founder and CEO Abhiraj Singh Bhal said profits from Urban Company’s core businesses are expected to offset InstaHelp losses by Q3 FY28.

Importantly, Bhal emphasized that this breakeven point would be:

• Sustainable, not seasonal
• Driven by structural margin expansion rather than cost cuts

He added that while quarterly margins may fluctuate due to seasonality, year-on-year trends provide a more accurate picture of financial health.

India Consumer Services Remain the Revenue Backbone

Urban Company’s India consumer services segment continued to anchor overall performance.

• Revenue: ₹265 crore
• Growth: 26% year-on-year

The segment connects users with professionals across beauty and wellness, repairs and maintenance, cleaning, and home improvement services.

Growth Drivers

• Steady new user additions
• Strong festive-season demand
• Higher repeat usage in core categories

According to Bhal, margins in this segment are expected to improve steadily:

• FY26: Slightly ahead of FY25
• FY27 onward: Continued margin expansion

He described India consumer services as one of the “big drivers of profitability” going forward.

Native Products Segment Sees Fastest Growth

Urban Company’s Native (products) segment delivered the strongest growth across all verticals.

• Revenue: ₹62 crore
• Growth: 101% year-on-year

Demand was led by:

• Water purifiers
• Electronic door locks

While growth moderated sequentially after large e-commerce sales in the previous quarter, management noted:

• Improving margins
• Narrowing absolute losses
• Early signs of scalability

International Operations Gain Momentum

Urban Company’s international business—focused on the UAE and Singapore—reported robust growth:

• Revenue: ₹50 crore
• Growth: 79% year-on-year

Expansion was supported by:

• Broader service offerings
• Improved customer acquisition efficiency
• Rising urban adoption in overseas markets

Bhal said international operations are expected to “grow profitably and continue to compound”, reinforcing their role as a long-term growth lever.

Competitive Landscape: Rivals Raise Aggressive Funding

Urban Company’s push into quick domestic help services comes amid intensifying competition.

• Snabbit has raised over $56 million so far, including a $30 million round led by Bertelsmann India Investments
• The company is reportedly in talks to raise $100–120 million at a valuation of $500–550 million
• Pronto, founded in May last year, has raised just over $13 million, backed by General Catalyst, Bain Capital Ventures, and others

The influx of capital highlights growing investor confidence in India’s on-demand domestic services market, but also signals rising pressure on margins and customer acquisition costs.

The Bigger Picture

Urban Company’s Q3 results underscore a familiar tech-enabled services dilemma: balancing rapid expansion with profitability. While InstaHelp is weighing heavily on near-term earnings, the company remains confident that its core businesses and international operations will deliver sustainable profits over time.

For investors and industry watchers, the key question isn’t whether losses will continue they will but how efficiently Urban Company can convert scale into durable margins before competition intensifies further.