Doinn CEO and co-founder Noelia Novella © CompassList
With its tech tools, better working conditions and 5-star ratings, the Portuguese startup now wants to expand to Southeast Asia and get Series A funding
Banking on the success of global real estate rental platforms, Doinn is revolutionizing conventional cleaning and laundry services to tackle housekeeping issues faced by frustrated landlords and asset managers. With short-term rentals estimated to be worth US$84bn worldwide in 2019, the Portuguese startup was founded in 2014 to fill in the gap for such vital end-to-end property management services.
By chance, the issue of corporate social responsibility (CSR) also popped up when the company discovered that many cleaners were working without proper paperwork or contracts. Thanks to Doinn, they are now legit, getting social security, contracts, insurance and training. Doinn has also gone one step further: all staff are given an app to help them get real-time updates and bookings, so they don't make mistakes.
The company's CEO and co-founder Noelia Novella spoke to CompassList at the South Summit conference in Madrid last month.
Q: With your background in HR and property, how and why did you decide to take on housekeeping for holiday rentals?
A: In 2014, I was on a round-the-world trip with two babies and my husband, who's one of the co-founders of Doinn. We always stay in AirBnb rentals because with small kids, it's easier. I was spending a lot of time on the floor playing with the kids and we wanted to be able to compare the cleaning in AirBnb apartments with that of hotels.
We saw that the cleaning part was a nightmare, not always spotless and a problem for the landlords or letting managers to arrange. We saw the opportunity and went to cleaning companies for hotels and asked their opinions about the industry. They liked the market segment's growth and financial success, but from a logistical point of view it's basically impossible to tackle. Cleaning companies are used to sending 20 cleaners to the same address and spending a few hours there. And I was telling them I need 20 cleaners at the same time to do jobs spread all around the city.
So that's where we'd step in. We began to work on our platform to link first-class housekeeping services with platforms like AirBnb.
Initially, I thought there's no software for the cleaning industry for vacation rentals, but actually the whole housekeeping sector had no technology at all! It really is a very traditional sector. We still need to sell the value of technology to them. It's a huge challenge but also a huge opportunity because once they become familiarized with our technology, the cleaners are asking for more solutions to solve all their pain points.
Is the cleaning fee charged on sites like AirBnb related to your business?
AirBnb's fees are unrelated to our business. The property managers are the ones getting the money because the cleaning fee accounts for a substantial amount of the rental package.
I've been talking to companies like AirBnb from the very beginning because it's a win-win for them in Europe. They like the idea of a platform to provide on-demand housekeeping but their headquarters are not in Europe. It isn't sexy enough for these companies and they prefer to go with more appealing consumer services like tours and experiences that they could do in-house.
What are your long-term objectives?
We definitely see ourselves as going global. Our objective is for AirBnb and others to integrate our API. Hosts can opt to automate the cleaning and laundry services on every checkout for each apartment profile setting. We will share the revenue with Airbnb as affiliates, in return for Doinn's professional, legal and trained cleaners to provide quality services according to the tenants' expectations.
Which brings me to ask about your company's CSR.
We didn't even really think about the social responsibility part when we started. We work with over 300 cleaners and found that many of them came from the black market. Thanks to us, they now get social security, insurance and employment contracts with the cleaning companies. They're also part of a team, so if they have flu they won't have to work.
How is it that in hospitality, people working in the same hotel like a receptionist have security and a contract, but the cleaner who's paid less and works more doesn't have this?
In such a gigantic and unwieldy sector, how did you get your business get off the ground?
We first started in Lisbon. We developed just a landing page to generate interest for providing on-demand cleaning services in Lisbon, linking rental property managers with reputable cleaning companies. We earn commissions from the service providers.
We learnt the needs of property owners by engaging with them. There were just two of us, with my husband developing all the technology. Then, we wanted to test the idea as a platform as we started getting more and more clients. We brought in another co-founder, Weronica Figueiredo, to take care of the financial side of the business.
We're now in 92 cities across Portugal, Spain, France and the UK. We expand through our clients, such as property managers for AirBnb and other rental platforms, because they want to grow faster and grow internationally. To do this, they need to start from scratch in a city and look for a team of cleaners and train them. It would take them forever to expand, so now they can call me and say, “What about this city? I've an opportunity here, can you set it up in a matter of weeks?” Often we can do so, and we expand.
How have you been funded and what are your investment needs and expansion plans now?
We got some funding in 2016 from VC Portugal Ventures; before that we bootstrapped. In July, we closed another round from a Spanish angel investor to expand in our four core markets and others in Europe like Ireland. Apart from going where rentals are booming, we also follow our clients. It's much easier to enter a city where we already have clients.
