On-demand laundry service Sudshare raises $10 million in bid to have gig workers clean other people’s clothes from their homes

Sudshare CEO Mort Fertel (Sudshare)
[finance.yahoo.com – 2022.03.30] Investors are taking the Uber-for-laundry model out for another spin cycle. Sudshare, a Minneapolis startup that’s been operating for three years, announced Wednesday it’s raised $10 million to build out its gig-worker-powered laundry service.

Mort Fertel, Sudshare’s CEO says his company already has 80,000 customers and is profitable. The company plans to use the capital to expand beyond its current footprint of 400 cities in the US and market to more customers and workers (or “Sudsters” as the company calls its laundry doers).

The business is pretty by-the-books for marketplace-based startups. From the Sudshare app, users can set up a time for a worker to come to their house and pick up their dirty laundry. The Sudster then does the laundry, folds and packages it, and drops it off the next day.

As Uber and Lyft took off around 2013 and beyond, scores of startups tried to marry its model of matching gig workers who could provide a service on demand.

Most of these startups died quickly, and few areas saw as many washouts as laundry and cleaning services. A high-profile failure was Washio, which raised around $16 million from VCs.

Yet, some startups from the era survived. Rinse, which has raised $25 million, still operates in about half a dozen cities.

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Fertel is well aware of past failures in app-enabled laundry. He is also quick to point out that Sudshare is different. For one, most of those companies weren’t relying on gig workers to do the laundry; Washio workers did pick-ups and drop-offs but the cleaning was done at commercial laundromats. The same is true for Rinse and its “Valets.”

Sudsters meanwhile, are doing loads of laundry at their houses and apartments. That, Fertel said, has enabled the company to expand quickly to hundreds of cities with little to no marketing costs. The expansion has been largely through word of mouth, according to Fertel, although a cursory look online shows that Sudshare is certainly running Google search campaigns.

Fertel said his company also has better margins because it doesn’t do dry cleaning.

“The company who succeeds in this space is going to be the company that specializes in laundry and is not distracted and bogged down in dry cleaning,” Fertel said.

The company says the economics are good for users and workers. It costs customers $1 per pound of laundry, and the Sudster gets 75 cents. The average order is 39 pounds. One Sudster who previously spoke to Insider said she’s making $5,000 a month doing laundry for the service.

Fertel pushed back on the worry that going the route of gig workers doing laundry rather than professional fluff-and-folds will result in a less consistent experience. Because customers rank Sudsters, the app’s algorithm prioritizes people based on their scores. So the best Sudsters rise to the top.

“If they don’t perform, they’re not getting any orders,” Fertel said.

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