UrbanClap Raises $10 Million, Local Services Startups In Sweet Spot For Investors

Funds are not a problem if you are a Indian startup providing local utility services such as electricians, plumbers and personal tutors.

The latest to raise funds is UrbanClap, a mobile-only local services marketplace, that got $10 million (Rs 64 crore) from investors SAIF Partners and Accel Partners. The company had earlier raised Rs 10 crore in April, in which Snapdeal founders Kunal Bahl and Rohit Bansal had also invested.

UrbanClap has company. Banglaore-based home services firm Zimmber also raised Rs 2.5 crore from InMobi's founders including Naveen Tewari and Mohit Saxena.

Twenty four startups have launched in the local services business since 2013. The existing market is largely fragmented and unorganized with lots of small players with barely any guarantee of quality service. "Local sercices are a very big market and pain point for the India consumer. There is high level of non-standardization of srvice quality, pricing and supplier base. The market is ripe for disruption," said Mukul Singhal, principal at SAIF Partners.

The market size is huge, at around $100 billion. And that has attracted both founders and investors. In the last one year, a bunch of companies have raised funds to tap this market.

TaskBob raised $1.2 million from Orios Venture Parnters and Mayfield India. Mumbai-based LocalOye got $5 million from Tiger Global and Lightspeed in April. Matrix Partners has invested in Housejoy, which was incubated in K. Ganesh's incubation unit GrowthStory in Bangalore. Gurgaon-based FindYahan, a location-based lifestyle services marketplace, raised an undisclosed amount in second round funding from The Phoenix Fund.

Apps such as UrbanClap are moving beyond blue-collared services into providing photographers, interior designers and personal tutors, which has allowed them to capture more of the unorganised market which has a high utility value for customers.

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