Lightspeed Invests in Snabbit: The Future of Indian Home Services

The Evolution of Home Services in India

Traditionally, obtaining home services in India – encompassing tasks like cleaning, dishwashing, and laundry – has been largely an offline and unstructured process. This often led to inconsistencies for customers, including scheduling delays and unpredictable service quality. Simultaneously, workers frequently faced issues with income stability and job security.

However, a shift is underway, with startups recognizing the potential for disruption in this sector. These companies are employing technology to introduce greater reliability, scalability, and organization to the home services landscape.

Snabbit's Rise and Recent Funding

Founded last year, Snabbit has quickly emerged as a key player in this evolving market. The company facilitates on-demand booking of frequently needed home services – such as cleaning, dishwashing, laundry assistance, and kitchen help – through its mobile application.

Snabbit recently secured $19 million in a Series B funding round, spearheaded by Lightspeed, with continued support from Elevation Capital and Nexus Venture Partners. This investment, resulting in a post-money valuation of $80 million, will be used to broaden the company’s operational reach.

The Origin of Snabbit

The startup initially launched its rapid-service platform in Mumbai, India’s primary financial hub. The impetus for its creation stemmed from founder and CEO Aayush Agarwal’s personal difficulties in securing dependable home assistance.

Agarwal recounted to TechCrunch that the challenge became so acute that his mother had to travel from Kolkata to assist him in finding a suitable domestic worker.

“It struck me that in an age of unparalleled convenience – where services like ride-hailing, food delivery, and even dating are readily available at your fingertips – securing basic home assistance was surprisingly difficult,” he explained.

Strategic Growth and Operational Model

Following initial testing, Snabbit concentrated its operations within a single micro-market in Mumbai for the first year. Subsequently, it expanded to encompass seven additional Mumbai markets and one location in Bengaluru.

The company adopts a “full-stack” methodology, directly managing all aspects of its workforce – from recruitment and vetting to training, onboarding, and ongoing management. These workers are referred to as “experts” by Snabbit.

To ensure swift service delivery, Snabbit strategically positions its workers near areas of high demand, enabling them to fulfill requests within a 10-minute timeframe.

Competition and Market Dynamics

Snabbit is not operating in isolation. Established player Urban Company, backed by prominent investors like Accel, Prosus, and Tiger Global, introduced a comparable service earlier this year.

However, Urban Company’s initial messaging and the name “Insta Maids” drew criticism, prompting a rebranding to “Insta Help.” This did not fully address concerns raised by gig worker unions.

Furthermore, new competitors, including Broomees and Pronto, have recently entered the market, with Pronto securing seed funding from Bain Capital Ventures.

“The market is becoming increasingly competitive,” Agarwal acknowledged. “The emergence of new players and the influx of funding are positive developments, provided we maintain our focus on consistent execution.”

Service Pricing and Technological Infrastructure

Snabbit’s service fees range from ₹169 (approximately $2) to ₹499 (around $6) for services lasting up to 240 minutes. This pricing structure is somewhat higher than Urban Company’s Insta Help, which begins at ₹49 (50 cents).

Despite this difference, Agarwal reports continued growth and expansion even after Urban Company’s entry into the market.

Snabbit aims to differentiate itself through a consistently positive customer experience, supported by its proprietary technology stack. This includes an internal CRM system, a streamlined sourcing and screening process, and an eKYC procedure to ensure regulatory compliance.

Workforce and Sustainability Initiatives

Currently, Snabbit has over 600 workers on its platform. These workers typically cover a walking distance of 300 meters between assignments.

The company has also partnered with the mobility startup Yulu to provide e-bikes to its female workers, extending their service radius to 800 meters. Agarwal indicated plans to further reduce the average travel distance for workers as the company scales.

The average transaction value on Snabbit’s platform is between ₹250 and ₹270 (approximately $3). Workers completing a 12-hour shift earn “in excess” of ₹40,000 ($470) per month. Those working four hours daily earn over ₹10,000 ($120) monthly, with additional bonus opportunities.

Agarwal asserts that workers can earn more than the average ₹9,000 ($100) typically paid to domestic helpers in urban areas, as reported by the International Domestic Workers Federation (PDF).

Improved Conditions for Domestic Employees

Snabbit extends comprehensive insurance coverage to its entire workforce, encompassing personal life, health, and accidental protection. Furthermore, long-term employees are eligible for family insurance benefits.

Historically, domestic workers in India have been vulnerable to workplace mistreatment, largely due to the absence of robust legal safeguards. To address this, the startup’s application features an SOS function. This allows workers to immediately contact a field operations team, ensuring a response time of “five to seven minutes” in critical situations, according to the founder.

Agarwal reported that the startup has experienced a 5x growth over the past four months and is currently achieving approximately 20% week-over-week expansion. Plans are in place to broaden its reach to over 200 micro-markets within major Indian cities within the next nine months. This expansion will be supported by the recent funding and an increase in the workforce, which currently numbers nearly 100 employees.

However, numerous hyperlocal consumer applications have encountered difficulties and ultimately failed. The food delivery sector, for example, experienced a global downturn in 2023 following the easing of pandemic-related restrictions, having already begun to face challenges beforehand. Even within India, rapid food delivery services offered by platforms like Zepto and Zomato have struggled to gain traction.

The expenses associated with customer acquisition and supplier management can be substantial and often pose ongoing financial challenges. Specifically, TechCrunch reports that Snabbit’s customer acquisition cost is ₹700 ($8), while the average transaction value is around $3.

To date, the startup has registered over 25,000 customers. On average, each customer utilizes the platform at least three times per month, as stated by Agarwal.

The executive claims that their customer retention rates are comparable to those of established consumer internet companies, such as Zepto and Swiggy.

Despite this, the startup’s ability to sustain customer loyalty and overcome competition while continuing to grow and expand its presence in the Indian market remains to be seen.

Rahul Taneja, a partner at Lightspeed, commented, “Snabbit is revolutionizing the home services landscape in India by introducing speed, organization, and reliability to a sector traditionally characterized by informality.” He further stated, “We are pleased to support their mission to transform and scale a service once considered a luxury into an everyday essential.”