876LAUNDRY founder Donovan Betancourt is taking a more than $100-million bet that Jamaican companies can be persuaded to outsource their laundry as the new operation builds capacity to go after hotels, manufacturers and other businesses that currently handle the function in-house.

The Kingston-based company, which began operating in May, is currently using only about 17 to 20 per cent of its processing capacity. Still, Betancourt is already investing in additional commercial equipment that will more than double capacity from just over 2,000 pounds of laundry per day to more than 5,000 pounds when fully integrated around November.

For the businessman, who spent more than 16 years at Digicel Group managing facilities and technical operations across several markets and is now managing director of INAMI Group of Companies, the investment is built around the belief that laundry represents an unnecessary cost centre for many businesses.

“There are really two things at the heart of the opportunity for us: Convenience and value. Everybody does laundry, and [they] do it constantly. The question is whether doing laundry yourself is always the best use of your time,” Betancourt told the Jamaica Observer.

The model could eventually go beyond washing items supplied by corporate clients. In a follow-up interview, Betancourt said the company is exploring arrangements under which it could provide and manage linen or specialised garments on behalf of the businesses. He pointed to massage and physiotherapy operations that require a regular supply of towels and linens, as well as a proposal being developed for specialised garments used in manufacturing.

“A hotel, for example, does not fundamentally need to be in the laundry business. What it needs is a reliable supply of clean, fresh linen at all times,” he said.

Betancourt’s pitch is that companies could avoid tying up capital in washing equipment and carrying the associated costs of staff, electricity, water, maintenance and linen inventories by contracting the work to an outside provider.

He believes that opportunity extends well beyond hotels to manufacturers, salons, industrial operations, security companies and other businesses that routinely wash uniforms, linen or other items.

876Laundry is already serving commercial customers in St Ann and is in discussions with several organisations for additional contracts. Commercial business is expected to become the main driver of the operation as it expands.

Betancourt estimates the wider opportunity in the billions of dollars, although there is no independent market estimate supporting that figure. His calculation includes not only business currently going to commercial laundries and dry cleaners, but laundry being done internally by hotels, villas, Airbnb operators, university campuses, companies and households.

“We are not simply selling laundry services; we are selling convenience, reliability and a business case for profitability,” he said.

876Laundry founder Donovan Betancourt has invested more than J$100 million in the technology-driven laundry operation, which is positioning itself to tap growing demand from households and businesses across Jamaica.

$100 million invested

About half of the more than $100 million invested so far went towards acquiring and retrofitting the Kingston facility, while another 25 per cent was spent on laundry equipment. Solar generation and battery storage accounted for about 10 per cent, another 10 per cent went into locally developed software, including the company’s mobile app, and roughly five per cent was spent on vehicles and collection and delivery infrastructure.

The company estimates that utilisation will have to rise above approximately 60 per cent of daily capacity to achieve its targeted profitability. Betancourt expects the operation to begin moving into profit during the second half of its second year.

Water remains one of its largest operating expenses, while solar generation and battery storage supply approximately 90 per cent of its electricity requirements.

The company currently directly employs five people, with another five providing supporting services. Betancourt expects that number to double by the end of the first year and projects that more than 50 jobs could eventually be supported if the commercial operation approaches full capacity in year three and beyond.

876Laundry CEO Jonelle Williams demonstrates one of the company’s smart laundry lockers, which allow customers to drop off items for cleaning without visiting a traditional laundromat. Each unit measures approximately two feet wide, three feet deep and six feet high and contains four compartments. Larger loads can be assigned additional locker space. The company currently has two lockers in operation and plans to roll out another eight.

Consumer business

While corporate outsourcing is central to the growth strategy, 876Laundry is also targeting households with wash-and-fold services and specialised cleaning for sneakers, Clarks, shoes, boots, rugs and heavily stained items.

Instead of establishing traditional laundromats in multiple locations, the company is using collection and delivery services along with smart lockers where individual customers can deposit and retrieve laundry.

Two lockers are currently deployed and another eight are planned. Each unit has four compartments, with the company’s online system showing which spaces are available when a customer books.

“Some people may not want people in their home or their space and the lockers solve that problem. They may live in a secured facility, or it may just be because they want to do it 12 o’clock at night,” Bethancourt told the
BusinessWeek.

Footwear undergoing specialised cleaning at 876Laundry’s Kingston facility. The company uses a dedicated shoe-cleaning station equipped with UV technology to help sanitise footwear, along with a drying system to speed up the process. Shoe cleaning is among the specialised services offered by 876Laundry, which handles sneakers, Clarks, shoes and boots in addition to traditional laundry.

The technology platform also tracks orders through the Kingston facility. Betancourt said cameras are used throughout the processing operation and customer orders appear on screens as they move from one stage to another. The company is documenting its processes as it works towards ISO 9001 certification.

For now, the immediate objective is to establish the operation nationally. But Betancourt is already looking further ahead.

“Our immediate ambition is certainly to establish 876Laundry as a national Jamaican brand. Once we prove the model at scale, I believe there is absolutely an opportunity to examine how the concept could work elsewhere in the Caribbean,” he said.