Our investment in Laundryheap — disrupting the laundry and dry cleaning industry
Home services represent a huge potential marketplace. This means a wealth of investment opportunities for VCs, and yet for various reasons, some segments of this market can appear less appealing and desirable from a VC perspective: difficulties in scaling, services operating uniquely in different geographies, ownership of physical assets, and so forth…
But at the same time, some of our daily activities remain the same no matter where we live in the world, such as cooking meals or housekeeping.
Laundry is another such example. Some people choose to do their washing at home, others rely on the laundromat around the corner. But either way, it represents time and effort provided you want to give your clothes the proper care they need. So why would we not look to save ourselves some time and hassle?
Where there is room for process improvement, there is room for a business idea.
With these thoughts in mind, we decided to take a deep dive into this market and uncovered some fascinating insights: global dry-cleaning and laundry services is a large industry valued at more than $60bn and projected to grow at 3–4% per annum. Even more interestingly — laundry nowadays is observing a huge transformation: after years of washing clothes at home, the market is shifting to on-demand services that include pick-up and drop-off, but online penetration is still low and estimated to be below 20%.
Our research allowed us to gain some clarity on the opportunity in this area, prompting us to engage with some of the most interesting market players. And right on cue, we met Deyan — founder of Laundryheap — in London at the Noah Conference in 2020 (remember that time? When we were allowed to meet other people indoors?).
I can honestly say that, right from our first meeting, I recognised Deyan as an incredible personality. He demonstrated that you can build a high quality distributed workforce — in the case of Laundryheap, it all started with six geographies — and have little to no physical assets, while managing every single process with rigour and efficiency.
COVID-19 hit as we engaged in our initial discussions, affecting everything and everyone. And yet, rather than stop the business in its tracks, Laundryheap was largely spared the devastating consequences that so many businesses have suffered during the pandemic. We resumed our conversation a month after the first UK lockdown, and to our great surprise, we were informed that they had fully recovered already. The following month, Laundryheap’s key indicators were hitting all-time highs.
Not only did Laundryheap manage to achieve total recovery in the midst of the pandemic, but the company managed to achieve growth on a global scale by entering three new markets across three new regions — the US, UAE, and Singapore. All of it while working remotely and contending with the massive uncertainty brought by Covid-19. How impressive is that?
Laundryheap is the perfect example of a truly digital company, and has proven itself more than capable of adapting to challenging external conditions — even a global pandemic. To have succeeded in expanding within a relatively new marketplace in a period like this is mind-blowing, and a large part of the company’s accomplishments has been the presence of a highly skilled and dedicated core team.
We are so glad to be part of Laundryheap’s journey, and can’t wait to travel with them on the next phase of their voyage!