Landromat Chain in India is Looking for Finance to Start-Up

Opportunity Snapshot

  • Country: India India
  • Industry: Retail Trade
  • Stage: Start-up
  • Investment size: $250,000 / min. $100,000
  • Type of investment: Debt

Investment Opportunity

I plan to start a chain of laundromats in India. Funding is required to develop multiple kiosks in the strategic locations in the city/cities to offer the facility.

The project is about a Laundromat that will express wash your fabrics.My objective is to provide express fabric washing convenient and economical to customers through 2 business models based on market segments.

I am a management graduate with more than a decade of industry experience planning to start a laundromat business. During my college and career days, while staying away from home, laundry was the biggest issue. The entire holiday was absorbed in washing clothes and other fabrics. Apart from the time involved, stress was generated in the process. And this was not only a challenge to me but to most people in the community. Dry cleaning every time was neither affordable nor was suitable for the longevity of the fabric.

Today I see an increasing population of students, single professionals and working couples (my priority segments) already stressed out in a 9 to 9 role losing the excitement of the weekend in doing the laundry. The struggle to find a suitable alternative is still large. Dry cleaning is expensive. The other options include getting the fabrics washed by a Dhobi (occupational caste specialized in washing clothes) or a house maid or doing it by yourself. The dhobi and the house maid have their own whim and fancies that more often than not are beyond reasoning and reliability.

Apart from the segments already mentioned above, few more rewarding segments are available such as hotels, hospitals, factories, schools, railways, airlines, etc. that offer potential for annual tie-ups. Families can also be targeted at later stages. The lack of proper water distribution and availability across areas within the city during the summer offers a great advantage to the business.

I plan to start a chain of laundromats in India. The objective is to provide express wash convenience to customers economically through two business models based on the market segments. The idea is to develop multiple kiosks in strategic locations in the city/cities to offer the facility.

Business Model:
(1) Get the clothes and fabrics washed on per kilogram basis along with same-day delivery. Ironing is optional. The service will also carry an option of pick-up & drop-off.
(2) Get the clothes washed on a per wash cycle basis with delivery within one or two hours. Ironing is again optional. There will not be any pick-up & drop-off as the second model is self-service oriented.

The project is less capital intensive, and it is sustainable and readily scaleable as most Indian cities are developing in terms of education, tourism, better career prospects etc . The convenience factor makes the business attractive and saleable. At present the project is in a seed stage. The seed funding will help us in rolling the project and buying equipment's and infrastructure. The equipment required consists of washing machines with drying tumblers, steam pressing tables and domestic water recyclers.

The payback period is less than 3 years and will start after the 1st year. ROI stands at at least 35% annually.

I require seed capital/start-up funding and mentoring to start the venture. Capital required is in the range of $100000 to $250000. ROI is fast & rewarding.

Interested investors can contact me on Merar for more information.

Competitive Advantage

The business is a niche and is customer friendly and carries psychological entry barriers particularly for the Indian mindset. Presently 4 similar projects have started (less than 3 years old) in India in the organized sector. Although they are doing very well in terms of growth and revenues as their target is the top line of the society, their services come at a premium price.

We will be the first to offer this service in the central Indian region. Our business model is unique as it is economical to customers, making it well suitable for the masses. It addresses the needs of the actual users in a simple manner. Our service provisioning model provides more than one option to a customer hence we can cater to multiple user segments, which at present is missing with other companies.

Rationale for the deal

The Indian Laundry industry is still an untapped market and has done well even in the recent tough times, which shows that the market is positive & hands on accepting the concept. The Indian market is large enough to accommodate more organized players.

It's laundry time and it seems like organised players are giving the friendly neighbourhood dhobis a run for their money. With the entry of global companies into India and a firm positioning of domestic players, the laundry industry is just getting bigger and more quality-conscious. And to add to the upbeat mood, the global laundry industry has, to some extent, braved the recession.

India being the second fastest growing major economy after China, growing at 6.1% year-on-year during the first quarter of April-June, organised players are cashing in on this unique opportunity to enter the unorgansied laundry market in a big way. And even as global and domestic laundry bigwigs make their presence felt, there is still a large unorganized sector waiting to be tapped.

The dry cleaning and laundry business has been least affected by the downturn and sees significant activity in the organised laundry market in India.
India has a huge unorganized sector which needs to be professionally handled. The way markets have developed in the US has not happened in India. However, India is going to grow in this business and there is a need for organised players to provide world-class services and educate the unorganized sector. For example, Wardrobe is growing at around 20% every month.

"Connectivity and brand building is crucial for us to be a success story in India." Wardrobe came to India in 2008 with an initial investment of 150 cr and plans to open 100 high-end fabricare stores by end of this year.

According to a market research agency, The Nielsen Company, the market size of fabric cleaning, which includes detergents, powders, pre-post wash, soap cakes is Rs.12,118 crore and 2,877,587 tonnes respectively.

Spanish multinational express dry-cleaning chain, Pressto, came to India in early 2008 and since then there has been no looking back. "Globally, the dry cleaning and laundry industry has evolved into a much more customer friendly entity. In hard times, people may buy fewer garments but they like to keep the existing ones clean and fresh so that their usage is optimum.

Use of financing

The funds will be used to buy/rent out showroom space, buy equipment, roll resources, build the brand & promote the service. A part of the funds will also be used to provide liquidity for at least 6 operational months. We plan to start with 3 stores in the city & expand to at least 2 more cities within 15 months.

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