By Bernd Debusmann Jr
If you thought the glamorous world of restaurants, hotels or even supercars is where the money is, think again. The men behind Kuwaiti start-up JustClean are taking on the GCC's $3bn world of laundry - and proving there's nothing like the business of taking away people's daily pain of stains
“Doing laundry is like getting your hair cut every week,” JustClean managing partner and co-founder Athbi Al Enezi tells me. “You get your haircut and you get your laundry done. It’s a way of life.”
For most, however, this way of life is, to put it mildly, a bit of a pain. In worst case scenarios – at least in my experience – attempts to do laundry end in shrunken or stained clothes, plus wrinkles that seem to defy every attempt at ironing.
It’s this hassle that Kuwaiti start-up JustClean hopes to save people from.
Founded and launched by brothers Athbi and Nouri El Enezi under the name Masbagti in 2016, the company was created to organise the laundry marketplace so that consumers – using a single click – can choose their required laundry service from a pre-selected list.
Yet JustClean is no ordinary start-up. Only a year after its launch, the company attracted investment by Kuwait-based venture capital fund Faith Capital Holding, whose CEO Mohammed Nabil Jaffar (also the former CEO and owner of successful food delivery app Talabat) took over as chief executive to help boost returns.
Since then, JustClean has partnered with the likes of Careem to offer deals for riders and has even invested in two other start-ups, including Dubai-based car care company Keno and JustMop home cleaning platform, thanks to Faith Capital Holding’s financial backing.
“Real entrepreneurs are the ones who venture into something first. We’re solving real problems”
In February this year, it also closed an $8m Series A round of funding to expand across the GCC and bolster its logistics and SaaS (Software as a Service) arms that cater to laundry businesses.
But for the well-spoken and unabashedly ambitious El Enezi brothers, this is just the beginning of their takeover of the Gulf’s thriving $3bn laundry sector.
“This time last year, we were only actually live and active in Kuwait,” Athbi recalls. “A year later, we are live in the whole of the UAE – not parts of it – and the Eastern Province of Saudi Arabia and Jeddah, with Riyadh coming this month. We’re also live in Bahrain and Qatar… We like to do things pretty fast...”
Even as JustClean continues to expand in the GCC – with a physical office and team in each of the cities in which it operates – it already has its eyes set further afield.
“We felt that, as a business, we had to have a story behind us. That story will look a lot better once we control the market [in the GCC] from all directions,” explains Mohammed Jaffar. “But a second challenge is whether, as Arabs and as Muslims, we can end up penetrating non-Arabic speaking markets. That’s how we want to challenge ourselves. We’re working very hard to upgrade our product over the next few months for it to be ready to enter other key cities. We want to show that our people can go and achieve big things.”
JustClean’s seemingly meteoric rise depends on consumers wanting to outsource their laundry to third parties. But what happens in times of economic downturn when salaries are slashed, jobs are lost, and luxuries go out the window?
“We had to have a story behind us. That story will look a lot better once we control the market [in the GCC] from all directions”
Will people stop paying to have their laundry done?
“It’s not one of those things that you drop out of. It’s not that expensive. If you compare how laundry is done in the GCC to Europe and other places, it’s fairly cheap here. People may think it’s a lot, but if you calculate it over time, it balances out with what you’ll be spending on detergents and other things. It’s essential to have clean clothes, like it’s essential to eat,” Athbi says.
Paying to have your laundry done actually “saves you time and money,” according to Jaffar, especially if you wear a kandoora, or traditional Gulf dress, which can take up to 40 minutes to iron.
“It saves you time and money. It’s like in the old days. Most people used to [only] cook at home and today everybody eats out. The culture has changed,” he says, pointing at his own impeccably pressed kandoora.
“It’s the same thing when it comes to washing. The culture is to have someone else do it. To wash and iron a [kandoora] is not easy. It’s just faster and easier [to have them laundered],” he says.
And laundries can do it in the best way possible with the help of JustClean, as it offers its partners a range of benefits including point-of-sales systems, logistics and vehicle assistance, and access to the online marketplace.
