We Got Funded: Washmen Raises US$6.2 Million In A Series B Round
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Washmen, a Dubai-based startup streamlining dry cleaning and laundry services, has successfully raised US$6.2 million in a Series B round. The investment round was led by international VC fund AddVenture, and joined by Germany-based chemical and consumer goods company Henkel, Lebanon’s Cedar Mundi Ventures and B&Y Partners, and the UAE’s Clara Ventures. The new capital infusion will be used to expand the startup’s presence locally and drive its growth.
Launched in 2015 by Rami Shaar and Jad Halaoui, Washmen was founded with the intention to eliminate the need for a washing machine from UAE homes. The startup kicked off its operations by partnering with logistics partners and high-quality laundromat facilities to pick up, clean, iron, and deliver laundry as fast as the next day after it was brought in, for a price that was at least 20-30% less than what premium services tended to charge. A wash and fold service (priced per bag) was later added to its portfolio, thereby allowing customers to fully outsource their laundry. “Since that kind of operation didn’t exist in the local market, we had to build our own facility in order for that offering to scale across Dubai and Abu Dhabi with the quality and hygiene customers expect,” co-founder and CEO Shaar remembers.
According to Shaar, Washmen currently serves over 30,000 individual customers and processes over 300,000 items a month, with two current facilities (its latest is a new 300,000 sq. ft. facility in Dubai) to both wash and fold, as well as clean and press items. By building their own facilities, the co-founders believe they have gained an edge in their operating model: “This allows us to better capture margins, reinvent that into the business, and keep prices affordable- the objective remains to replace the need for a washing machine at home.”
And with the new investment and investors in and out of the region, the co-founders are confident on their new partners’ extensive knowledge to help their startup’s scale across geographies. “We intend on utilizing the R&D of our partners extensively, in order to improve our quality and widen our service offerings.” A noteworthy feature the startup also administers today is its recycling program, wherein customers’ recyclables consisting of plastic and paper waste can be gathered in a Washmen bag, which is then collected by the company.
As the startup continues to grow, Shaar says he and his team are focused on staying true to Washmen’s primary offering, which is its “convenience, reliability, quality, affordability, and the ease of payment it offers,” basing their strategy on customer retention more than acquisition- which they admit is a challenge that becomes more difficult as the startup scales. “We understand how hard it is to acquire- losing a customer is a waste of effort and money. Retention is a function of our product, and so is building a better product that will minimize frictions for customers, as well as our operations.”
And with a continued goal of establishing itself as the go-to trusted laundry and dry cleaning brand in the UAE, the cofounders continue to work on “making transparency and quality staples of our operation and reputation.” Onward and upward!
Washmen co-founder and CEO Rami Shaar shares his tips for entrepreneurs looking to raise funds for their startups
1. Do it early
“Start raising early– and stay focused on your business metrics throughout the long fundraising process. Your past performance is not enough.”
2. Stay determined
“Be patient, and choose the time you invest into each investor carefully. Some investors have specific investment theses, or focus on specific industries. Other investors are generalists. Don’t take any feedback personally, even if it feels personal. Be self-aware in knowing who your business is attractive to. You also need to be flexible in accommodating different investors’ requirements, while making sure you have harmony among your shareholders.”
3. Prepare for the unknown
“Raise more than what you think you need. Scaling your business has a lot of unknowns– you don’t want to be too worried, because you need to make an investment into something you find out is crucial for your business, and haven’t accounted for it. You also want to be able to test ideas out.”