Flush with fresh funds, UK 'eco laundry' startup Oxwash spins up growth plans

Oxwash, a U.K. startup that's spent the last few years applying high tech processes to shrink the environment cost of dry cleaning and commercial laundry, has trousered £10 million (~$12 million) in Series A funding to expand its nationwide footprint.

Currently its service is available in five U.K. cities: London, Oxford, Cambridge, Bristol and Manchester but -- flush with fresh funding -- it's aiming for broader domestic coverage and eyeing a U.S. launch after that.

Oxwash bagged a £1.4 million seed back in 2020 -- and has now pulled in a total of £15.7 million since being founded back in 2017, including from a public equity crowdfunder last year (which netted it £500,000 from around 320 Crowdcube investors); and via a £2.08 million seed top-up.

The Series A was led by Untitled VC, with existing backer Biz Stone (Twitter co-founder) also participating, along with Indeed founder Paul Forster, and Holly and Sam Branson. Other named returning investors include Reckitt venture arm Access VC, Pentland Group, Ascension Ventures, Vala Capital, and Truesight Ventures. While new investors in the round include 8 Dimension Ventures, System Capital Management and Khimji Ramdas LLC.

Oxwash's alternative spin on commercial laundry includes a "gentle" 'wet cleaning' technique to replace dry cleaning which involves the use of biodegradable detergents (rather than "harsh" solvents) -- and it also touts reduced water consumption (claiming savings of 4L per 1kg of clothes washed).

Additionally, it uses ozone as a disinfecting agent, to sterilize and deoderize fabrics at lower temperatures than traditional commercial laundry processes.

To ensure economies of scale, the on-demand laundry startup operates its services out of a handful of hubs (currently three) -- aka its service center "lagoons" -- using a fleet of cargo e-bike and electric vehicles for pick ups and drop offs to minimize its carbon emissions.

In a major development, it's announcing that it's gained B Corporation status -- and claims to be the only laundry and wet-cleaning company in the world that's gained this certification for standards of environmental, social responsibility and transparency, bolstering its eco credentials.

Oxwash customers span both businesses and individuals seeking on-demand laundry service (think the likes of individual Airbnb hosts up to NHS trusts). On the B2B side, it says customers include hotels, hospitals, universities, hospitality and circular fashion outlets.

Back in May 2020, Oxwash was reporting "several hundred" business customers and more than 4,000 individual users. Its press release doesn't offer updated figures (we've asked -- update -- it says it now has 20,000+ customers) but it touts quadrupled revenue in the last 12 months, as well as stating it's achieved "operational profitability" across its three washing facilities.

The new funding will go on U.K. expansion, with the startup planning to build a giant, centralized washing facility which it intends to use to service clients "up and down the country".

It's also planning a U.S. launch (although, back in May 2020, it was talking about European expansion -- so has presumably it's reconfigured its international growth plans). In response to our question on this, the startup told us: "We are still planning to expand into Europe and the U.S., and this round of funding will enable us to build a model that is suitable for overseas development. We’ve experienced a quadrupling of revenue in the U.K. since the pandemic started to recede and have therefore been focused on fostering the development of our home market before executing our expansion with this new funding."

Other plans for the funding include investment in new methods to further enhance its approach, such as acoustic drying -- i.e. using soundwaves instead of heat to dry textiles.

It also mentions potentially applying robotics and computer vision for further optimization of its processes. Expanding on that, Oxwash said: "Our series A funding will allow us to integrate next-gen automation to the washing process -- augmenting our expert workforce with robotics to move items through the process and optimise ironing, folding and shipping at scale -- for example by using AI to identify materials, and sending this data to our machines rather than relying on human expertise."

"As we expand and store garments for more brands, we will need smart systems to track garments through our process, which will also use AI vision to identify item type, stains etc," it added.

Additionally, in the next 12 months Oxwash says it has a goal of completely eliminating scope 1 greenhouse gas emissions from its operations.

Commenting in a statement, CEO Dr Kyle Grant said: “This new funding will be used primarily to develop our technology and invest deeply into the complete decarbonisation of our proprietary washing process. Up to 30% will be used for expanding our software technology capabilities, 30% for the deployment of our nationwide processing facility and the remainder for business development and growth."

“Starting a business just before a global pandemic and economic crisis is no one’s ideal business plan, and as we all know the needs of consumers and businesses have changed dramatically over the last couple of years. For us, this has meant focusing on building out a solution that is frictionless for our business clients -- the last thing they need to worry about is how their laundry will get cleaned.

“BCorp accreditation cements our commitment to responsible business and is another assurance to our customers that we are doing business the right way. It is undoubtedly the most robust certification available to demonstrate our dedication to sustainability and transparency that Oxwash is taking as a high growth company."

Currently, the startup employs over 80 people and says it's expecting a 50% boost in headcount in the next year as it pushes to expand services nationwide -- scaling out from its existing service bases in London, Oxford, and Cambridge.

Notably, Oxwash's delivery riders and couriers are fully employed (unlike on-demand delivery platforms that rely on the so-called 'gig economy' model) -- and it also specifies that all staff are paid in excess of the national living wage.

This report was updated with responses from Oxwash to questions about its customers, expansion and tech plans.