Merchant Innovation

Laundry Service Rinse Raises $3.5 Million

The dry cleaning business as we know it is changing. We have seen the rise of Cleanly, FlyCleaners and Washio, which all have similar business models: streamlining laundry delivery using a smartphone app.

San Francisco-based Rinse wants to take it a nudge further, as it convinced investors to pour another $3.5 million in seed money into its business. This is much more than YC-backed and New York-based Cleanly, which closed a $2.3 million seed round in May. Rinse co-founder and Chief Executive Ajay Prakash, known for providing all W-2 workers with benefits, wants to help build his workforce and expand Rinse services to Los Angeles, according to TechCrunch.

The funding comes from VC firms such as Arena Ventures, ff Venture Capital, Great Oaks Venture Capital, Accelerator Ventures, MESA Ventures, Expansion Venture Capital, Rothenberg Ventures, Base Ventures, Structure Capital, Otter Rock Capital, and fashion industry angel investors.

As mobile penetration continues to grow, the dry cleaning business is expanding its reach to new customers weary of taking the time to look for a laundry place. The target customer here is no other than the popular and tech-savvy millennial customer.

Mobile distribution in general is growing fast nationwide. Washington, D.C. residents, for instance, can (theoretically) enjoy a Bud Light from the comfort of their own homes with just the push of a button on their smartphones. And Starbucks is testing coffee delivery in Seattle and New York City this year with two pilot programs.

When it comes down to the laundry business, the success of these startups caught everyone off guard, but it’s not that surprising. Virginia-based research firm BIA/Kelsey estimates that the dry cleaning, laundry and coin-operated services industry is worth $26.5 billion in the U.S., reports The Wall Street Journal. The question is whether one company will actually rise above all the others. The service is so dependent on its geo-location as well as flawless and smooth interaction with the customer that it’s difficult to imagine a one-size-fits-all nationwide model.

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Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. The September 2019 Mobile Order-Ahead Tracker, serves as a monthly framework for the space. It provides coverage of the most recent news and trends as well as a provider directory that highlights key players across the mobile order-ahead ecosystem.

 

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