Just four months after raising a $17 million Series A, Helpling has mopped up further investment. The Rocket Internet on-demand home cleaning startup has closed a $45 million Series B round led by Lakestar, Kite Ventures, Lukasz Gadowski and Rocket Internet; money it plans to use to continue scaling up operations.
In fact, achieving scale, in typical Rocket Internet fashion, appears to be the name of the game here as Helpling moves at lightning speed into additional markets where, for the most part, other home cleaning startups have yet to enter, and the competition remains the ‘black market’. This has already seen the service expand to 200 cities across Europe and elsewhere after first debuting in Berlin as recently as March 2014.
However, although that number clearly dwarfs direct competitors, such as U.S. startups HomeJoy, and Handy, and Accel-backed Hassle, it comes with an interesting counter-point: Helpling cites 50,000-plus customers to date, meaning, technically-speaking, an average of only 250 customers per city.
The vast majority of jobs are in our top 20 cities globally.
But that doesn’t tell the whole story either. During a call, Helpling co-founder Benedikt Franke told me that the startup’s home country of Germany remains its strongest market, and that traction country-by-country is far from evenly distributed. Factors such as how long Helpling has been launched in a particular city and how much, based on market conditions, the company has decided thus-far to invest in each country are also at play here.
“The vast majority of jobs are in our top 20 cities globally,” he says. “But in all these cities you can book a Helpling. The question is, how much do we market it, or how much do we let it be a product that is being recommended based on the experience from customers. We focus on less than the 200 cities, but Helpling is available in 200 cities.”
Franke says that Helpling’s marketplace model, which connects people wanting to have their home cleaned to ‘vetted’ cleaners, is only profitable at scale. Specifically, repeat bookings is where the real money is made. He also says he thinks of the cleaners who use the service as Helpling’s customers, in addition to actual end-users.
This prompted me to ask about how Helpling recruits (and vets) the cleaners who service each city. Along with customer acquisition and support, it feels like the least ‘scalable’ part of the on-demand home cleaning model. A single bad clean could disproportionately damage Helpling’s brand after all.
We are in this for decades; it’s just the beginning of home services coming online.
Tellingly, Franke says the startup has tested two different recruitment and on-boarding processes: one requiring an in-person interview and test clean to be carried out by the prospective Helpling cleaner, and one that relies on an online questionnaire and telephone interview, the person’s prior cleaning experience, and a background and reference check only.
Based on the data those tests produced, Helpling — perhaps, rather conveniently — has chosen the latter, which is infinitely more scalable as it can be conducted from the company’s central base in Berlin.
“The results were very, very clear that the additional face-to-face cleaning [test] does not make the difference in terms of the customer satisfaction in the end. This is something we tested very intensively,” he says.
Equally important to maintaining a good customer experience is the rating system that Helpling employs, whereby customers can rate their house clean, similar to how passengers rate their Uber driver.
This, says Franke, means that the quality control on Helpling is largely “self-optimised”, as the startup’s algorithm rewards the best cleaners, which they themselves are made aware of.
“We would never do anything that harms Helpling as a brand,” he says. “We are in this for decades; it’s just the beginning of home services coming online. This only works if we can provide a good service. Otherwise you create hype and everyone tries it, and tries it exactly once, and you are in a really bad position.”
In other words, as Helpling continues to scale at Rocket Internet-famed speed, don’t fuck up? “Exactly, and fucking up is so easy, especially if you are growing fast and you don’t realise it,” says Franke.
