washbnb

Laundry sucks. eliminating it for Airbnb hosts is a $69B problem! 🛏 🦄

Last Funded November 2021

$199,092

raised from 296 investors
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Hello, how would you scale this up to other cities? Edit: Thank you for your thorough reply to my question. You also answered my 2nd question about franchising. 😃
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Co-founder And CEO
Hi John, great timing because we have hosts emailing us from all over the world asking if we can help them out! Scaling washbnb is all about creating hyperlocal operational centers that are able to replicate and deliver our value propositions on the ground. The good news is that the infrastructure already exists in big cities, so we're going to start there and continue to leverage excess capacity while using contracts with enterprise customers to finance expansion and extend runway. We plan on starting relatively slow, with 1 new market this year outside of the Midwest so we can keep testing and improving our product-market fit with a larger subset of customers. The next few years are all about executing operationally, so that's where we'll invest heavily and look to industry leaders like Cintas, Peloton, and Imperfect Foods which have all built very robust hyperlocal logistics teams. Route density, standard operations procedures, technology, recruit/train/retrain the best front-line ambassadors are all areas of focus. Meanwhile we'll be hard at work finding the best way to expand to hot vacation rental markets that lack infrastructure, perhaps through a franchise model that rewards local operators/investors for their existing relationships and ability to build the modern and efficient infrastructure required to support the exploding number of hosts and professional managers who are seeing an incredible surge in bookings and revenues.
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Founder myself here. First of kudos to you all surviving the brunt of the pandemic, especially in the hospitality space, that alone speaks to your resolve. Questions: 1) Who does washbnb's laundry? This part of your service is a bit unclear, do you partner with local laundromats to wash laundry or do you plan to build laundry centers yourselves to get the cleaning done? 2) How did you get to your price points? My gut says your B2C customers (Airbnb hosts) will find it cheaper to do their own laundry (gas to drive to laundromat + cost to wash + and/or water + electricity bill at home), there may be some room for customer surveys & price discovery there. In thinking about this business holistically, there is also a unique opportunity here for you all to connect existing laundromats & laundry services with your customer segments. Depending on your answer to question #1, you could eliminate your own overhead costs, still provide custom laundry service, make laundromats happy by increasing their revenue, and hopefully make customers happy by cutting their costs. Edit: Last thing to consider, have you all ever thought of charging based off of lbs / kgs of laundry rather than doors? I tend to hate laundry, especially if I were going to a laundromat, based off of the amount of effort / exertion I would have to put into the work. Sheets of high quality rentals, Airbnbs, etc. are also heavy (especially cold weather locations like Milwaukee). The more sheets you wash, the more it costs, simple to understand and scales your revenue with how much people are using your service. Just food for thought.
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Hey Brian, thank you for digging in and the great insights/questions! It has certainly been a year in hospitality but we really lucked out by being tied to the short-term rental industry which didn't see nearly as much disruption as other travel & hospitality sectors. Here's our thinking: 1) We're partnering with large industrial laundry facilities that are optimized for hospitality linens. They get the best quality clean and press at the lowest possible price and smallest environmental impact per pound. Taking the laundry in-house at some point or acquiring facilities is likely in our future as a way to expand our TAM and margins. 2) We position our four value propositions first (quality, convenience, trust, sustainability). It will likely always be cheaper to do it yourself than using a service that includes the luxury linens, 2-way logistics, and laundry, thus; cost is not a value proposition of ours. When you weigh the hidden costs like you identified (including opportunity costs) against the value we provide then washbnb likely does cost less but not just $ for $. Our price points are driven by our costs against the margin required to run a healthy business built for long-term stakeholder value creation (customers, suppliers, employees, community, investors). We're definitely testing pricing with different customer segments to find prices where we can both succeed but per/reservation pricing has been preferred by all of our customers in each segment. Variable vs. fixed costs are vital in travel with such volatile swings of volumes Also, a strong argument to be made for passing on the cost of washbnb through right sized cleaning fee's which is easy to do when you know how much your linen service costs for each reservation turn. Charging by weight or by the piece makes us a commodity service, which isn't representative of all the work we do to make your guests and your operations team (or just the host) happy. We also take on all of the risk by purchasing all of the linens and renting them to customers so they don't have to worry about startup costs, inventory, replenishments, etc. We're solving for much more than just laundry. That's also why we can't simply create a marketplace platform for laundromats. They don't have the right equipment to work with hospitality linens and we can't monitor the quality, safety, sustainability, or sanitization which are vital with these intimate linens. Commodity services don't have a great track record with their customers, in fact, I leave time during every sales call for what I call the laundry horror story show. Start talking about laundry services with almost anyone, and they've got a laundry list of problems they've experienced! Unlike many startups, we welcome overhead costs as a way to scale enlightened hospitality. Route drivers and customer support staff can be amazing salespeople as they network with our customers and their operations/housekeeping teams. They're able to identify issues fast and also bring lots of insights about what is working well, or what may work well when we expand to new business lines. Cintas is an excellent example of a company with a lot of overhead but trading at a high multiple because of their operational excellence and strong value propositions for their large and small business customers. We're going to build something similar for decentralized hospitality!
