The start-up promises to wash your dirty clothes and deliver them to your doorstep.
For time-crunched urban Indians, grocery shopping and utility bill payments have moved online but they still have to spare at least an hour for laundry or other household chores. In January, tech-enabled laundry service UClean entered the market to lead the online shift in laundry services. It is focused on bringing the laundromat culture to India. According to Arunabh Sinha, founder and CEO of UClean, cities such as Jakarta and Kuala Lumpur have about 2,500 laundromat stores each and that helped him realise its potential in India.
However, UClean had to tweak the laundromat model to suit the Indian market where Do-It-Yourself (DIY) services have not been widely adopted unlike in the western markets. Therefore, 95% of UClean’s laundry business is pick-and-drop driven. “However, the laundromat culture is picking up in localities such as Gurgaon’s Cybercity, Noida Sector 29, and certain areas in Pune where the population of bachelors is higher,” said Sinha.
UClean has 10 outlets—five in Delhi NCR, four in Pune and one in Hyderabad—and will be launching operations in Bengaluru and Goa by August and in Mumbai by September. It is targetting about 35-40 stores across eight tier I cities by December 2017. UClean’s workforce is spread across 20 people in the corporate office and 16 people across four of its stores which are franchise-owned and company-operated. The remaining six stores are franchise-owned and franchise-operated where the workforce is under the payroll of the franchisee.
UClean works on a hyperlocal model where each store services customers residing within a 3 km radius of the store. Each store has an exclusive zone under it and owns a delivery fleet. Average ticket size for an order is Rs 300 and each store receives close to 25 orders daily.
Sinha says each store of UClean is generating sales of Rs 2.5-3 lakh per month. “We are making a gross margin of about 50% on every order. We are working on a very low-cost model where the only fixed cost we are incurring is the manpower and the rentals,” he added. The company seeks to clock gross merchandise value of `90-95 crore for the current financial year ending March 31, 2018.
In the initial two months UClean was burning Rs 10,000-12,000 per month per store but the franchise model helped the company to control its cash burn rate. Its strategy is to open stores in markets near residential areas, inside of going for high-street locations. In January, customer acquisition cost for the start-up was about `200 and but it has managed to reduce it considerably to Rs 80.
UClean has mopped up $1 million in seed funding from Franchise India and Mumbai based angel investor Rajiv Jalan. By the end of 2017, it plans to raise another $2 million. Sinha added that the new fund will be deployed towards setting up a skilling academy for its manpower in states such as Bihar, Jharkhand and Odisha as a lot of its manpower comes from these states. Currently, the dry-cleaning services of UClean is outsourced to third-party vendors but the company is looking setting up its own dry-cleaning centres.