Photo credit: Shuck..
This was a startup we’d applauded when it made it into the first batch of Google Launchpad accelerator, all ready to scale up. On-demand laundry services startup Doormint, which washed and ironed around 1.2 million clothes for people in Mumbai, Bangalore, and Gurgaon over the last two years, today shut shop.
“A truly scalable and profitable business model in laundry as an online-enabled business for mass consumption eluded us till the end. The costs of processing clothes, pick up and drop logistics, and packaging were difficult to recover through prices,” Doormint co-founders Abhinav Agarwal and Naman Lahoty said in a goodbye statement sent to those who’ve used the startup’s services.
The startup which began as a home services provider in Mumbai had raised around US$90,000 from Powai Lake Ventures and angel investor Utsav Somani in April last year. A series A round of US$3 million from Helion Venture Partners and Kalaari Capital followed a few months later in July. That’s when Doormint decided to go razor-focused on the laundry vertical instead of being a horizontal player.
The startup had then stated it was growing 45 percent month-on-month and handling 500 orders in a day. But despite several tweaks with the business model, Doormint found scaling up tough. As a result, the cash burn became unmanageable.
“In the last few months, we even set up our own processing unit to cover the last leg in the value chain. It indeed helped in quality control but costs remained almost the same. Maybe the technology of the future will allow us to process clothes at much lower costs with higher degrees of automation,” the Doormint co-founders said.
Laundry startups vs the dhobi tradition
Scene from a traditional public laundry space in India. Photo credit: Dennis Jarvis.
India with its 1.2 billion plus population is a huge market for the laundry business. Various reports peg it at many billions of dollars, most of which is disorganized. That coupled with the startup boom in India lured droves of entrepreneurs to launch over 200 laundry startups in the last two years. But the vertical came with its own challenges in India.
Most of the urban middle class employ househelp. At around US$75 a month, you could have someone come home everyday to clean, mop, and do other chores, including laundry. For example, the lady who comes to wash clothes at my house daily spends about 30 minutes in each of the three houses in my building. She goes to several buildings in a day and earns about US$400 in a month.
There is also a community of launderers – called dhobi in most Indian languages – whose traditional occupation is washing clothes. India’s huge middle class has been employing their services for generations. So most of them don’t feel the need for a professional laundry service. The startups in the space, therefore, end up catering to the smaller group of busy professionals, mostly migrants, single, and new in the city. On top of that are other issues like low ticket size, substantial pickup-delivery cost, and quality management.
“The major pain point is managing the quality when scaling up, managing the unit economics, and delivering consistent value to the customers. It’s quite a difficult task to explain to the customer the value that they get from outsourcing their laundry versus washing clothes at home. After all the efforts of providing convenience, affordability, and quick turnaround time, the customer still ends up comparing the prices with a local dhobi,” says founder of The Moustache Laundry Sameer Jain. “Scope for technology use is limited and human involvement is high.”
According to Vamsi Krishna, founder of Jet Set Clean, dealing with concerns of customers about quality of service or any damages or service disputes takes up a lot of bandwith of the laundry startups. “Most times, the damages or defects found in garments before processing are not properly communicated to the customer, resulting in mismatch in expectations at the time of delivery,” she says.
Most of these are all issues that startups find tough to tackle only after they’ve been in the business for some time and feel the growth pangs. Doormint, which emailed a farewell note to customers yesterday, was the largest among laundry startups in India.
“We will be back again in some new form very soon offering something different,” its note said, adding, “That story will be told only in time.”
See: Millions still in the bank, GoZoomo shuts shop, returns VC money. The whole story.
This post India’s largest and best funded laundry startup shuts shop. Here’s why appeared first on Tech in Asia.
from Tech in Asia https://www.techinasia.com/why-indias-largest-and-best-funded-laundry-startup-doormint-shuts-shop
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