HI Daniel, great idea, so I have vacation rental in Hawaii, have 4 rooms and 6 beds total, how much would you charge me for your service monthly or for each reservation from Airbnb ? Thanks Michael K
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Hi Stan, love it, I went to school at UH Manoa! I'm sure we'd have to adjust our prices up like most companies do operating in Hawaii but I'm happy to ballpark. Vacation rentals are a bit of a different beast than most of the apartment style units and hotel rooms we're currently working with but we're searching for a WI based partner now to test ways to best work with vacation rentals with lots of rooms/guests/beds. The pricing formula takes into account guests (bath & face towels), bathrooms (hand towels, bath mats), and beds (sheets/pillowcases). I'm going to guess your take 12-16 guests, 2 maybe 3 bathrooms? Per-reservation pricing would likely be in the $75-110 range for a house that size/format. We do plan on having an all-in monthly plan for properties that have steady high occugcany and don't mind the fixed-cost component because it simplifies everything. An all-in price would probably be around $500/month, but we haven't done much work on that model yet. Once we have a strong backbone of logistics to cover a wide area of units we think there will be a subscription component for hosts with 5 or fewer properties that includes delivery, discounted access to per/reservation washbnb pricing, host perks with partners and local service providers, etc!
I am so sorry If I missed this or cannot find the term sheet on the site, but at the 5.5M evaluation point, what will be the conversion rate for initial investments? Or is it based on the investor perk milestones listed? Just wanted for realize what say, $100 would look like in terms of "buying powered" at that $5.5M point. Yay last minute questions!
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Hey Ayrton, no need to apologize! This stuff can be pretty complex and took me a long time to learn. Essentially the investment in a SAFE note at a $5.5MM cap will be converted at either $5.5MM or a lower number per the triggering event (priced stock sale with set valuation, or a sale of the business at a set valuation). A $100 investment would convert to corresponding equity at any amount up to $5.5MM (ownership is therefore simple to calculate as $100 divided by total valuation of company). If the triggering event is a valuation above $5.5MM you'll receive additional shares because the shares your investment is converting are priced at the $5.5MM rate not the higher rate. The simplest explanation I've found for this math is here fundersclub.com/lear…ote-cap-no-discount Hope that helps and feel free to ask additional questions here or directly to me!
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You've had great momentum in recent months. Are you looking to take advantage and raise in a priced round sooner rather than later? Just wondering when Wefunder investors can expect the SAFE's $'s to convert to direct equity?
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Another great question Umair! At our current stage and the speed we're wanting to move at, we're looking at raising some institutional money on SAFE's in the near term at a higher valuation cap. New conversations with large customers and new market expansion plans are happening quickly now and I'd expect us to be looking at a much larger growth round as early as mid-2022. As the valuation questions start to shift from team/vision to traction/business performance/exit potential I fully expect that to be a priced round which would convert all SAFE's.
