The New Playbook: Products Meet Services in Indian Tech
India's technology startup landscape is witnessing a significant transformation as emerging companies blend products with services to create sustainable business models. Following the success stories of quick commerce platforms like Swiggy and Zomato, and electric vehicle-focused Ola, a new generation of startups including Urban Company, MyGate, HealthifyMe, and Paytm are adopting a similar approach: using services to build customer reach while selling products to generate revenue.
Leading Players and Their Product Strategies
Urban Company, which made its stock market debut on September 17, 2025, is seeing remarkable success with its home-solutions brand Native. The products business contributed approximately ₹75 crore, representing about 11% of its total revenue of ₹380 crore for the September quarter. This represents a fourfold growth from ₹29 crore in fiscal year 2023-24 to ₹116 crore in 2024-25.
According to Abhiraj Singh Bhal, Urban Company's chief executive, the company's water purifiers address a significant market gap where subscription-led adoption is proving effective. The company has also begun selling its water purifiers and smart electronic door locks on other e-commerce platforms, viewing this expansion as crucial for improving operating margins and achieving profitability.
MyGate, the gated-community security platform backed by $83.3 million from Tiger Global and Tencent, launched its smart door locks in October 2025. The company is already planning to expand into adjacent categories including security cameras and home-automation devices. While CEO Abhishek Kumar described the product business as still too nascent to disclose specific revenue figures, the company is developing a business-to-business channel by partnering with builders and developers.
HealthifyMe has taken a different approach by initially selling smart scales and continuous glucose monitors only through subscriptions but now making them available on e-commerce channels. The wellness platform has sold approximately 300,000 smart scales and 50,000 CGMs across its app and e-commerce platforms since late 2024. CEO Tushar Vashisht emphasized that hardware enables passive, continuous data tracking beyond what an app alone can capture.
Paytm is transforming its ubiquitous soundbox from a simple payment alert device into an AI-driven assistant. The financial services company is working to monetize AI-enabled soundboxes through subscription and inference fees, charging merchants for analytical and operational support services. As of September 2025, Paytm had 13.7 million merchant device subscriptions, representing an increase of 2.5 million from the previous year.
Market Positioning and Challenges
Most platforms are adopting an asset-light approach by relying on existing manufacturers and OEM partnerships rather than building products in-house. Only Paytm designs and manufactures its soundboxes at its Noida facility.
These startups are primarily targeting the premium segment of the market. Urban Company's Native RO purifiers range from ₹12,000 to ₹19,000, significantly higher than mass-market brands like Kent or Eureka Forbes that typically start around ₹5,000. MyGate sells locks priced between ₹9,000 and ₹30,000, with an average selling price of approximately ₹12,000.
According to Sameer Jain, managing director at Primus Partners, these companies are targeting people already comfortable with digital payments, connected devices, and app ecosystems where data monetization is strongest and subscription bundling makes financial sense. He noted that product-led models remain expensive to scale, prompting companies to refine the experience with smaller, high-value segments initially.
The Road Ahead for Service-Attach Models
Madhur Singhal, managing partner for consumer and internet at Praxis Global Alliance, explained that the product push ultimately aims to expand the total addressable market. It allows companies to capture a larger share of customer spending while creating stickiness and top-of-mind recall in categories where purchase frequency is low.
However, Singhal cautioned that products alone are not yet meaningfully improving overall unit economics for these companies. The current focus is on enabling stickiness and repeat usage, which indirectly supports business economics. Service-attach models haven't stabilized completely, but adoption is growing steadily across the industry.
The strategy represents a fundamental shift in how Indian tech startups approach business model innovation, blending the digital and physical worlds to build long-term customer relationships while navigating the complex challenges of hardware manufacturing, distribution, and after-sales service.
