Laundry Project India Pvt Ltd, a professional laundry service start up based in Chennai, is looking at raising a Series A funding of Rs 10 crore by the end of 2014 through Unitus Seed Fund, in order to expand of its operations.
The company, backed by Das Star Ventures, currently has operations in Chennai and Bangalore and plans are to commence its services in Gurgaon and Pune soon. It has been serving the corporate clients such as hotels, large companies and large residential apartments and has recently stared retail operations offering services through stores in various parts of the city, through its retail laundry banner Wassup - Just Laundry.
"We are planning to expand our retail network to 50 stores in the four cities, during this year. We would be raising our Series A funding of around Rs 10 crore through Unitus Seed Fund," said Balachandar R, CEO, Laundry Project India Pvt Ltd. Unitus would act as a funding advisory for the fund raising.
At present it has around 10 stores in Chennai. The stores, set up through franchises would collect clothes from the customers as a collection point, which would be collected by the company through its transport services and washed it in its centralised facility.
The company has a facility at Sriperumbudur, near Chennai and one in Bangalore, to cater the requirements of the nearby area. It is also setting up a facility in Gurgaon to cater the needs of the national capital region and another one in Pune, soon, he said.
He said that the organised laundry market in the country is currently around Rs 5,000 crore, according to consulting firm KPMG, the unorganised market would be of around Rs 2,20,000 crore. One of the major organised player which has its presence in various parts of the country is Jyothy Fabricare Services Ltd, of Jyothi Laboratories Ltd, while there are regional players in varios cities.
While many of the players are targeting the higher class segments of some niche market, the company is looking at the middle class market, with an average payment of Rs 30 per piece, including the door delivery facility. The company is looking at franchises in the area where it can transport the clothes to existing facilities and there are opportunities for women to start the business with a minimum investment of Rs 6 lakh a store, which has an assured return over investment on three years.
The company is also planning to start uniform and linen leasing business from the second half of 2014, under which it would provide linena cloathings and staff uniforms for hospitality industry and similar large scale customers. It is also planning to collaborate with ITI of Karnataka for starting "Wassup Academy for Laundry", to offer a certified vocational training programme for workers in laundry.
"Availability of manpower is one of the major challenge that we have faced in the last two years of operation. The workers need to be skilled on understanding the peculiarity of the clothes and the science of cleaning it without affecting the fabric," said Balachander.
Durga Das, managing partner of Das Star Ventures, which owns a majority stake in the company, said that the seed capital investor has to work closely with the start up for the first two years and handhold the entrepreneur through various challenges in the first two years and that what the fund has been doing in various start ups including Laundry Project India.
However, when asked whether the seed fund would exit with the Series A funding, she said that it depends on the new investor and as per the model of Das Star Ventures, it would be the investor diluting the fund while the entrepreneurs' stake in the company are maintained intact.