Inc & Co Group has announced the acquisition of Laundrapp, the UK’s leading on-demand laundry service, after it went into administration last week, highlighting the growing potential of disruptive companies within the dry cleaning and laundry space.

Laundrapp, which is currently operational in all major cities in the UK, allows customers to schedule their laundry and dry cleaning items for collection via the supporting app. These are then cleaned at regional facilities, before being returned to them in a pre-selected delivery window.

However, the company went into administration on Friday, leaving investors, including entrepreneur Michael Spencer out of pocket to the tune of millions. Inc & Co’s purchase sees the company given a lifeline after it failed to get further backing to stem recent cashflow issues.

“It’s positive to see that someone has acquired the assets of troubled start-up Laundrapp after the company went into administration,” said Matt Connelly, founder and CEO of rival ihateironing.

“Three things have cost Laundrapp their long-term success. Firstly their business model which relied on out-of-town factories didn’t provide the level of care needed for people’s clothes. This mass processing approach can’t provide the detail and care that the best independent dry cleaners can produce.

“Secondly the company focused too heavily on attracting new customers, as opposed to retention of existing ones.

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“Finally, Laundrapp’s  founding team were really employees rather than founders, with no more than 2-3% shareholding so their focus was on profit. Whilst healthy financials are important, that can’t be the only thing that drives you. Startups need to be fuelled and driven by passion and love to make their business a success.”

Disruption and the on-demand dry cleaning space

On-demand dry cleaning and laundry services have been a growing presence in the digital economy, with the app and delivery model providing significant disruption to a long unchanged field.

Having been worth $17bn globally in 2017, the industry is now projected to reach worldwide sales of $52bn by 2022, according to research by Absolute Markets Insights.

The acquisition, which has been made for an unnamed price, follows Laundrapp merging with key competitor Zipjet in June 2019.

The laundry service now plans to launch a “new ambitious growth strategy”, including an overhaul of its digital platform and an aggressive customer acquisition push.

“It’s business as usual for our customers, the Laundrapp team, partners and suppliers, and I’m excited to be receiving additional support from the group with our ambitious growth strategy,” said Dominik Wellmann, CEO of Laundrapp.

Laundrapp acquisition sees Inc & Co diversify portfolio

The acquisition of Laundrapp sees Inc & Co diversify its portfolio beyond its core area of digital marketing and communications.

Inc & Co describes itself as an “agency collective with a difference”, focusing on acquiring “ambitious agencies” and giving them “a whole new lease of life”.

It previously acquired communications company Brass Agency in December 2019 and digital marketing agency Fast Web Media and mobile app developer Cuhu in July 2019.

The Laundrapp acquisition is therefore a new step for the company, suggesting that it plans to apply its digital marketing expertise to in-house companies rather than remain purely in the digital marketing space. It also suggests that we will see more acquisitions of similarly disruptive companies by Inc & Co in the future.

“I was inspired by the work of the Laundrapp team, and the great product they have built. This business, with its ambitious growth plans, is a great fit within our group,” said Jack Mason, Group CEO of Inc & Co.

“It’s very much a part of our strategy to have forward-thinking technology, and digital products and services within the group. I’m looking forward to supporting the Laundrapp team on their mission.”

Read more: With its acquisition of Pointy, Google is expanding search into the physical world