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Two By Two Fri, 16 Jan 26 |
An abridged, narrative version of the latest episode of Two by Two, The Ken’s premium weekly business podcast. |
Can Urban Company avoid Bigbasket’s fate?. Slicing up a horizontal giant one category at a time
| 4 min read |
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The energy in the Spacebot studio in Indiranagar on a sunny 10:30 morning was buzzing. It was more than just the usual pre-recording rush. The guest for this episode was not only a repeat visitor to Two by Two, but also a college friend of PGK from 25 years ago.
Introduced by Rohin as someone who is “unafraid and candid”, Arpit Agarwal truly took the discussion home. Arpit is a partner at Blume Ventures and is just a month away from completing 12 years at the firm. His perspective turned this episode into a deep dive of one of the most viral topics in the startup world today: the vertical disruption of Urban Company (UC).
The rise of the ‘brocery’ store
The conversation began with how Zepto changed the game for incumbents like Bigbasket. PGK had a specific name for its early version.
Praveen Gopal Krishnan: “I called Zepto a ‘brocery’ startup. I said that it’s basically a startup that’s targeting bros with all bro-kind of stuff. It was like, ‘Do you want cigarettes in 10 minutes? Oh, okay. Do you want Diet Coke or condoms in 10 minutes? Sure, why not.’”
From my perspective, there is a lot of truth in that. Hanging out with friends has really become that much easier. We can now order drinks, chips, and the never-say-no ice cream sandwich all while chatting at home. We do not have to pause the conversation to go to a store anymore.
But Rohin noted that this was about more than just convenience for “bros”. It was a fundamental attack on how we buy essentials.
Rohin Dharmakumar: “The real company or the real opportunity that Zepto saw and disrupted was Bigbasket… it was essentially the pre-scheduled perishables, grocery, vegetables, fruits, etc., which people were used to buying once a week in a predetermined slot.”
Can a dragonfly kill a sloth?
This same logic is now being applied to Urban Company, a listed giant. Startups like Snabbit and Dazzl are driving wedges into UC’s most profitable categories. Snabbit has raised $56 million in just a year and a half, while Dazzl recently secured $3.2 million to target the beauty and massage segments.
And just as I wrapping up writing the newsletter, I got to know that apart from raising capital, Snabbit is also actively consolidating the market. The founding team of Pync, another startup in the on-demand home needs space, has joined forces with Snabbit to lead their operations.
When I think about calling someone home for a massage or a beauty service, I have always thought of Urban Company. Their marketing and advertisements made them a household name. But for a long time now, these specialised sub-parts have been coming up.
For me, downloading a new app is not the issue (unless you have storage problems); I look for efficiency. I want someone who can come the fastest. It is not always because I am running late, but because it is convenient. If a specialised app can get someone to my door faster than a horizontal giant, will I remain loyal to the bigger brand?
Arpit used a vivid analogy to explain why being big can sometimes be a disadvantage.
Arpit Agarwal: “One can imagine that a largish company is a sloth. Maybe a large sloth… But a new company would be very small like an insect but very fast running like a dragonfly. It moves much faster than a sloth can ever move… A larger company is always waiting to be disrupted.”
The 11-minute equilibrium
I spotted these posters on my walk back from the studio. The “house help in 10 minutes” promise is everywhere in Bengaluru right now. But given the recent regulatory pushback on time guarantees, Snabbit will have to change each and every one of these posters (and they have a lot of them).
And Rohin, being the good citizen he is, reminded everyone during the discussion that we cannot officially say “10 minutes” anymore.
Rohin: “I propose that all 10-minute delivery services call themselves 11-minute delivery services… 10 minutes will become 11 minutes and then 11 will become 12 minutes, so I don’t know what the equilibrium is.”
Personally, I think we will see a shift toward more vague, yet effective, language. Much like how Bistro by Blinkit promises delicious food “in minutes”, I think companies will stop using specific numbers. When you hear the word “minutes”, you already know it means fast.
Is the slotted model of home services about to be replaced by the instant model? And what happens to the quality of service when speed becomes the only metric that matters?
Arpit’s take on “cooks in 11 minutes” and the future of the gig economy might change how you look at the apps on your phone.
You can listen to the full episode here.
What do you think? Would you switch to a new app just to save five minutes on a home service, or does the trust of a big brand like Urban Company still win? Comment below or write to us at [email protected].
Until next week,
Uddantika
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Uddantika produces The Ken's subscriber podcasts Two by Two and First Principles. A journalism graduate from OP Jindal Global University, she's interned across editorial, video, and radio at Burda Luxury (Lifestyle Asia), The Print, HT Media (Fever FM), and ZEE Media.
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