This company is no longer in business. Investors can get details about any potential exits or failures here.

Pristeem

Pristeem

Early Stage

Take care of the clothes you love

Take care of the clothes you love

Overview

Raised to Date: Raised: $24,371

Total Commitments ($USD)

Platform

Wefunder

Start Date

07/28/2020

Close Date

02/22/2021

Min. Goal
$50,000
Max. Goal
$1,070,000
Min. Investment

$100

Security Type

SAFE

Series

Seed

SEC Filing Type

RegCF    Open SEC Filing

Valuation Cap

$8,000,000

Discount

20%

Rolling Commitments ($USD)

Status
Not Funded
Reporting Date

02/27/2021

Days Remaining
Not Funded
% of Min. Goal
Not Funded
% of Max. Goal
Not Funded
Likelihood of Max
Not Funded
Avg. Daily Raise

$117

# of Investors

81

Momentum
Not Funded
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Year Founded

2019

Industry

Consumer Products, Goods & Services

Tech Sector

Cleantech

Distribution Model

B2B

Margin

Medium

Capital Intensity

High

Location

New York, New York

Business Type

Growth

Pristeem, with a valuation cap of $8 million, is raising funds on Wefunder. The company manufactures and sells a self-service garment cleaning device. The device uses steam and an organic chemical to clean an outfit in less than ten minutes. The process makes garment cleaning gentler than hand wash and less expensive than dry-cleaning. Naren Inukoti, Rahul Sheth, and Vishva Somaya founded Pristeem and have raised over $920,000 since its founding. The current crowdfunding round has a minimum goal of $50,000 and a maximum goal of $1,070,000. The funds will be used for Design for Manufacturing, sales and marketing, and inventory. Pristeem has cleaned over 1,000 outfits of more than 200 users and has signed seven contracts with residential and commercial property management companies.

Summary Profit and Loss Statement

Most Recent Year Prior Year

Revenue

$10,000

$0

COGS

$20,000

$0

Tax

$3,928

$0

 

 

Net Income

$-10,000

$0

Summary Balance Sheet

Most Recent Year Prior Year

Cash

$261,017

$0

Accounts Receivable

$0

$0

Total Assets

$263,248

$0

Short-Term Debt

$-10,082

$0

Long-Term Debt

$20,000

$0

Total Liabilities

$9,918

$0

Financials as of: 07/28/2020
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Summary

Pristeem has been selected as a “Deal to Watch” by KingsCrowd. This distinction is reserved for deals selected into the top 10%-20% of our due diligence funnel. If you have questions regarding our deal diligence and selection methodology, please reach out to hello@kingscrowd.com.

The Pristeem founders are part of traditionally underrepresented groups in startup investing.

Analysis written by Katy Dolan.

Next Section: Problem

Problem

Americans spend up to 100 hours per year doing laundry, using over 12,000 gallons of water in the process. Washing clothes is time-consuming, annoying, and harms the environment. Yet, there’s only one other alternative to clean garments, and it’s not a great solution — dry cleaning. 

Dry cleaning is also harmful to the environment. The chemicals used in dry cleaning may be seeping into our air, soil, and water, potentially causing cancer. It’s also even less convenient than doing laundry. Dry cleaning typically requires hauling your clothes to a shop in the neighborhood, then waiting several days for garments to be cleaned and paying a sometimes-exorbitant fee. 

Home appliance manufacturers like Samsung and LG offer at-home dry cleaning units. However, those units have a $1,000+ price tag. Most consumers probably won’t be buying one anytime soon. Therefore, there is currently no way to save significant time, money, and environmental impact while cleaning clothes.

Next Section: Solution

Solution

Pristeem produces compact dry cleaning units for apartment buildings, offices, hotels, and other shared spaces. Residents, workers, or visitors can pay around $1 per garment to dry-clean their clothes in about ten minutes from the comfort of their lobby or other community area. Pristeem’s shared-space units are meant to make clothes washing quick and cheap. Plus, Pristeem’s method of cleaning does not use PERC, the environmentally-harmful chemical found in many dry cleaning shops. 

However, it is important to note that Pristeem cleaning is not a full substitute for dry cleaning. Pristeem units “refresh” clothes with a light steam process, reducing wrinkles and odor. These clothes are not fully dry cleaned and may require supplemental cleaning on occasion. 

Pristeem partners with property developers and managers to place a Pristeem unit in a shared space. These partners can pay an up-front fee to install a Pristeem unit or they can opt for a monthly subscription instead. These up-front fees or monthly subscription payments are Pristeem’s primary source of revenue. The company also generates income by splitting the revenue from each roughly $5 cleaning transaction.

Pristeem is currently working with five residential or commercial property management companies and two office buildings. It also reports that more than 15 more properties are in the current sales pipeline. So far 200 unique users have cleaned clothes with Pristeem so far, with a 4.9 out of 5 customer satisfaction rating and an 84 net promoter score (NPS) across pilots and contracts. 

