Finance

Dubai laundry app seeks ‘deeper pockets’ for next step

August 8, 2023

Washmen CEO Rami Shaar, seen at its Jebel Ali facility, says he doesn't yet see the benefits of listing — Washmen CEO Rami Shaar, seen at its Jebel Ali facility, says he does not yet see the benefits of listing

Washmen plans to tap into private equity
2023-24 set to be ‘first profitable year’, says CEO
Firm exploring expansion to cities in Saudi Arabia and Asia

Dubai’s door-to-door laundry app Washmen plans to tap into private equity and funding from family investment groups, but has ruled out a public listing, CEO Rami Shaar has told AGBI.

The company has gone through three rounds of fundraising since it was set up eight years ago, raising $11 million from seed, series A and series B rounds. The last round, in 2019, was led by venture capital fund AddVenture.

Funding for startups across the Middle East and North Africa fell 21 percent year on year to $1.6 billion in the first half of 2023, but Shaar said he believed it was the right time to attract the “deeper pockets” of private equity investors.

He added: “We’re going to be seeing hopefully either this year or next a change of hands of the earlier investors to more long term private equity investors, which is great for the early investors because they’ve made some good returns on the business.

“We’re moving away now from VC and more towards PE.”

Revenue in the UAE’s laundry care market is expected to hit $251.4 million in 2023, according to Statista.

The global drycleaning and laundry services market was valued at $69.3 billion last year. It is expected to grow at a compound annual growth rate of 7 percent from 2023 to 2030, said Grand View Research.

Washmen, founded in 2015 by Shaar and Jad Halaoui, began with an “asset-light model” that connected customers with existing laundries. It later bought up the complete supply chain and now runs a 30,000-square-feet laundry and dry cleaning facility at Jebel Ali Industrial Area.

Shaar said the company had recorded significant growth over the past two years – 65 percent in 2021-22 and 60 percent the following year. Growth of 55 percent is expected this year, he added.

“This year is going to be our first profitable year,” he said.

Shaar said the company was expecting earnings before interest, taxes, depreciation and amortisation of close to $3 million this year, rising to $6 million next year.

The company is still targeting triple-digit growth to become the “Starbucks of laundry” in the UAE, he said, but is also considering international expansion.

It is looking at markets including Saudi Arabia, Singapore, Taiwan and South Korea.

“There are certain demographics, certain disposable income that we look at that make sense, the density of these metropolitan cities that interests us and we’re exploring it,” he said.

Taking the company public is not on the to-do list, however.

“I know that there are smaller IPO markets. If we go into Saudi and we manage to continue growing there then maybe down the line it could potentially make sense, but I don’t necessarily see anything exciting for me to be a public company just yet,” said Shaar.

“We’re able to achieve what we want to achieve from not being a public company and I don’t see the benefit of it just yet.”