We're already talking about Series A funding to go to Southeast Asia, to bring premium hospitality standards to Asian AirBnbs in the middle of next year. We chose it because it's the fastest-growing market in the world.
The US is another priority. We have a partnership with a software provider from Spain that's growing fast in Miami. They told us to go there, but in our experience, the market is already mature there with more players and it would mean getting into a pricing war.
How is your business affected by the regulation of the property rental sector?
Amsterdam was the first city with really tough conditions for Airbnb, it doesn't make sense for us to go there if there's a limit of 90 days rental per year. The problem with governments is that they don't do their homework and make silly demands like having a private exit to the street. They forget how much money we're bringing to the city by boosting the businesses servicing the vacation apartments. On the noise issue, city halls could require the use of cheap IoT technology, like a small sensor box in the rental apartment that sends a notification if the noise is too loud.
I must say, however, I'm in favor of regulation because our real competition are the cleaners who work freelance and don't provide invoices. It's far better if they have to pay taxes and the cleaning sector become legalized. Actually in Madrid, Barcelona and Malaga, the authorities perform inspections to check that all those employees are legal. That's an advantage for us.
How do people hear about your services? Besides pay-per-use, how does the business model work?
Property managers know about us due to our hard work in digital marketing, partnerships with their software and mouth-to-mouth referrals. We also attend cleaning trade conferences. Yes, they do exist, and we are on every panel in the travel industry events. If they want to talk about cleaning, there aren't many choices!
We monetize through a commission agreement with the cleaning companies. For them, this is cheaper than having a salesperson for sure. We also offer in-house management software and give them clients, so we're like their sales force. The commission varies according to the number of bedrooms because beds take up the most time. The rates are also based on the city, time and day of service. For example, nights and weekends cost slightly more.
We also offer industrial laundry services, all the unsexy stuff! We provide toiletries so the property managers don't need to go there. If a property manager is good, they can have a checkout and check-in the same day within a three-hour window. Our USP, apart from being the only on-demand tech cleaning platform in our markets, is that all of our cleaning companies have experience in these sectors, some for more than 25 years. They have something a freelancer doesn't have, reputation. When we open a market, we only do so when we can find cleaning companies that we can really trust that offer hotel-level quality services.
How does the platform work for the user?
We have about 6,000 apartments at the moment. We have landlords with day jobs and renting out just one apartment. There others who have beach apartments but they live in the city, so they can just call us last minute or book on-demand from our website. They account for 24% right now. The rest of our clients are property managers. The industry is becoming very professional because the algorithms used by Airbnb and Booking.com are becoming too complex for untrained staff. Professional letting agencies have trained staff who work with more than one platform, even 100.
We are a pay-as-you-go platform. There are two ways of buying services from our platform, automatically or by selection. For single property owners or those with a few properties, they just click on two buttons and buy the service, pre-paid and on-demand. Then, there're other ad-hoc users who normally have a cleaner, but outsource the work when their regular cleaners are not available. There're also those who need extra help during peak holiday periods. It doesn't make sense to hire new people, or take on temp staff, when you can outsource these jobs to companies like Doinn.
How does the platform work on the service provision side?
We use an events calendar. If there's a major event, we'll let the cleaning companies know in advance, so that they are prepared and hire more people. They've become more agile since working with us. Workloads have improved because they don't have people waiting for a service and are not short of cleaners for big jobs.
The cleaning company sees a list of tasks to be done, including the check-in/out information. Doinn will identify the previous cleaning staff who know how it's done before and send the jobs to the relevant cleaners via the Doinn app. The technology also matches cleaners to jobs within a local area so that they can quickly go on to another job nearby without having to commute further afield. We built the cleaner's app after listening to the cleaners' problems, finding ways to help them using technology. That's what makes us different, the cleaners decide what they need. For example, we integrated GoogleMaps into the app to help them to quickly locate the rental properties.
How automated is your platform in terms of managing check-ins and -outs?
We have many clients, almost all of them are property managers who prefer to leave all the operational side to us, so that they can concentrate on generating revenue. They can use software, usually property management systems (PMS), that are like a CRM. We integrate our API with their systems, as well as channels used by property managers like Rentals United, Bookingsync and Hostaway.
We automatically receive the property reservation calendars and convert each checkout into a cleaning service. Our services can also be automatically changed to another date, or resold, when not required according to any reservation changes.
For us, it's been a bit crazy to manage because there are more than 1,000 types of PMS in the world. The software created and used now didn't even exist when we first started out and the property companies did their own cleaning. Our API was a perfect moment for us, for Portugal and Spain. But we were a bit late for Paris, for example, because the software problems there were already solved earlier.
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