1. Your operations. If I understand it correctly, you are building a marketplace of supply through excess capacity at industrial cleaners? Is that correct (the microbreweries have done this and it worked out great). a. Do you have to buy that supply or do you contract out a “rate” and its pay by the drink? b. If I am misunderstanding, let me know! 2. Pricing. Would love your insight here. Subscription model I love. a. <10 doors. Do you ship 1 shipment to the host or how do you handle ups and downs in demand at the host level? b. 175 a door a month … if I assume 2 reservations for month and a 3 bedroom house … do you break it down by “per sheet set”? or how did you come up with economics and how does that translate to the consumer so they can cost compare? c. How do you ship today? Is that extra to the host? 3. Capex. a. Where do you buy your sheets and how did you decide on the spec of what to buy? b. How much in inventory do you have and do you have capacity constraints with that level of inventory? 4. Margins. a. Are you willing to give insight to potential investors on margin profile per customer and how those economics play out?
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Hey Max, 🔥 questions, I'm going to dive right in: 1. Your operations. If I understand it correctly, you are building a marketplace of supply through excess capacity at industrial cleaners? Is that correct (the microbreweries have done this and it worked out great). A: Mostly correct, and love the comparison as I'm a former beer guy. The biggest difference is that there is no network of distributors to the decentralized hospitality market so we have to build it ourselves so we can serve the locations (supply is nothing without distribution!). The CapEx to do so is much smaller than having to build out laundry facilities so it's great that we get to build a new channel of distribution while leveraging excess capacity at those facilities. It's not a true marketplace play because we're vertically integrating physical products (logistics and linens) between the supply and the demand sides instead of just software. The reason is because our demand side of the marketplace isn't equipped to work with the supply side so we have to invent a new product that can leverage the supply we're gathering. a. Do you have to buy that supply or do you contract out a “rate” and its pay by the drink? A: We negotiate a rate and pay by the drink (volume in this case) 2. Pricing. Would love your insight here. Subscription model I love. A: We're currently just working with the more B2B side of the marketplace, hotels or scaled hosts/managers and that business is contracted. We have an algorithm for pricing each unit and get paid based on reservation volume & occupancy. Subscription model will definitely come into play when we start working with small hosts and some other market segments we have in mind. a. <10 doors. Do you ship 1 shipment to the host or how do you handle ups and downs in demand at the host level? A: There's a lot of complexity in working with individual properties so we've paused that segment for the time being. It's hard because that's the segment that we come from as hosts ourselves so we intimately know the need but resource constraints are real on both sides of our marketplaces so we need to achieve a certain level of scale before we can tackle those doors. The way we've modeled it out looks like a meal kit or Imperfect Foods delivery service where the delivery date and parameters are set but the user can modify certain things like # upcoming reservations to get them through the week. In a future world we think we can automate the entire thing by leveraging API data from the online travel agencies (OTAs) and property management systems (PMSs) themselves. b. 175 a door a month … if I assume 2 reservations for month and a 3 bedroom house … do you break it down by “per sheet set”? or how did you come up with economics and how does that translate to the consumer so they can cost compare? A: There's a price per check-out that we charge based on the needs of the individual door (beds, bathrooms, guests, avg. length of stay, etc.). In the case you outlined above the per-checkout price would be $87.50. The economics are all based on our costs to serve that door, the value being offered to the customer, and the ability of the customer to pass the cost on to their guests or absorb it to existing structure. We're not fully fleshed out on cost comparisons at this point, mostly because our customers have no idea what to even compare it to. Growth has been so fast and furious in this space that virtually nobody has a firm grasp on their procurement and operating costs. There's a startup in our techstars cohort called Focal Point which is an enterprise SaaS product that solves a massive problem in the procurement functions at fortune 500 businesses. Having seen first hand how wild the current state of data is in procurement at $300B companies I'm really better understanding how especially hard this is for customers we're targeting. As the industry matures over time and competitors enter we expect to need to be better able to quantify the value we provide and show true savings but I'm confident that apples to apples cost comparisons are both not very important and where we do get that granular we can still show a massive value vs alternatives. c. How do you ship today? Is that extra to the host? A: We handle all delivery & pickup with our employees. We charge a monthly per-location fee for each remote linen closet that we manage. When we move to smaller host we expect the subscription fee to include delivery/pickup. 