If there’s one thing likely to cause fear amongst European startup entrepreneurs, it’s when Rocket Internet — the Samwer brothers’ incredibly well-funded German startup factory — enters a burgeoning market. That’s just happened for the on-demand laundry space with the launch of Rocket Internet-incubated ZipJet, which now competes with a number of young and less well funded startups who are battling it out in London to become the ‘Uber for laundry’ — yes, I did unashamedly type those words.
It’s also the third service-style startup launched by Rocket in the U.K. capital city in recent months, joining self storage service SpaceWays, and food delivery service EatFirst.
In what looks unsurprisingly like a straight-up clone of U.S.-based Washio — which this June raised a $10.5 million Series A round — ZipJet provides an on-demand laundry service, currently targeting the more central (and lucrative) parts of London. You can book various laundry services via the startup’s iOS and Android app, with ZipJet’s team of ‘Pilots’ picking up and dropping off your washing and promising a 24 hour turn-around. As an example of pricing, the startup charges £12.50 for a single bag of laundry, or from £1.75 per shirt. There is, however, a minimum order of £25 to help scale the model.
That’s because, as I understand it, margins for laundry are extremely small, especially when you factor in delivery costs and the fact that any company strictly employing the ‘Washio model’ doesn’t actually process the laundry itself but relies on partner wholesale laundry providers who, unlike in the U.S., are to be found on the edges of town and certainly further afield from where the majority of customers are. In other words, it stands to reason that an ‘Uber for laundry’ will need to wash a heck of a lot of clothes or consistently up-sell to pricier services to make this model work.
Along with traditional bricks ‘n’ mortar dry cleaners, startups in London who compete with ZipJet include Ignite100-accelerated Washbox (currently raising a seed round), Spyn (who I understand will close its first funding round this month), and ihateironing.com (which just secured a £120k investment from Blue Wire Capital). The latter partners with local dry cleaners who handle collection and delivery, but under the ihateironing brand. There’s also LaundryRepublic, which operates a 24-hour “locker-based laundry and dry cleaning service”, which negates the need for a customer to be home for pickup and delivery.
Interestingly, soon-to-launch Lavanda deviates furthest from the Washio model, using a network of hyper-local self employed ‘Lavanda Pros’ who undertake either/or both the delivery and laundry itself. They are provided with any specialist equipment and training, and undergo the required labour in their own homes. Co-founder Guy Westlake (who was peviously Shutl’s Head of Marketing) tells me Lavanda Pros are typically work-from-home mums or people, such as child carers, who are already doing laundry as part of their job.
The model reminds me of what’s happening in the domestic cleaning space with startups such as Hassle and U.S. competitor Homejoy.
Westlake also believes passionately that a Washio clone will be a very hard nut to crack in the U.K., due to the complexity of the logistics side of the business. Given his experience at Shutl, the same hour delivery startup acquired by eBay, I’m inclined to listen.
On the entrance of Rocket Internet into the space, he had this to say: “Following the success of Washio in the U.S., we always expected the U.K. laundry space to be hotly contested. By contrast our service is deeply rooted in the local community, creating meaningful value on both supply and demand sides of our marketplace, and providing the business with a powerful hyper-local marketing tool.”
Meanwhile, Max Russell from Washbox, tells me: “We can see competition in Rocket Internet, however we have been operating for the past 8 weeks gaining both traction and awareness and have overcome the logistical and cleaning problems that they will face. The cleaning facilities they will be using will have a multitude of teething problems whereby they will struggle with demand and so both quality and timekeeping will suffer.
“They operate between 8am-8pm which does not provide the customer with the level of on-demand that they require. A huge % of our orders are scheduled for before 8am and after 8pm as people can commit knowing that they will be at home. They also offer 0.5 hour timeslots which we now understand with London traffic is incredibly tricky to do unless on mopeds.”