The garment care market is substantial, with an annual value of approximately $60B. Despite this large addressable market, the industry has seen limited vertical integration among service providers. Cents is addressing this gap by offering an operating system for garment care and repair businesses. This comprehensive platform integrates hardware, payments, and software, providing business owners with a single solution that offers unprecedented control over their operations. The platform is versatile working with businesses large and small with a wide array of garment care businesses including traditional laundromats, dry cleaners, laundry centers in shared spaces like colleges, hotels, and apartment buildings, tailors, and cobblers. Cent’s unified all-in-one solution handles point of sale including embedded payments, business operations, machine integration, and even pickup for over 2700 retail laundry locations across the country and 3500 shared laundry rooms.
AlleyWatch caught up with Cents CEO and Cofounder Alexander Jekowsky to learn more about the business, the company’s strategic plans, latest round of funding, and much, much more…
Who were your investors and how much did you raise?
Camber Creek led our Series B with participation from additional strategic investors and lead investors of our previous rounds, Bessemer and Tiger. Total funding is over $77M.
Tell us about the product or service that Cents offers.
Cents is the largest and leading verticalized software, hardware, and payments platform to support how garment care and repair business owners grow, manage, and understand their business.
While you can think of Cents as Toast for your local laundromat, dry cleaner, tailor, cobbler, etc., the Cents platform also powers commercial laundry providers and payment systems for shared laundry rooms within apartment buildings, university campuses, hotels, and more.
From POS, online ordering, business management, on-machine payment devices, and more, Cents powers 100% of a laundry business for mom-and-pop shops, multi-unit operators, franchises, and everything in between.
What inspired the start of Cents?
After my first startup was acquired, I was interested in owning an SMB as an alternative investment. While looking at many different businesses, I heard that laundromats were incredible investments. I went to industry events hosted by the Coin Laundry Association and fell in love with the idea of buying a laundromat. I would visit locations all over the country and met with more than a hundred operators to learn the ins and outs of the industry. However, the deeper I got into exploring buying my own location, the more I realized how difficult it would be to operate one, let alone multiple locations, given how underserved the industry was from a technology perspective. That’s when I told my now-cofounder that we could have more fun, greater success, and a broader impact, by building a platform for these businesses as opposed to trying to open our own locations.
How is Cents different?
Cents is the only venture-backed company in the industry and the only platform that has endeavored to create a full-stack hardware, software, and payments platform that gives any operator one tool to run their entire business. It started with CentsOS, the POS and “nucleus” of laundry operations, and quickly expanded to launching Cents Dispatch, a modern and accessible online ordering and logistics management platform that included the first-ever facilitation of on-demand delivery via outsourced couriers. As the SaaS products grew, Cents launched Connect, the most integrated hardware device for self-serve payments, installed directly on laundry equipment.
What market does Cents target and how big is it?
We target the entire garment care and repair industry, $60B market in the US.
What’s your business model?
We offer hardware products, a subscription SaaS platform, and an embedded payments service.
How are you preparing for a potential economic slowdown?
One of the attractive elements of the laundry industry is its resiliency during nearly all economic climates. Laundry SMBs serve a critical role within their community, and we feel a responsibility to give our customers the best tools to deliver that service during economic downturns, pandemics, etc., while also being able to deliver a strong ROI in the investment they’ve made in their own business.
Even in a time of rising rates and economic uncertainty, the laundry industry is in a true renaissance, with more sophisticated operators expanding their location counts.
What was the funding process like?
Our goal was not just to raise a Series B but to find a strategic investor to support our continued growth across the laundry vertical. While a unique market environment, I saw no shortage of appetite for high-growth vertical software businesses, like Cents, that are category-defining companies building a single platform to consolidate and centralize the toolsets for SMBs.
What are the biggest challenges that you faced while raising capital?
While investors resonated strongly with our all-in-one platform strategy, investors became nervous of the hardware element in our business. Camber Creek, Bessemer, and other investors have seen the value of hardware as an important product line to deliver maximum value to both our customers and ourselves, which made them the perfect partner.
What factors about your business led your investors to write the check?
When there’s a dislocation in the marketplace, there can be great opportunities for strong companies to expand. I believe our investors saw that we have a very unique profile, especially when it comes to the benchmarks of companies after the 2021 bubble, when it comes to our core unit economics, product-market fit, growth, and retention metrics. While only 3.5 years old, we are now EBITDA positive, consistently growing 100% year over year, and serve over 2,700 retail laundries, about 1 in 14 laundromats in the US, and 3,500 shared laundry rooms with extremely strong retention metrics.
What are the milestones you plan to achieve in the next six months?
Every decision we make, and many of the milestones we set as a business, is focused on how we can support our industry and drive greater volume to our customers through our technology and partnership. Our success is directly tied to the success of our customers. We plan on empowering over 3,200 laundry SMBs customers by the end of this year, and investing in both building products that will grow their volume as well as extended support to be a reliable partner as they expand.
One milestone we are particularly excited about is investing in the multi-family space by powering the route operators that manage shared laundry rooms within buildings and helping our SMBs reach more customers at the nearby apartments.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank? .
Be passionate and stay resilient – those two characteristics are the only components more valuable than cash. If you can keep your team motivated and inspired, while persevering through uncharted stormy waters, you’ll find a way to win. Building companies is hard, and the road is never straight, but if you can embrace the pain and make it a productive force, you’ll build a business that can outperform and outlast your competition.
