Rinse, the San Francisco-based dry cleaning and laundry delivery service, has closed a $14M Series B round of funding.
This comes after a $6M Series A last year, meaning the startup has now raised about $23.5M in three rounds.
The round is being led by Partech Ventures, with participation from existing investors including Javelin Ventures, Arena Ventures, Accelerator Ventures, and Structure Capital.
Rinse was started in 2013, at the height of the on-demand boom. At the time companies like Washio (which is now shut down) offered to pick up your dry cleaning within an hour and return it the next day. But Rinse had a different model. Sticking to the belief that no one really needed their dry cleaning picked up within an hour, Rinse focused on nightly pickups between 8-10pm with standard return times (unless you wanted to pay extra for faster service).
This strategy seems to be working, as the money saved by not having to pay valets to sit around all day waiting for a laundry pick up has allowed them to expand margins and grow month-over-month revenues by double-digits since launch four years ago.
Another interesting differentiator – Rinse’s valets (who pick up and drop off your clothes) are part-time W2 employees as opposed to independent contractors like most on-demand startups used. Ajay Prakash, Co-Founder and CEO of Rinse explained this is important because these valets are often the only point of contact with a customer, and being salaried allows Rinse to invest more in training and customer service.
The startup has expanded slowly; after four years Rinse is only live in three cities (San Francisco, Los Angeles and Washington D.C). But Prakash explained that this slow growth has allowed them to focus on quality over quantity, which sets them apart from other competitors when it comes to developing a sustainable relationship with customers.
While Rinse will use this funding for general company-wide expansion, the startup does plan to grow to 10 new markets, including New York, Chicago and Boston with the goal of eventually being a nationwide service.