Laundry Service Edaixi Gets Round B Plus, Promises Profit in 12 Months
Chinese on-demand laundry service Edaixi has announced the completion of their B Plus round of funding led by Chinese detergent manufacturer Libai Group. Libai is joined by Chinese conglomerate Profit Palace Group as well as several other unnamed investors. Edaixi did not specify the size of the funding, only saying that the round is worth hundreds of million RMB.
Edaixi, born out of laundromat franchise Rong Chain Laundry, is one of the top on-demand laundry pickup services in China.
According to the firm, the new funding is earmarked for expanding businesses along the laundry industrial chain and quality management.
In addition to the current partnership linking Edaixi with Libai Group, a company up the industrial chain, the Beijing-based startup has made several moves to expand into sectors down the chain, with investments in laundromat franchise EBJ Cleaner and luxury product maintenance service Green Bag Hotel, a subsidiary of the Profit Palace Group.
The funding is significant for Edaixi as it comes amid a year-long funding shortage that hit China’s startup industry. Edaixi was rumored to be considering layoffs which intensified as the O2O craze seems to be cooling in China.
The firm has made some adjustments to live up to the changing market, such as shifting to a partnership model in order to achieve an asset-light business model and refocusing on laundry services instead of positioning itself as a one-stop housekeeping service provider.
After the adjustments, the three-year old startup is showing gross profits and balanced cash flows, according to company founder and CEO Lu Wenyong. Lu added that the company is expecting to generate profits in the next year.
The trio of Chinese Internet giants (Baidu, Alibaba, and Tencent or BAT for short) has dipped their toes in nearly every hot vertical as they find investing in startups is a smoother way to expand their businesses. On-demand laundry is no exception. Tencent invested in Edaixi’s angel round in July 2014 while Baidu led a $100 million USD B round in the company in August last year.