This Entrepreneur Raised $80 Million To Build A Tech Platform To Help Laundry Businesses Run More Efficiently And Grow

In the entrepreneurial world, every journey is unique. Alexander Jekowsky’s path from aspiring baseball player to tech entrepreneur was marked by unexpected turns, unrelenting passion, and an affinity for solving unconventional problems.

In this engrossing interview, Alexander shares experiences with acquiring talent, executing M&A deals on the buy side or sell side, and navigating funding cycles.

He also talks about vertical integration, verticalizing in the SaaS industry, and ultimately disrupting an industry many would consider far from glamorous—laundry.

Listen to the full podcast episode and review the transcript here.

A Californian Dreamer: From Marin County to the Big Apple

Growing up in Tiburon in Marin County, California, just outside of San Francisco, Alexander describes his childhood as anything but predictable for someone who would become a serial entrepreneur. Although he now lives in New York, he still considers himself a Californian kid.

His father, a musician who founded the California Symphony, and his mother, who worked in the nonprofit world, didn’t exactly hint at the business world Alexander would dive into. Initially, his dream wasn’t technology—it was baseball.

Alexander aspired to become a professional player, a goal he passionately pursued throughout high school. Through baseball, he learned one of his most crucial lessons: the importance of hard work and dedication.

Watching his father practice for hours daily cemented in him the belief that while there will always be people more talented, there’s no reason anyone should outwork him. When a high school injury sidelined his baseball career, Alexander didn’t lose that drive.

Building his First Business

Instead, Alexander pivoted, starting a coaching business using his bar mitzvah money to buy a batting cage and pitching machine. He set up the equipment in his backyard and ran summer camps for kids aged 12 to 14.

This entrepreneurial spark, combined with his love for coaching, ingrained a competitive edge and laid the groundwork for his future ventures. Alexander enjoyed helping kids develop and hone their skills. He also loved being in an environment where he could build a culture, team, and product.

Alexander learned the concept of executing not just as an individual performer but also a way to help facilitate growth in people and build a cohesive unit of top performers. He also realized that building a company and making money needed passion and interest in the concept.

Alexander admits that he wasn’t very into academics, and the areas that interested him, like anthropology and history, couldn’t really translate into a viable career opportunity. However, when faced with a problem he wanted to solve, he would approach it with a creative expression.

Discovering Entrepreneurship in College

Alexander’s entrepreneurial instincts followed him to college, where he stumbled upon his first big idea while touring campuses. Despite the digital age, he noticed campus pinboards cluttered with flyers—a highly inefficient way to communicate events and opportunities.

This observation led to Alexander’s first venture, Ulyngo: creating a digital solution to replace physical pinboards, a “Craigslist for colleges.” This app and marketplace allowed students to buy and sell, using their student emails to log in.

Despite having no formal business background, he jumped into the deep end, raising $16,900 from an angel investor during his freshman year at Chapman University.

The Ulyngo platform evolved from a D2C app that students could download into a white-labeled SaaS product college campuses could buy and integrate, facilitating student transactions in areas outside tuition.

This first taste of building a vertical SaaS B2B solution, coupled with the sale of the company a few years later, set the stage for his next big move. Alexander also realized he was more interested in a B2B, go-to-market experience and market standpoint.

Navigating the M&A Process: The Sale of His First Company

Selling a company for the first time is a rollercoaster of emotions and challenges; for Alexander, it was no different. His company was initially seeking Series A funding, but as they spoke to investors, it became clear that an exit might be a better path.

While exciting, the process wasn’t without drama. After months of work, the deal nearly fell through at the last minute, proving the unpredictable nature of M&A transactions.

Alexander saw that higher education is a very tough market from the sales perspective and has a very long sales cycle–particularly since they weren’t selling a necessity product and were trying to transition from a nice-to-have to a need-to-have.

Ultimately, Ulyngo was acquired by Modo Labs, a leader in the higher education technology space, and Alexander stayed on for a year to help integrate the product.

This experience solidified his understanding of the full entrepreneurial cycle—from inception to exit—and gave him a deeper appreciation for the nuances of M&A.

