The encyclopedia · Finance & Accounting · Financial decision · 2013–2016
Washio washed 21,000 tons of laundry and still washed out
The 'Uber for laundry' startup raised $16.8M, served six US cities at $2.19 a pound, and shut down on 29 August 2016 when the unit economics ran out.
Washio · 2016-08
What happened
Washio launched in 2013 from Santa Monica as an on-demand laundry and dry-cleaning app: wash-and-fold at $2.19 a pound plus a $5.99 delivery fee. It raised $16.82 million across four rounds from Canaan Partners, AME Venture Partners and angels including Ashton Kutcher and Nas, and expanded to six cities.
The volume was real — over one million dry-cleaned items and 21,000 tons of washed and folded laundry, millions in revenue, hundreds of thousands of orders — but the margins were not. On-demand laundry meant thin margins and costly city-by-city expansion, against rivals like Flycleaners, Rinse and Cleanly, a contractor-classification lawsuit from the attorney suing Uber and Homejoy, and a two-star app rating.
Washio shopped itself to competitors, but no deal materialised. On 29–30 August 2016 the founders posted a farewell letter: 'sometimes you make it, sometimes you don't.' Operations ceased immediately; its assets were subsequently purchased by rival Rinse.
Why it happened
- Volume never became margin: 21,000 tons of laundry at $2.19 a pound could not carry the logistics it needed.
- City-by-city expansion was the cost engine: each new market burned cash before the last one paid.
- The exit failed: no buyer paid up, so the shutdown letter became the only liquidity event.
The lesson
Washio proved demand for app-based laundry and still died: at $2.19 a pound, the unit economics could not out-run the vans — volume is not a moat in on-demand services.
Aftermath
Rival Rinse bought Washio's assets. The shutdown came weeks after Homejoy's and became part of the 2016 reckoning for 'Uber for X' startups.
Sources
- TechCrunch, 30 August 2016 — Washio on-demand laundry service shuts down operations (founded 2013; $16.82M across four rounds from Canaan Partners, AME Venture Partners, angels Ashton Kutcher and Nas; served Boston, LA, Chicago, SF, Oakland, NYC, DC; farewell letter from co-founders: over 1M dry-cleaned items, 21,000 tons washed/folded, millions in revenue, hundreds of thousands of orders; low margins and costly expansion; competition from Flycleaners, Rinse, Cleanly; shopped itself to competitors, no deal)
- Los Angeles Times, 30 August 2016 — On-demand laundry start-up Washio shuts down (announced 29 August 2016; nearly $17M raised; headquartered Santa Monica; six cities; $2.19/lb wash-and-fold plus $5.99 delivery fee; labor lawsuit alleging workers should be employees, same attorney who sued Uber, Lyft, Postmates, Homejoy; two-star iTunes rating; founders' letter: 'sometimes you make it, sometimes you don't')
- Wikipedia — Washio (company) (American on-demand laundry cleaning and delivery service founded 2013; raised $17M; shut down operations 30 August 2016; assets subsequently purchased by Rinse)
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