3. Capex. a. Where do you buy your sheets and how did you decide on the spec of what to buy? We have a direct manufacturer relationship with RESUINSA in Spain. They're a family owned company that shares many of our values around quality and social/environmental sustainability. They specialize in hospitality linens and have exclusive relationships with some of the top luxury hotels in the world. We decide specs based on the same factors that a buyer for a luxury hotel would use but optimized for sustainability. Major factors are luxury feel, durability, weight, zero plastic or other manmade fibers, sustainability, and overall utility. b. How much in inventory do you have and do you have capacity constraints with that level of inventory? A: Inventory is by far our most limiting capacity constraint and it's coming at us from both a resource and supply chain perspective. First: The linens are quite expensive. We're projecting we'll need $300k-$400k in linens to reach breakeven capacity. We've been bootstrapped and without much credit as a new business so procuring linens has been a difficult balancing task. Second: Global supply chains are a total disaster and I'm not seeing any signs that this isn't just the new normal. While it creates risk for us it creates an incredible amount of risk and uncertainty for potential customers (especially in the hotel segment) which creates a significant opportunity for us to sell against. There are all sorts of traditional and alternative financing methods we can use once we have better data so medium to long term the goal is to not use dilutive capital for linens or other operational expenses that we can turn over with cash quickly. 4. Margins. a. Are you willing to give insight to potential investors on margin profile per customer and how those economics play out? A: At this stage we're mostly making educated guesses and updating them as more and more data comes in. We're doing the most work around our fixed and variable costs though and we're seeing gross margin around 55% but again the sample size is really low and we're still doing a bunch of things that don't scale (like using a minivan with the seats removed). In the short-term I believe we'll be able to hold the line on our current pricing structure or even increase while making a whole bunch of cost-saving improvements. I won't share any customer specific data out of data protection agreements we have with them but happy to keep updating as we get better data, as well as take a deeper dive in a call.
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How many 'doors' do you need in a geographic area to justify an expansion/satellite there? For example, someone asked you about prices in Hawaii. Well, assuming we're talking about Oahu (inter-island business would drive up costs) how many doors would you need to justify opening a laundry there? I realize prices would be higher there, but so would costs. If you'd rather quote for a location you're currently eyeing (e.g. NYC or Chicago or...) and have a better bead on those numbers that'd be good too. Thanks.
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Great question Robert! Our current model looks really great at 500 doors in a location so we'll likely be looking for markets where we can get to 300 quickly to reach break-even and reduce burn but have a clear path to 500 doors in the first 12-months. Our current focus though is nailing that model so we're ready to scale it when we close the investment round! Clearly there would be a lot of per-market adjustments to the unit economics but we're building the model assuming middle of the road costs (like operating in Austin/Nashville vs. NYC/SF).
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Hey Daniel, Looks like I can't reply to a thread in the platform, but the signage looks great, thanks for sharing! Appreciate it
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Our pleasure Amit, we're excited to have you onboard, thank you for investing!
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Hi Daniel, Is it possible to see the signage that goes in rentals for WashBnB’s service? Maybe it could be a post in the “Updates” section in Wefunder (?) I think it’s interesting to “add transparency” to the end customer (as you mentioned) I’m just curious what that looks like, if the signage shows the service is professional grade, if it’s a sustainable solution, etc.. Thanks in advance for your reply/thoughts, Amit
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Hi Amit, definitely! Thank you for the suggestion. I'll work on getting that up in a few days as we're scrambling right now to close a few big opportunities and launch the campaign publicly!
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Hey Amit! I've added a new slide to the very bottom of the campaign page that shows the marketing materials available to hosts. In the trade we've been placing logos and/or using the hosts name or company name to customize them to each customer! Let us know what you think and hope to count you as an investor in washbnb!
What are the initial target markets? I'm interested in vacation markets primarily i.e. Puerto Rico
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Hi Alex, apologies for the delay as have been crazy getting ready for techstars Demo Day! We're looking at a bunch of markets in the South East and Midwest currently. Our first expansion targets will come from the following list: Central Florida South Florida Atlanta + North GA Mountains Charlotte Central Texas (Austin/San Antonio) Nashville Chicago New Orleans Columbus, OH Where else would you like to see washbnb in the next 18-24 months?
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