🧽12/23/22 - Rinsed
✨ Optimizing car washing like never before!✨
Happy Holidays! This week’s startup is one of the quirkiest ones I know. Few people aspire to work in the car washing industry (is it even an industry?), let alone write software for it. Yet, Rinsed has definitely exceeded all expectations, capitalizing on an industry that you only interact with ~once a month. Who would’ve thought the next $100 million idea is a business management software for car wash companies?
Rinsed - the Car Wash CRM
The car wash industry plays an important role in maintaining the cleanliness and appearance of vehicles and is a significant and growing part of the economy in many countries. It is a competitive industry, with a range of business models and pricing strategies being used to attract customers.
- ChatGPT
Customer relationship management (CRM) software is an essential tool for businesses of all sizes. Used to centralize all customer interactions and information, CRMs are key for businesses to maintain strong relationships with customers. The CRM systems market was valued at $43.3 billion in 2022.
Although big tech companies dominate the generalized CRM space (e.g. Microsoft’s Dynamics 365, Salesforce, HubSpot), some niches remain to be filled. Rinsed is a cloud-driven CRM solution for car wash service providers. It provides revenue management, email/text marketing campaigns, conversion maximization, PCI compliance, and real-time analytics. Based in New York, it was co-founded in 2019 by Austin Esecson, CEO & former VP at Macquarie, and Nicholas Hippenmeyer, an ex-founding engineer at a healthcare startup.
Prior to the digital age, in-bay automatic (IBA) and self-serve car washes accounted for nearly the entire market. However, with the rise in cashless payments, subscription services, and increased fragmentation of the car wash industry, consumer demand for the field to evolve has allowed startups such as Rinsed to rise to the top.
Product
Rinsed’s product is optimized to convert standard single-wash businesses into subscription services, and they’ve done so while making functionality improvements overall. Their platform resembles a typical CRM with a few key services customized for car washing:
E-commerce: using Rinsed’s platform, businesses can allow customers to easily view and pay for different car wash subscriptions from their online website. Real-time analytics provide data regarding their transactions across all point-of-sales.
Marketing: Rinsed has car wash-specific email and text marketing drip campaigns, which adapt promotional material sent to different customers based on user behavior.
Conversion maximization: Rinsed claims to boost value per customer by 20%, mostly through changes boosting user convenience.
Although these features can technically be replicated using mainstream CRM software, setting up such a platform is inconvenient and costly for car wash employees. The convenience of Rinsed’s services makes them a desirable partner for car wash companies, and their many end customers can account for the seamlessness of its platform.
Market
In 2022, the car wash and auto detailing market was valued at $15 billion. The sector is extremely fragmented, with few companies spanning more than a few states. Most of Rinsed’s featured customers on their website are intrastate family-owned car wash businesses.
The traditional car wash business model is evolving across the entire nation. Customers are shifting away from driveway car washes towards professional ones. In this transition, Rinsed has identified a demand for B2C car wash subscription businesses.
Source: rinsed.co
"Rinsed is the only CRM built to support the $15 billion car wash market. The company is uniquely positioned to help car wash operators enter the digital era by leveraging the increasingly critical subscription model."
- John Luttig of Founders Fund
Rinsed is one of the only industry-specific CRM developers, let alone B2B within the space. As of late 2022, they have partnered with over 300 customers and currently manage over one million car wash subscribers.
The key competitors in the car wash CRM space are Coinless and Kukui. Coinless is an app managing digital car wash payments. They’ve partnered with car wash businesses all across the US, though they seem to be more geared towards single-wash services, not subscription car wash businesses. Kukui, a marketing management platform for auto repair shops, is one of the largest players in the auto repair marketing industry. They serve over 2,000 businesses worldwide and claim to be a Premier Google Partner. The auto repair industry fundamentally differs from the car wash industry in a few ways, namely due to the frequency of checkups, so it’s unlikely that Kukui will move into the car wash B2B space anytime soon.
Business Model
Rinsed describes itself as a “B2B SaaS company, providing car washes with all the tools they need to transition to a subscription model.” Their monthly, subscription model is convenient for car wash businesses, giving users a 30 day free trial period and allowing them to cancel their subscription at any time.
Traction
Rinsed raised a successful $3 million seed round in early 2020 prior to the pandemic. It graduated from Y Combinator as a part of the Winter 2021 cohort. During this time, it was able to grow its customer base 4x. In May 2022, Rinsed was able to raise its $12 million Series A, led by Bedrock Partners. It will use these funds to expand its software and customer service teams.
Conclusion
Here we have two co-founders in their late 20s/early 30s, one from private equity and the other a web developer Stanford grad, neither of which previously had any experience remotely close to creating CRMs for car wash businesses. Despite this, they were able to find an untapped niche and convince investors of its worth. Instead of following general advice such as “do what you’re good at” and “the next multi-billion dollar market will be fairly transformative” these two decided to do what no one else was doing - and to a large extent, they’ve succeeded. Moving forward, I’m interested in seeing whether Rinsed continues its upward trajectory, or whether they’ll take their money, get acquired by a big tech corp, and leave the industry without a trace.
Thank you for reading! If you have any startup/industry recommendations for next week, feel free to DM me. Enjoy the holiday season!