“Do all laundries do the same thing? No. They do fairly the same, but prices are different”
The brothers and Jaffar even claim that JustClean doesn’t make any money if the laundries don’t, as it takes a cut of the bill, meaning it’s in its best interest for partnering laundries to offer customers the best possible service.
The platform which lists prices for each laundry has also pushed competition to new heights, with each business looking to distinguish itself with competitive pricing, according to Jaffar.
“Do all laundries do the same thing? No. They do fairly the same, but prices are different,” he says.
“We wanted to create competition to improve their standards. And by them competing, they’ll end up spending more on our platform. We generate a good amount of revenue from them simply wanting to distinguish themselves,” he says.
The rise in competition has also seen a surprising increase in Gulf nationals becoming involved in the sector.
“We are seeing more and more GCC locals working in that sector. A few years ago, the sector was dominated by certain nationalities. Today, you are seeing locals running the show,” Jaffar says.
But perhaps the most interesting aspect of the laundry business is its profitability, with Jaffar claiming it makes more money than the restaurant business.
“We’re working very hard to upgrade our product over the next few months for it to be ready to enter key cities in Europe”
“When you compare the [profit] margins of a laundry and a restaurant, laundries make more money. We’re seeing people expand. Just two years ago, we hardly saw anyone who had more than one laundry. Now we’re seeing people have three or four, and investing in their own cars,” he says.
Shifting a traditional, offline laundry industry to meet the requirements of a growing e-commerce sector was the brothers’ idea, but without the financial backing of Faith Capital, the company’s remarkable expansion would not have been possible, with the brothers previously stating that the VC had “changed our lives”.
For Jaffar, the investment into JustClean fits within Faith Capital’s larger aim of “empowering” young people to solve challenges with modern solutions, having made 11 investments so far that include a social media listening tool, an online review authentication service and a provider of cloud-based point of sale (POS) solutions in the F&B market.
“It’s simple. If we solve a real problem, that generates value. If you do something that doesn’t make a difference, that value is less,” he says. “Real entrepreneurs are the ones who venture into something first. We’re solving real problems.”
The success of JustClean will solve another problem: the lack of mergers and acquisitions (M&As) and initial public offerings (IPOs) in the region. According to a report from EY there were just 26 IPOs across the Middle East and North Africa (MENA) last year, raising $2.94bn – a 24.6 percent decrease from 2017.
Jaffar says JustClean’s success will not only attract more players to the market, it will also encourage M&As and IPOs.
“We have yet to see a big M&A transaction or IPO in this. The more people venture into this space, [the better it is] for everybody. Once things heat up and become hot, we want to be the biggest. [An IPO] is our aim, absolutely… We’re still small, but compared to where we were a year ago, we’re significantly larger and next year I believe we’ll be [even bigger] than we are today,” he says.
And why shouldn’t the start-up continue to grow if millions of people continue to experience the pain of doing laundry – just look around your office ight now you’ll surely find the wrinkled shirts, unsightly coffee stains, dingy whites and shrunken tops - clearly, there are people who are simply not up for the task. If you’re among that unfortunate group of talentless launderers – and I certainly am – perhaps it’s time you took your pain away, because as Jaffar says, “laundries just do it better”.
July 2019, JustClean announced a partnership with Dubai-based ride hailing app Careem that will see the two firms offer deals and discounts to users of each app.
The first campaign offered customers 20 percent off the cost of four rides a month if they placed an order via the JustClean platform.
New users were able to redeem a 50 percent discount on their first two rides. The partnership was quickly followed by another with LinkedIn, in which the two pledged to work together to recruit and develop talent for JustClean.
JustClean has a long-running corporate social responsibility initiative, with a particular focus on donations to children. In the UAE, Saudi Arabia and Kuwait, the company regularly donates backpacks pre-filled with school supplies to children in need.
Additionally, JustClean has distributed food and toys during Ramadan, as well as aided flood victims in Bahrain and provided water tanks for labourers in the UAE with Dar Al Ber Society.For all the latest Retail news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.