In an industry that has witnessed companies consolidating and others collapsing, Handy, a home cleaning services company seems to be thriving. Recently, Handy announced that it had raised $50 million in new funding. The aim of the fund is to facilitate Handy’s continued expansion of its business in the areas that it operates especially the United States and London.
Fidelity Management, a new investor, led in the Series C round of funding. Existing investors like TPG Growth, Highland Capital, General Catalyst and Revolution Growth also participated in the funds drive. This brings the total investment in Handy to over $111 million.
From its launch in 2012 to June 2015, Handy had completed over 1 million bookings through its platform. According to Oisin Hanrahan the CEO and co founder, Handy has 10,000 registered professionals with a hundreds of thousands clients. It also books 100,000 jobs per month. The main objective of the firm is to offer a better experience for the customers. Additionally, the goal is to expand beyond the cleaning services that presently represent approximately 80% of the Handy jobs.
To some extent, the new round of funding may have come as a surprise although it was expected. According to a report released in July, Handy was in talks to acquire competitor, Homejoy. It also reported of a strategic investor albeit none was named from the current round.
The current on-demand services ranging from food delivery to transportation among others is a big business given that consumers are transacting using their smart phones. Investors are rushing in to capitalize on the opportunities experienced in the sector. Companies like Airbnb and Uber have demonstrated that success is a matter of scale. Handy seems to have considered this proposition. However, Handy knows that it is a challenging task considering the position that it will hold when big players such as Amazon are put in the picture. This is the reason why Handy wants to improve the services that it offers to a smaller market before it expands its operations.
Handy is a home cleaning services company that was established in 2012 by Oisin Hanrahan and Umang Dua. It offers its services through an App where clients can order for cleaning services and a fun twitter account full of #HandyFacts. Handy’s cleaning professionals are vetted to ensure that they are faithful.
Any business investment needs a seed stage investment in order to grow. This’s the startup capital that is required by a business to pay for its startup cost before it launches. This process needs seed investors who gain a share of the business profit in return to their initial startup capital for the investment. Sultan Alhokair is one of such seed investors, and Bloomberg notes that he works hand in hand with Valia Investments, assisting in determining which companies qualify for seed funding.
Below are a couple of fundamental guidelines that Sultan Alhokair follows.
Potential for getting back their seed funding is fundamental. Any seed funding Company wants returns on their investment. Seed funding comes at a price, investors like Alhokair want a return from the companies which they invest in, usually sooner rather than later. A company with a potential to grow and pay back their seed investment, will be in a better position to be more attractive at seed level. One key is a companies compelling story towards success.
A factual storyline from a business company looking for its startup capital is important. This means that the company has done its market research carefully and is ready to present its argument so as to qualify for seed funding. Without a compelling or attractive story, the lack of a seed investor to make it a success will be immediately recognizable through consumer validation.
Before an idea comes to birth, there needs to be an existing proof that the idea would be successful. This means that market research should be carefully carried out to reveal that there is a need in that product. A company seeking for meaningful startup funding, needs to show proof that there’s a legitimate interest in what their offering – viable exit strategies.
Sultan Alhokair seed investors are patient, and they do realize that at times it takes a little longer for a company to get off the ground. However, if things look like they’re not working out, it is crucial to have a viable exit plan for the investor. An investor has put their finances in a company, so having a way they can pull out, and not leave an investment crumbling is one of the good attributes about Sultan Alhokair.
These are some of the fundamental tips that Sultan Alhokair and Valia Investments look for before seed funding a company. Sultan Alhokair makes these kinds of decisions on a daily basis.