Laundryheap is a fast-growing laundry and dry-cleaning service with delivery.
We believe that we are unique as we are the only major on-demand laundry company to our knowledge that offers same-day collection and delivery within 24 hours as a standard service.
Starting in London, in only 3 years and with no external funding, we have already expanded to Manchester, Birmingham, Dublin and Dubai.
We are following the steps of companies like Uber and Deliveroo, bringing existing industries to the booming 'on-demand economy'.
Customers can book directly on our website or via our iOS and Android apps, with just one click. They have the option to track their driver on a map in real time, which makes the experience incomparable to traditional laundry and dry-cleaning services.
We believe that this is a highly scalable model, as we are working with third party facilities for the cleaning and with self-employed drivers for the deliveries.
We estimate that it takes over 11 hours a month to do laundry and ironing alone. Combined with dry-cleaning - bringing the clothes to the local shops, trying to arrive there before closing times and endless queuing - the hassle is immense. Even worse, high street dry-cleaners can require 2-5 days to actually clean the clothes.
Laundryheap, on the other hand, operates until 11pm every day, Monday to Sunday, collecting directly from customers’ homes in suitable time slots. Everything is processed overnight, which allows us to complete all orders within 24 hours, offering a convenient and flexible solution.
This allows our customers to enjoy more free time, while making sure their clothes are cared for, all at affordable prices.
Substantial accomplishments to date
Bootstrapped 3 years ago, and with no external funding, we have achieved some remarkable results:
► Already profitable, with a substantial growth in gross revenue:
‣ 2015 - £265,000.
‣ 2016 - £1,320,000.*
► 84% growth in B2C monthly active users as of May 17.
► 150,000+ deliveries done.
► Available in 5 UK cities - London, Manchester, Birmingham, Coventry & St. Albans, and 2 international cities - Dublin and Dubai.
► We estimate that we have processed over 2 million items of clothing.
► Our Trustpilot score is “Excellent” (9 out of 10).
► We have a strong and committed international team of 15 already. We aim to grow the team to 35 people by the end of next year.
► In 2015, we launched the B2B branch of the business, and have regular orders from this side of the business.
* source: unaudited management accounts.
We charge our customers once the order is processed. After the cleaning and the delivery costs, we achieve a gross margin of about 30%.*
A very lucrative business model:
► High percentage of returning customers and high frequency of orders (an active customer typically places more than 1 order a month).
► Long customer lifespan (our most loyal customers have been with us for over 2 years and placed 100+ orders).
► Replicable internationally (already proven by our operations in Dublin and Dubai).
We look to use a selected number of professional facilities to maintain a high level of quality in each of the areas we operate in, and we contract our drivers. We believe that this model offers more flexibility, allows us to keep the costs low, and at the same time, enables us to scale easily.
We are profitable on each order, and as of August 2016, the business is breaking even as a whole, and we believe there is great potential for substantial returns.
*source: unaudited management accounts.
Use of proceeds
So far, we have been investing in the business and have managed to expand internationally by own strength.
Now, we have reached a point where organic growth means we would lose out on many time-sensitive opportunities that cannot be developed without an increased financial input.
Specifically, there is no large international player on the market that we know of. We believe that an aggressive expansion strategy in Europe will position us as a global market leader within 12 to 24 months.
The funds raised in this campaign will be used in three main areas:
► Improve the user experience (specifically in our mobile apps).
► Continue our international expansion (6 new cities by end of 2018).
► Further develop the team.
Please note that the Company has an agreement for further investment by an anchor investor upon reaching certain milestones. Should those milestones be met, this will result in a further investment into the Company up to 28 February 2019 totalling up to £1.5m, on the same terms and price as this current round. Investors in this round will not have the opportunity to pre-empt on those further tranches.
Our main target group is 25-40 year old ABC1. Other interesting groups for us are new parents, elders, tourists and students.
A major opportunity on the market is represented by businesses that require the service on a regular basis, such as: Airbnb flats, restaurants, bars, hair salons, and more. These contribute to a lower order value, but as they are likely to have significantly more frequent order behaviour, we expect that the lifetime value will be larger.
Characteristics of target market
The British dry-cleaning market exceeds £2 billion with annual growth rates of around 4.2% (2012-2017) made up of more than 3300 businesses.
Along the way, we have observed a shift in consumer patterns, with customers now looking for more ways to save time. More and more services have emerged to service this trend (in different areas including food, beauty, health, transport, etc) which has resulted in the ascent of large companies like Uber and Deliveroo.
Our experience suggest that dry cleaning is still mostly done offline, which means now is the best time to explore this great opportunity and focus on building an even stronger presence in this new, fast-growing market.
Our marketing focus is on acquiring quality leads that stay with us in the long term and have a high lifetime value. So far, we have tested different channels, understanding what works best with our business. We have identified these and we are now ready to fuel them further.
We think that online marketing still represents the strongest area for us, and we will continue our efforts to develop it even more. The two main channels would remain Google AdWords and Facebook, where with a larger budget we can build a stronger presence. SEO will also remain one of our primary focus areas.
Since we already have a large group of happy customers, we would like to build referral and loyalty programs.
Our recently built B2B sales team will be further strengthened with the help of this investment. We have a large target list already, and we will use it to convert more quality leads to actual customers quickly.
We believe that offline marketing would also be a channel that will convert well for us, so we will explore this area in the upcoming months.
Laundryheap has done exceptionally well to compete in this fast-growing segment of the on-demand economy. Although we had no outside funding, the strategy was and is to achieve operational excellence, before intensively focusing on international expansion.
Here are a few things that differentiate us from the competition:
► We are the fastest to our knowledge: we believe that same day collection and 24 hours turnaround provide the best value to the customer. There is no other major competitor we know of that has managed to offer this as a standard service on all markets we currently operate.
► We are easy to use: we don’t ask our customers to count and list the number of items, making us one of the easiest services available.
► We are focused: without any external funding we’ve built a great team and created an international company with significant revenues, which is proof of our ability to stay focused and deliver.
► We are adaptable: we see lucrative opportunities on the market, and aim to quickly explore them and take action. Also, we have managed to expand in different locations, adjusting the service in order to fit in each cultural and economic environment.
► We are agile: we use on-demand drivers to keep our unit costs low and our business flexible.
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