Washbnb, which provides linen and laundry services for short-term rental properties, is the first Milwaukee-based company selected for Techstars Atlanta, a prestigious accelerator program that chooses 10 startups per cohort out of hundreds of applicants.
As part of the three-month program, which began on July 19 and is run in partnership with Cox Enterprises, washbnb will receive mentorship and $120,000 from Techstars, including a $20,000 equity investment and a $100,000 convertible note.
Washbnb CEO Daniel Cruz started the company in 2020 after experiencing the laundry challenges that came with running multiple Airbnb listings in Walker's Point. His co-founders are washbnb chief operations officer Brian Mandelin and chief design officer Cat Simpson, who also leads washhero, a pay-what-you-can laundry business that the team started during the pandemic.
Cruz said washbnb will use its time with Techstars to perfect its model. The company sources high-quality, sustainable linens from Valencia, Spain, rents them to customers, and provides laundry services on a subscription or contract basis.
Including the three co-founders, washbnb will have seven full-time managers as of Aug. 1, as well as two employees working in its laundry facility in the Bay View neighborhood, which is located in the same building as the Maytag Laundromat at 2510 S. Kinnickinnic Ave.
While washbnb does some laundry in-house at that facility, the bulk of its laundry is done by Wisconsin Hospitality Linen Service, which is part of The Marcus Corp. (NYSE: MCS), Cruz said.
Washbnb currently has six customers in the Milwaukee area with a total of 110 units, Cruz said. Milwaukee-based short-term rental platform Frontdesk Inc. is one of its biggest customers, with 55 units. The Dubbel Dutch Hotel, which opened in July 2020 at 817-819 N. Marshall St. in downtown Milwaukee, is another washbnb customer.
Between hotels and short-term housing rentals, washbnb is targeting a $69 billion global total addressable market, according to washbnb's crowdfunding campaign page on Wefunder, which the company launched in May.
In addition to the investment from Techstars, washbnb has raised more than $130,000 through its crowdfunding campaign. It plans to do an initial close soon to gain access to that money and then raise a more traditional venture capital round after Techstars, Cruz said.
On average, companies that participate in one of the dozens of accelerators that Techstars runs worldwide go on to raise more than $2 million of outside capital after the program, according to Techstars.
More than 2,500 companies have participated in Techstars since 2006, including New York-based fitness membership app ClassPass and Boston-based enterprise artificial intelligence platform DataRobot, which are both considered "unicorns" with valuations of $1 billion or more.
Washbnb has revenue projections on its crowdfunding page that show the company could reach unicorn status by 2026. It has $43,000 in revenue in its first 15 months, according to its website.
Cruz, who's originally from San Francisco and moved to Milwaukee around 2016, said he plans to return to Cream City after completing Techstars. While there, he hopes to gain insights into how Atlanta built a thriving, diverse startup ecosystem, he said.
"How do we learn from what Atlanta’s done, and then how do we apply our special slice of Milwaukee and Midwest to that?" Cruz said.
