Laundrapp and Zipjet, the on-demand laundry services based in London and Berlin respectively, have completed a merger through which the combined business will become the largest on-demand laundry business in the UK. The all share equity deal sees Laundrapp acquire Zipjet through the issuance of new shares and will support the next phase of growth. Further to the deal, the combined business has completed a funding round from existing investors including Toscafund, Hargreave Hale VCT, Henkel, Rocket Internet and further minority shareholders.
The European on-demand laundry and dry-cleaning market is estimated to be worth around €20bn per annum. Both Laundrapp and Zipjet have benefitted from this demand, with revenues rising more than 30% yoy. Together, the businesses currently process over 150,000 items of washing each month, with the Wash & Fold service representing approximately 25% of volumes. Customers tend to start with the classic dry-cleaning offering for suits, shirts and dresses and over time convert to the laundry and linen offering, driven by its quality and convenience.
London is currently the main market for both Laundrapp and Zipjet, and this transaction gives the combined business critical operational mass, whilst maintaining two separate brands in the short term. The service operations, including the processing of the laundry as well as the transportation, will be combined into one in the coming weeks, which will enable the company to further optimise the last mile logistics and product quality.
By combining the technical capabilities of both businesses, customers, partners and suppliers will be able to leverage a platform capable of managing complex logistical data to personalise delivery slots and optimise customer experience. Whilst the integration and improvements will take place over a number of months, customers and partners will benefit from the increased supply of logistics capacity, with more time slots available in the prime morning and evening time slots.
Oliver Bedford at Hargreave Hale commented: “Bringing together two significant operators within the on-demand laundry industry will help lay the foundations for the next wave of investment into technology and infrastructure. Laundrapp aims to put convenience, choice and value at the centre of its customer proposition and we see this transaction as an important step towards building a sector leading capability.”
Lorenzo Franzi, CEO of Laundrapp, commented on the deal: “Bringing the two businesses together allows us to realise synergies, leveraging our technological advantage and critical mass to better serve customers and partners, and in the process cement our position as the #1 player.”