Mom-and-pop stores and franchises — mostly offline — account for 95% of the laundry market in South Korea, according to Laundrygo CEO Sung-woo Cho. But his South Korea-headquartered startup aims to digitize the laundry industry in the country. why? Through a mobile app that allows users to order laundry and dry cleaning pickup within 24 hours. The outfit operates a laundromat and state-of-the-art facilities to handle washing and drying.
Investors love the idea. Laundrygo said today that it has closed a $37 million (49.5 billion KRW) Series C funding round led by private equity firm H&Q Korea, along with returning investors SoftBank Ventures, Altos Ventures and Aju IB. New investors such as KB Securities, Hanwha Securities, Badgers Investment and Pebble Investment, and Korean fashion platform strategic investor Mucinsa also participated in the round.
According to the sources, who spoke on condition of anonymity because the terms of the deal are confidential, the post-payment estimate for the startup has now reached $254 million (350 billion KRW), up from $110 million (150 billion KRW) in September 2021. Laundrygo declined to comment on it, but Cho confirmed that the Series C funding will bring a total of about $73 million in equity and about $14.5 million in debt financing.
Cho, a serial entrepreneur, launched Laundrygo, an on-demand B2C service, in 2019. Cho previously founded Baimin Fresh, a food delivery service platform that was acquired by Woowa Brothers, operator of Baidal Minjok, a food delivery app. 2015.
He says the company’s inspiration came from an unlikely place. In the year After resigning as CEO of Bemin Fresh in 2017, Cho traveled to America to rest and recharge. While in the United States, his rental car was stolen in downtown San Francisco.
“The thief broke the window and stole all my stuff, but I didn’t take my laundry. I put it in an Amazon hot bag,” Cho said. “Ordering and delivering laundry services via an app might be safer than I thought, even if a thief doesn’t want to do laundry,” he thought.
He quickly set to work on his idea, arranging meetings with laundry professionals on the East Coast and visiting laundry factories in New York.
Laundrygo currently operates three main businesses: laundry and delivery services via the app (Laundry), B2B laundry services for hotels (Laundry Business) and laundry services (Laundry24).
The start-up operates a laundry mending service, LaundryX, and has built its AI-powered laundry screening system, which automatically identifies laundry items. Cho told TechCrunch that the laundromat not only allows users to wash and dry their clothes using washers and dryers, but also has a touchless dry cleaning machine that customers can use in the bathroom.
The Series C round will help the startup advance its state-of-the-art factory technology and invest more in its laundry business, which Cho expects to grow, partly due to rising labor costs.
The laundry has plans to expand geographically. While it has opened its 100th laundromat in South Korea, it plans to open its first laundromat, 24, in New York early next year. He is also weighing a trip to Japan. Indeed, Cho sees ample opportunity from the global online on-demand laundry market, which is projected to reach $128.5 billion by 2026, up from $18.7 billion in 2019.
Additional acquisitions may also be on the horizon. Last year, for example, Launderigo acquired US-based laundry solutions company A+ Machinery to enter the smart factory business.
All cleaning is now done in-house at Laudrigo’s Smart Factory, which allows the company to handle every step, from picking, cleaning, sorting, folding and delivery. On top of that, Laundrago claims to have developed an environmentally friendly soap.
Cho said the outfit — which has picked up two other businesses in the past two years — will continue to gain if other laundry-related companies can form alliances with Laundrygo. (He indicated that he would be interested in finding a company that treats clothing sustainably or that analyzes clothing or clothing materials and determines their optimal wash cycle.)
Launderigo said that he built the service to gather information about brands, materials and laundry information, and said that this information should enable the startup to grow its business.
Currently, according to Cho, Laundrygo reached 4.4 billion won ($3.3 million) in sales in October, more than 20 times what the company saw a year ago. With more than 130,000 users and more than 500 employees in South Korea, the company has tripled its annual sales since 2021.