Pristeem generated $10,000 in revenue in 2019 — the company’s first year in business — and operated at a net loss of $10,000. Pristeem graduated from Alchemist Accelerator and has raised just under $1 million from angel investors and a hardware venture capital firm in New York. 

Next Section: Team

Team

Pristeem was founded by three friends with diverse backgrounds in software engineering, hardware engineering, and business consulting. Pristeem’s CEO, Naren Inukoti, graduated from the University of Texas at Austin in 2016 with a degree in computer science. He subsequently worked as a Software Engineer at Uber before founding Pristeem.

COO Rahul Sheth graduated from the Georgia Institute of Technology in 2015 and worked for IBM as an Application Development and Innovation Consultant for several years. He also previously co-founded two companies that have since closed. 

Vishva Somaya, Pristeem’s CTO, also graduated from the University of Texas at Austin, earning a degree in Aerospace Engineering in 2017. He later worked for Pratt & Whitney — a leading aerospace manufacturer — as a Repair Process Engineer before leaving to start Pristeem. 

Next Section: Other

Growth Plan

In the short term, Pristeem is focused on building relationships with property managers to launch into more residential and commercial properties. Pristeem has secured initial contracts with managers under a top-down approach thus far. The company hopes to begin expanding horizontally within developers’ large portfolio of properties to achieve more rapid growth. 

Beyond growing revenue through sales, Pristeem is focused on scaling manufacturing and refining user experience with new features. Pristeem hopes to raise a Series A funding round in the next 12-18 months, with the ultimate goal of becoming the leading household name in quick cleaning nationwide. 

Next Section: Why We Like it

Why We Like it

  • A creative solution in an under-innovated space: Dry cleaning is a proven annoyance, and there truly is a gap in the market between laundering clothes at home (time-consuming, ruins some types of clothes) and dry cleaning (time-consuming, expensive, unreliable). While companies like ByNext and Rinse are building concierge-like dry cleaning delivery solutions, those business models are difficult to scale due to the high-touch nature of service delivery. Pristeem offers a unique, scalable hardware/software solution with a savvy B2B business model that seems poised to capture significant market share in laundry and dry cleaning.

  • Numerous opportunities for expansion: Pristeem is currently focused on apartment buildings and offices — logical candidates for quick-laundering units in shared spaces. As Pristeem grows, though, there are many opportunities to place units in a diverse variety of places: hotels, Airbnbs, manufacturing environments where workers wear uniforms, co-working spaces, and even community staples like grocery stores where people are already used to soliciting services like coin exchange and key duplication.
  • Well-diversified team with strong advisors and investors: While Pristeem’s founders are young, the fact that the company is powered by three full-time professionals with established relationships and a diverse range of specialties is a strong signal for any startup. Moreover, Pristeem has already graduated from a leading accelerator program and gained a roster of investors and advisors to guide the company, including venture capitalists and successful founders. Pristeem is well along the standard successful startup pathway with capital buy-in and full-time effort. This gives the company an advantage for scale over ventures that run more like slow-growing small businesses. 

Next Section: Rating

Rating

Pristeem offers an innovative solution situated between traditional laundry and dry cleaning. It can leverage a strong team and solid capitalization to expand into a large network of shared spaces. With strategic plans for scale through horizontal adoption within property management companies and a Series A round on the horizon, getting in on the ground floor of Pristeem may be a good opportunity for investors. 

That being said, Pristeem is still a very early-stage company. While it has closed contracts with a handful of properties, only 200 unique users have actually laundered clothes in Pristeem units. It is too soon to tell whether Pristeem truly solves consumers’ core problem — particularly because Pristeem laundering is not a substitute for full dry cleaning. It is possible that users don’t see the use for Pristeem and would prefer to keep dry cleaning if they’ll already have to do so on occasion anyway. Because product-market fit has not yet been demonstrated, Pristeem may need to pivot to meet the true needs of consumers. The company’s young founding team may not have the expertise necessary to lead through those changes in focus. 

Pristeem’s exact path to exit is somewhat unclear, given that there are few successful companies to study in the laundry and dry cleaning space. Rinse has raised over $20 million in funding and has the clout to acquire competitors as it did with OffToYou earlier this year. Therefore, Pristeem’s most likely exit scenario may be acquisition from a larger company in an adjacent space. It is also possible — though unlikely — that Pristeem’s bid to become the leading nationwide quick-cleaning provider is successful and the company builds market share and brand recognition toward an IPO. 

Pristeem is one of those rare companies that has developed a truly unique idea and brought it successfully to market. The strength of Pristeem’s compelling clothes-cleaning unit sold via B2B partnerships with properties are promising signals for investors, as are the company’s opportunity to expand to additional B2B verticals in the future with the help of capital and guidance from advisors and investors. Therefore, Pristeem is a Deal to Watch.

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Pristeem on Wefunder
Platform: Wefunder
Security Type: SAFE
Valuation: $8,000,000

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