In 2016, Oisin Hanrahan (Handy’s CEO) advocated for the roll-out of a new online boarding process that offers customers self-service. However, although his plan would eventually lead to profitability while reducing the company’s monthly expenditure, it was still a risky move that was opposed by his partner Umang Dua. In the end, the company agreed to do a test run to see how the program would perform.
In November 2015, Handy raised an additional $50 million in funding. Although the company had a financial cushion heading into 2016, Hanrahan and Dua worried about whether they would be able to raise future funding in their business category. The two realized that they needed to use the funds to drive the company into profitability as opposed to funding growth into new markets.
Handy Focuses on Profitability
At the time, Handy had already expanded into 28 markets around the world and faced no serious competition since it had already acquired Exec and Mopp, while Homejoy a third rival had shut down operations. Naturally, it was open season for a startup like Handy to want to expand and consolidate new markets around the globe.
Handy.com chose to halt its expansion program and focus on strengthening the 28 markets it already operated in in order to turn a profit. This was one of Handy’s most important decisions since, by the third quarter of 2016, the company already posted gross profit margins in all of its 28 markets. Furthermore, Hanrahan expected that the company would turn profitable by the second half of 2017.
Today, most of the company’s growth is organic or perpetuated through referral channels. Thanks to its new self-service online boarding program, Handy’s average cost of acquiring new customers has dropped by 33 percent while discounted bookings have dropped by 4 percent. Umang Dua believes that Handy will raise more capital in future but from a position of power, not desperation.