Cleaning up the laundry industry: The story of Oxwash
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Investing in line with sustainability principles has been a growing investment trend in recent years, whether by screening out specific companies or sectors, using shareholder activism to influence management, or investing in companies exposed to green trends such as renewable energy.
Venture capital has the opportunity to take this one step further by investing in companies that disrupt highly-polluting incumbent industries and replace them with those that use technology to do things in a drastically better way. Oxwash is doing this with the laundry industry.
Oxwash uses space-age technology to clean clothes at lower temperatures, using less water, fewer chemicals, and with drastically lower pollution from microfibres or detergents. Ex-NASA scientist Kyle Grant founded the company in 2017 while studying for a PhD at Oxford University, and it has since gone on to work with global companies such as AirBnB, Deliveroo and Peloton. Force Over Mass invested in Oxwash at the pre-seed stage and has seen the value of its investment more than double since March last year.
The company’s technology reclaims sterile water from a wash for use in the next cycle, reducing water consumption by up to 60% and saving on average 25.5l per wash. Microfibre filtration of the water captures 95% of the fibres shed during washing, preventing plastic pollution. The company uses ozone generated from the air to disinfect and sanitise the laundry. Automated and variable dosing of biodegradable detergent chemistry prevents overuse of chemicals.
It operates out of ‘Lagoons’ — mobile, shipping container-sized laundry units that produce net-zero emissions. The first of these was in Oxford, with a second opening in Cambridge. The company recently expanded to London and is scouting locations for a Lagoon in the city. The Lagoons are situated as close to clients as possible, and Oxwash uses cargo bikes to collect and deliver laundry.
Oxwash’s initial traction has been strong, but when the Covid-19 outbreak threatened to scupper its business, the team spotted an opportunity to begin working with healthcare providers. The need to rapidly scale up in preparation for the first wave of coronavirus cases meant primary care providers were more open to new providers. As a result, Oxwash faced less red tape to become a supplier. Ordinarily, commercial laundries must have operated for more than two years before they can gain accreditation for healthcare work, but the NHS waived this requirement for Oxwash. The company is now cleaning the scrubs and uniforms used in the Oxford University Covid-19 vaccine trial.
Oxwash has taken a different approach from other startups that have attempted to break into the laundry-on-demand delivery market. Where others pursued a gig-economy model for collection and delivery, Oxwash has fully employed all of its riders on more than the living wage. Grant said the company did this for business, as well as ethical, reasons.
“We wanted to own the whole value chain,” he said. “To do that, you need to have a team that is deeply ingrained in the process and are ambassadors for your brand out on the street.”
He continued: “People stop us all the time and ask what we do or how much we cost. If we just had gig economy riders, then we would have absolutely no way to convert those very hot organic leads into customers and revenue. Whereas if you fully train an employee and give them a good place to work, good culture and more than a living wage, they’re going to be far better ambassadors than if they were just gig economy. We made the rational decision early on that not only is it better for the business, but it’s also just the right thing to do.”
With backing from Force Over Mass, Oxwash recently raised a £1.4m round, drawing investment from Twitter cofounder Biz Stone, Indeed.com cofounder Paul Forster and others. It will use the proceeds to expand its growth and technology teams.
Once expansion into London is complete, the opportunities for further development are enormous. The global dry-cleaning and laundry market grew from $85.3bn to $118.9bn between 2014 and 2018 and is expected to reach $180m by 2022. High usage levels for self-service laundries, combined with double-digit AirBnB growth, make Spain, France and Germany all attractive markets for expansion.
You can learn more about Oxwash here.