CHICAGO — Washio, the Santa Monica, Calif.-based on-demand laundry and drycleaning service, has shut down its operation, the founders announced Aug. 29 on their website.
“We generated millions in revenue and hundreds of thousands of orders, but the nature of startups is being innovative and venturing into uncharted territory: sometimes you make it, sometimes you don’t,” read a letter from the founders posted on Washio’s home page.
“We see this as a confirmation that the on-demand model is not easily applied to the drycleaning and laundry industry,” says Nick Chapleau, CEO for Starchup, a company that offers digital ordering and route management for dry cleaners and laundries.
“The locally branded approach to cleaning and customer growth, which we see across the industry, when paired with delivery and mobile technology, can be a powerful tool for cleaners,” he adds.
The Washio business model validated that a growing number of consumers prefer to use convenience-minded technology to meet their laundry and drycleaning needs, according to Chapleau. He believes that “innovative cleaners can now leverage the efforts Washio put into educating and acquiring customers about wash and fold, delivery, and mobile technology by offering a better customer experience powered by technology” such as Starchup.
Rick Rome, president and founder of WashClub, also an on-demand service designed for laundries and dry cleaners, believes Washio’s model of outsourcing all of its service offerings is what led to its demise.
“In the drycleaning business, you need to control the entire value chain within your business,” Rome says. “This will allow for better QC (quality control), customer service, revenue growth, and ultimately greater success.
“That’s WashClub’s business model, controlling everything from start to finish: pickup, processing, delivery, marketing, pricing, etc.”
Washio launched in 2013, raising nearly $17 million in equity funding. It was serving six metropolitan areas across the U.S. when it ceased operations.