Indonesian laundry-on-demand startup Ahlijasa today confirmed closing a seed round of an undisclosed amount.
Earlier this year we’d already reported that a relatively new local VC, Indogen Captial, is one of the investors. 500 Startups and Fenox VC also participated.
When Ahlijasa launched in 2015, it offered a range of on-demand services, but later decided to zero in on dirty clothes.
It partners with premium laundrettes in Jakarta, helping them make better use of spare capacity. It equips customers with a laundry box, picks it up when it’s full, and delivers the items back washed and pressed.
The new funds will be used to improve the product offerings and grow the customer base, with focus on the greater Jakarta area, before scaling to other cities, says CEO Jay Jayawijayaningtiyas.
The startup also plans to hire more people for its tech team.
Elsewhere, laundry-on-demand startups have struggled to make the business model work at scale. India’s Doormintshut down in 2016 despite handling some 500 orders a day and having raked in a US$3 million series A round to grow.
“A truly scalable and profitable business model in laundry as an online-enabled business for mass consumption eluded us till the end,” Doormint’s co-founders said in a goodbye statement to its customers.
Ahlijasa thinks there’s still room to experiment in Indonesia.
“We position ourselves as partners of traditional laundry shops. Other models focus on competing against them and thus struggle to beat the low pricing. We empower mom and pop laundry shops by standardizing their operation and helping them get online customers,” Jayawijayaningtiyas explains.
“We provide so much value add to our partners, so they are happy to provide us a healthy profit sharing.”
Another Achilles heel of laundry on-demand is the high delivery costs, he adds. Ahlijasa plans to tackle this with smart algorithms which optimize drivers’ routes. It also doesn’t employ drivers, but works with them on a profit-sharing basis.
“All these initiatives help to keep our delivery margin low,” argues Jayawijayaningtiyas.
In today’s press release Ahlijasa says that despite major shutdowns, investors still have faith in the potential of laundy startups. It cites Cleanly in the US, which recently raised US$5 million.
Cleanly said one of its ways to achieve profitability is a low and methodical expansion process – which is how Ahlijasa plans to scale, too.
“We share a lot of similarities in terms of strategy with Cleanly,” says Jayawijayaningtiyas.
Khailee Ng of 500 Startups is optimistic about the market opportunity in Indonesia.
“I’ve been living in Jakarta for over a year, monitoring Ahlijasa, and doing my own research. My conclusion is that it’s a persistent, sizable need, that extends even into Tier 2 cities. Most importantly, unlike some other parts of the world, the unit economics work out great here,” says Ng.
“We saw that the founding team has big capabilities to drive Ahlijasa to become the leader of the ecosystem. We can also help them to further enhance their system,” Indogen managing partner Chandra Firmanto says of the investment decision.