Helpling, the Rocket Internet-founded company that lets you book a range of home services online, is disclosing €10 million in new funding. The round was led by Asia Pacific Internet Group (APACIG), the joint venture between Rocket Internet and Ooredoo, and also includes a number of other existing investors.
According to sources, however, the new funding gives Helpling a significantly lower valuation than it attained during its previously disclosed $45 million (~€42m) Series B in March 2015.
I also understand not all of the company’s VC shareholders participated. Accel, for example, which became an investor in Helpling when it merged with the U.K.’s Hassle, is notably missing in action.
In other words, chalk this up as a ‘down round,’ and a possible reflection of how much the on-demand services space has cooled in the eyes of investors.
One source tells me it’s a tough climate to raise for any on-demand services company right now, not least in Europe where Amazon is rumoured to be launching its own home services business, following an earlier U.S. roll out.
In fact, I already know of one ex-Amazon Home Services manager who has moved from Seattle to London to take up the position of General Manager for an ‘undisclosed’ soon to launch pan-European Amazon business. Make of that what you will.
In a call, Helpling co-founder Benedikt Franke declined to comment on the company’s valuation or specifically which existing investors participated, except to confirm that APACIG led the round. He did say, however, that the new injection of cash is designed to enable Helpling to get to profitability within the next year.
“The question of funding for us is only a matter of how much money do we need, or how much money should we take on… Our core markets already became profitable during the Summer, so we do not need more money to make our core business profitable. We raised a lot of money in the past to be in that position,” said Franke.
Key to this is continuing to expand its marketplace to include additional household services beyond cleaning, and taking what the team has learned in terms of the best channels for user acquisition and how different customer segments perform and doubling down to convert more of those customers into repeat business.
The company already claims that more than 85 per cent of its business is “long-term customers who require weekly or bi-weekly cleaning”.
In January 2017, Helpling launched additional household services across 20 cities in its largest market of Germany. The range of new services includes things like window cleaning, furniture assembling and paint work.
At the time, Franke re-iterated Helpling’s long term home services play, describing home cleaning as the company’s “entry vertical,” chosen first because it is probably the most tricky to pull off in terms of both logistics and trust, but also because it forms the basis for lots of cross-selling.
Once you’ve persuaded consumers to hand over their house keys and trust a Helpling booked cleaner into the most personal aspects of their home, selling them additional home services via the same brand, app and booking process is less of a challenge. Or so the thinking goes.
Hans-Jürgen Schmitz, co-founder and Managing Partner of Mangrove Capital Partners, says in a statement: “Today, Helpling dominates the home cleaning sector in Europe. We are very excited to see the original vision of a marketplace for all major household services becoming reality. This puts Helpling in a unique position”.