A Leap into the Unconventional: The Laundromat Business

After his first successful exit, Alexander found himself itching for a new challenge. But he wasn’t looking to build the next Silicon Valley darling this time. Instead, he considered opening a bar or restaurant—a far cry from his previous SaaS venture.

However, Alexander reconsidered after speaking with industry veterans and recognizing the operational headaches such a business would involve. An unlikely conversation with the former New England Coin Laundry Association president introduced him to the laundromat business.

Alexander had no prior experience in the industry but was intrigued by its stability and the opportunities for innovation. “I love the weird, unsexy things,” Alexander reflects.

After being at the National Association of Student Affairs Professionals Conference and the EDUCAUSE Higher Ed CIOs Conference, he was ready for a change.

Alexander was drawn to the complexity and lack of institutional technology in the laundry business, which resembled the challenges he tackled in higher education technology. He wanted to bring something different to how the vertical operated.

What started as a curiosity led Alexander to deeply immerse himself in the industry, attending laundromat conferences and speaking with operators. He also attended the Golden State Chapter Gala for the Coin Launcher Association in the Bay Area.

Alexander was fascinated by the business, margin profile, economics, and profile asset from the investment standpoint. He realized that many of the stores were owned by multi-store owners and that this is one of the largest and most stable verticals on the mainstream.

Further, this space did not have venture-backed institutional technology companies working in it, which was even more interesting for Alexander.

Launching Cents: Revolutionizing the Laundry Industry

Rather than simply buying laundromats, Alexander decided to take things a step further—he would build a SaaS platform to modernize the industry. Together with Katie Geminder, his co-founder, who had previously built tech for the SMB space, they launched Cents in 2021.

Cents is an all-in-one platform designed to help laundromat owners manage, understand, and grow their businesses. Starting with a focus on point-of-sale systems, they quickly expanded to offer a suite of tools that allow operators to streamline their operations.

What makes Cents unique is its ability to serve an industry is that, until recently, it had been largely ignored by venture capital and tech innovation. The company raised a seed round led by Bessemer Venture Partners and has quickly gained traction in an industry ripe for transformation.

Delivering Meaningful Value in the Laundry Industry

Alexander has an insightful perspective on the laundry industry, particularly when it comes to delivering real value to laundromat owners. He emphasizes the importance of providing a solution that truly improves on existing processes.

Laundromat businesses, known for their high-margin cash flow (often exceeding 30%), required innovative solutions that could justify altering such a profitable model. Cents focused on offering a superior product, which justified raising significant capital to scale their operations.

Cents is essentially a vertical SaaS product that charges a monthly subscription. It charges a very economical transaction fee to allow operators to process payments more effectively and transparently.

Typically, the core unit economics are a monthly fee of around $299 and a 4% transaction fee.

Understanding Current Revenue Streams in the Laundry Vertical

Alexander talks about how he took a step back to understand how the laundromat vertical worked. He identified four core revenue streams. Firstly, the coin-operated self-serve business with basic machines built to last more than 20 years. Manufacturers largely ignore the technological aspects.

The second revenue stream is the wash-and-fold, over-the-counter service-based with laundromats managing laundry on a per-pound basis. Services include drycleaning and washing. Thirdly, there is the pickup and delivery laundry which represents huge challenges to manage two-way logistics.

Lastly, there is commercial laundry service for businesses like coffee shops, massage parlors, nail salons, gyms, hotels, laboratories, etc., which deal with linens, towels, uniforms, and more.

Cents offers a real SaaS operating system and payment platform that integrates a hardware component. This component converts coin-operated laundry equipment to pay-by-card, pay-by-phone, and pay-by-stored-value loyalty cards. It accepts cash, EBT, credit and debit, etc.

Next, Alexander built commercial invoicing management systems, online ordering tools, fleet management tools, and more to empower the business. As a leading technology company, Cents is working to propel the business forward and grow its incremental revenue on a per-location basis.

Strategic Capital Raises and Low-Profile Growth

In 2021, Cents raised $10M in seed funding, followed by an impressive $37.5M Series A in 2022. However, they avoided publicizing their achievements, preferring to fly under the radar while concentrating on reinvesting capital into the business.

They sought to avoid attracting competitors in what Alexander calls “one of the best-kept secrets in vertical SaaS.” By staying low-profile, they could triple their business in 2022 while refining their product. To date, Cents has raised a total of close to $80M in equity.

