Accel Ventures: A New Chapter in India’s Startup Ecosystem with Urban Company’s IPO
Accel, the renowned Silicon Valley venture capital firm, is poised to reap significant rewards once again, this time through its early investment in Urban Company. As the tech-enabled home services marketplace prepares for its much-anticipated IPO, valued at ₹1,900 crore, Accel stands to gain immensely from its strategic backing.
A Profitable Investment
According to the red herring prospectus (RHP), Accel India holds 14.56 crore shares in Urban Company, translating to a 9.9% stake on a fully-diluted basis. With an average acquisition cost of just ₹3.77 per share, the firm is sitting on a staggering profit of ₹1,445 crore, assuming the IPO pricing of ₹103 per share. This translates to an astonishing return of 2,630% on its initial investment.
In the upcoming IPO, Accel plans to book profits of approximately ₹390 crore by offloading a portion of its stake. Other prominent investors, including Bessemer India Capital, Elevation Capital, and Tiger Global, are also set to trim their stakes, indicating a broader trend among venture capital firms looking to capitalize on Urban Company’s growth.
A Legacy of Successful Investments
Accel’s reputation as a savvy investor was solidified with its early bet on Facebook in 2005, when the social networking platform was valued at a mere $100 million. By the time Facebook went public in 2012, Accel had reaped returns exceeding 800 times its initial investment. The Urban Company exit adds another significant achievement to Accel’s portfolio, showcasing the long-term vision that global venture investors maintain in India’s burgeoning startup ecosystem.
Urban Company: A Rising Star
Urban Company, a leading technology-driven marketplace for home and beauty services, is set to open its IPO for investors on September 10. The public offering will consist of a fresh issue worth up to ₹472 crore and an offer for sale (OFS) of up to ₹1,428 crore. The company operates across 51 cities in India and has expanded its reach to international markets, including the UAE and Singapore. It connects customers with verified professionals offering a wide range of services, from plumbing and appliance repair to beauty and wellness treatments.
In addition to its core services, Urban Company has ventured into consumer products under the ‘Native’ brand, introducing items such as water purifiers and electronic door locks. This diversification reflects the company’s commitment to innovation and meeting the evolving needs of its customers.
Financial Turnaround
Urban Company has recently reported a significant financial turnaround, posting a profit of ₹240 crore in FY25, compared to a loss of ₹93 crore the previous year. Revenue grew by an impressive 36%, reaching ₹1,261 crore during the same period. This positive trajectory positions Urban Company as a compelling investment opportunity, particularly in a market that remains underpenetrated.
Market Potential
The home services market in India is projected to grow from $59 billion in 2024 to $97 billion by 2029. For investors, Urban Company’s IPO represents one of the rare tech listings in 2025, providing exposure to this rapidly expanding sector. The anticipated growth underscores the increasing demand for reliable home services, making Urban Company a key player in this evolving landscape.
Conclusion
As Accel Ventures prepares to capitalize on its investment in Urban Company, the firm exemplifies the potential rewards of strategic long-term investments in India’s startup ecosystem. The upcoming IPO not only highlights Urban Company’s impressive growth but also reinforces the importance of venture capital in fostering innovation and entrepreneurship in emerging markets. With a promising future ahead, both Accel and Urban Company are set to make significant strides in the years to come.
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