On-demand laundry service Wassup acquires DoorMint in equity swap
On Monday, on-demand laundry service Wassup Laundry announced the acquisition of online laundry marketplace DoorMint for an equity swap.
This means that investors Kalaari Capital and Helion Ventures, who held investments in DoorMint, will now hold equity in Wassup. However, the ratio was not disclosed by the firm.
Speaking on the acquisition, Durga Das, Founder and MD, Wassup, said,
"Wassup has a solid business model that is capable of scaling to be the market leader in this space. We thank all the stakeholders including our investors, employees, consumers, and vendors for supporting us in this journey. We are happy to welcome Kalaari and Helion as part of our team, and believe that they can add a lot of value in our journey to be the market leader."
While commenting on this transaction, Rajesh Raju, MD of Kalaari Capital, said,
“We believe in consumer and retail businesses that build sustainable, long term value. We have seen the online laundry space go through rough times but believe that Wassup has a unique hybrid model with strong unit economics and a brand of national presence that can be leveraged to create a leading laundry brand in India.”
But, DoorMint shut shop...
This comes as a surprise as, just last September, YourStory had reported that DoorMint had shut operations. Speaking on the development at the time, DoorMint’s Founder Abhinav Agarwal said,
“It was coming for the past couple of months now. We couldn’t justify or see a positive unit economics. The market was also getting exceedingly tough. We have been trying to fundraise for a while now, but we only saw a wary bunch of investors. The past year has been a roller-coaster ride for all of us. From pivoting to laundry to fund raising and trying to scale in a tough environment, the journey has been difficult.”
While shutting operations, DoorMint offered all its employees a 45-day-severance package, and later helped them find suitable jobs. The acquisition will benefit Wassup by providing it access to DoorMint's infrastructure and clients, who number close to two lakh.
This isn’t the first acquisition for Wassup. In April last year, the laundry firm announced the acquisition of Ezeewash to strengthen operations in Hyderabad. Further, in November 2015, Wassup also acquired Chamak for an undisclosed amount in an all equity deal, marking its foray into Mumbai, Pune, Cochin, and Delhi. DoorMint is Wassup’s third acquisition in the on-demand laundry space.
However, what the deal represents is not just an exit in the books of investors, but also a guarantee of some fund flows into Wassup, since funds now have an equity stake in the company.
Started in 2011, Chennai-based Wassup had raised $3.2 million in pre-Series A funding in February this year from existing investors, including Anil Jain, MD of Refex Energy, as well as HNIs from India and the Middle East.
The firm had stated, then, that it would use the funding for expansion and building a stronger management team. The laundry service has raised $5.7 million in funding until now.