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As 2023 approached, Alexander focused on de-risking the business while accelerating growth. This is where mergers and acquisitions (M&A) entered the strategy. The goal was to acquire companies to complement Cents’s strengths without shifting focus or creating dependencies.

Cents avoided bolt-on acquisitions or unfamiliar business units, instead opting to acquire companies they understood well, ensuring these acquisitions were accretive to their core SaaS and payments functions. That was the strategy behind its $40M Series B fundraising.

Alexander cites an example where they purchased a hardware business and rolled it into Cents’ existing operations. The company they purchased was not focused on payments, but they moved it into the infrastructure.

Aligning Cultural Values in Acquisitions

Alexander points out that any acquisition must align culturally and mission-wise. Even the best products, cash flows, and financials won’t guarantee success if the teams don’t share the same vision.

For him, it’s crucial that the company being acquired has a strong relationship with its customers, ensuring a smooth transition and ongoing success post-acquisition. The end game is not simply to grow but to reduce risk while building a generational business.

The Cents Vision–Transforming the Laundry Industry with Technology

At the heart of Alexander’s vision is a transformative outlook on the laundry industry. He envisions a future where everyone sends out their laundry, whether it’s a high-income customer seeking white-glove service or a low-income family using their welfare card at the laundromat.

Alexander believes that technology can elevate the experience for all customers and help business owners scale effectively. The key, according to him, is creating accessible technology that enables great operators to grow their businesses while improving customer experience.

The Cents objective is for customers to have the best possible experience and get the best rate of return for the service that they’re purchasing. And, for business owners and operators in this space to be able to scale and deliver good ROIs with economically sound technology to help them.

Alexander acknowledges the labor challenges facing small business owners. He believes that technology can play a crucial role in improving the work environment for employees, ultimately benefiting the overall economy.

His goal is to make laundry day more enjoyable for customers and create better jobs for those working in the industry, all while supporting mainstream businesses.

Focusing on Quality Work Over Hustle Culture

Reflecting on his entrepreneurial journey, Alexander offers some sage advice. He emphasizes the need to focus on quality work over simply working long hours. He warns against the allure of “hustle culture,” where the appearance of working hard takes precedence over actual productivity.

At Cents, Alexander has faced some of the toughest moments in his career, but he found that prioritizing mental and physical health led to better results. He underscores the importance of maintaining a healthy work-life balance. “Work smarter, not harder,” he says.

Alexander also highlights the importance of resilience. he shares a lesson he learned from Nvidia’s CEO. Success and resilience are inseparable, and resilience is forged through pain and hardship.

Throughout his career, Alexander has experienced more difficult times at Cents than ever before, but he believes the ability to endure these challenges is what separates successful entrepreneurs from those who struggle.

Final Thoughts: The Power of Passion and Problem-Solving

From running baseball summer camps to disrupting the laundromat industry, Alexander’s journey demonstrates the power of passion and a willingness to solve problems—no matter how niche or unglamorous they may seem.

His story reminds us that entrepreneurship isn’t just about finding the sexiest industry or the biggest idea; it’s about finding a problem you’re passionate about solving and diving in headfirst.

As Alexander continues to grow Cents, one thing is clear: no matter where his entrepreneurial journey takes him next, his relentless drive and love for building will remain at the core of his success.

Listen to the full podcast episode to know more, including:

• Alexander’s entrepreneurial journey highlights the power of resilience and problem-solving, from baseball dreams to disrupting the laundromat industry.
• His early ventures, like Ulyngo, set the stage for vertical SaaS success and sharpened his focus on B2B business models.
• Navigating M&A processes taught Alexander the value of cultural alignment and strategic acquisitions in building long-term businesses.
• With Cents, Alexander revolutionized laundromat operations by introducing a SaaS platform, bringing innovation to a traditional industry.
• His strategic low-profile approach helped Cents raise $80M and triple its business while avoiding competition.
• Alexander’s vision is to modernize the laundry industry through accessible technology, benefiting both business owners and customers.
• He advocates for quality work over hustle culture, prioritizing health and resilience as key factors in entrepreneurial success.

 

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