JustLaundry to use novel way to raise R7.2m on local crowdfunding site

Johannesburg based crowdfunding platform The People’s Fund today announced that it offering customers the opportunity to own up to 40% of a laundromat company by simply buying credit to use their service.

The laundromat JustLaundry currently operates in Gauteng and is looking to expand to the entire country by setting up a franchise in each province. The business is looking for R7.2-million to finance this expansion.

It’s raising the funding in an innovative way — by getting customers to purchase credits that they can then use to pay to access the laundromat’s laundry delivery services.

The platform’s co-founder Luyanda Jafta calls it a “novel” way of crowdfunding.

JustLaundry is looking to raise R7.2-million via crowdfunding platform The People’s Fund

In a press release today Jafta detailed how it would work.

“How it works is that people can buy a coupon to use their service from as little as R100 on their campaign on The People’s Fund.

“For each R100 coupon sold, they will be giving away one share of their company, for free. In total 72 000 shares are available to the crowd. The beauty of this model is that the crowd are guaranteed a service, no matter how the company performs. The share incentive scheme is primarily to entice customers to commit to long term usage of the service.

So far the company has raised R26 850, or 0.37% of the required funding. In all 153 days are left to run the campaign.

Jafta said last year the business was able to raise R240 000 through the platform and they have started paying back the crowd at 107% of the predicted performance.

It said the crowdfunding was used to buy additional machinery to increase capacity. “They are a two-year-old company and in the last financial year, through the help from the crowd, managed to almost double their revenue to R1.3-million.

Jafta says the current expansion is expected to create 32 new jobs across eight new franchises across the country.

He said in the same statement the platform raised over R4-million from the crowd and having paid back to the crowd over R1-million at an annualised return of above 20%.

“The platform secures the crowd’s money by ensuring that either an asset or a product underpins every contribution made on the platform and to date none of the over 1000 contributors have lost a cent of their money,” Jafta said.

In June last year Ventureburn reported that the platform had made its first payout of R43 800 to 42 investors who earlier that year had invested a total of R219 000 in a Bloemfontein based internet company, MySurfer (see this story).

The People’s Fund is an initiative of three companies — entrepreneurship networking organisation the Hookup Dinner, BrownSense which runs a monthly market in Midrand for black businesses and digital marketing company Payback.

The platform is currently running three other projects, these are:

• A movie “State Enemy #1“, which has raised just R28 640 of the R2.5-million it seeks, with 31 days of the campaign remaining.
• Purchasing order financing for small contractors, which has raised almost half of its targeted R1-million, with 519 days remaining.
• An initiative to raise R5-million to set up 10 pop-up cinemas. So far R347 720 has been raised with 488 days of the campaign left.

Read more: SA crowdfunding site The People’s Fund in first payout of R43k to 42 investors

Featured image: stevepb via Pixabay