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South Korean home cleaning startup Miso joins Y Combinator’s new class

TechCrunch TechCrunch 6/06/2016 Catherine Shu

Miso, a home cleaning service in South Korea, wants to sweep up some ambitious growth goals after being accepted into Y Combinator’s summer class. The startup’s founders will join the accelerator program this week.

Miso, which lets customers book next-day cleanings through its app and websites, was launched last year by Haksu Lee and Victor Ching.

Ching was chief product officer at Seoul-based food delivery startup Yogiyo before it was acquired by Delivery Hero in 2014. After leaving Yogiyo, Ching decided he could take what he had learned working in food delivery and apply it to a new vertical.

Ching and Lee say South Korea’s home cleaning service market is worth $5 billion and growing thanks to South Korea’s increase in dual-income households. The startup, which has raised $500,000 in pre-seed funding, is targeting revenue growth of 10 percent every week.

Now available in Seoul and neighboring cities Incheon and Gyeonggi-do, Miso currently has about 10,000 customers, 700 of whom use the service more than once a week. Miso has signed up 1,000 cleaners and about half get more than one booking per month.

Miso is among several startups in Seoul, including WaHome (which raised a $1 million seed round last year) and Daeri Jubu, that were launched as an alternative to traditional cleaning agencies.

Agencies usually charge a membership fee, require bookings to be made at least a week in advance, and often expect cleaners to report at a call center and wait until they are sent to a job. Apps give both cleaners and customers more freedom.

Miso wants to set itself apart from other cleaning startups by simplifying its user interface and pricing structure as much as possible. The company currently only offers two options—a four- or eight-hour session—as an alternative to the complicated menu of à la carte services used by many traditional agencies, which are charged on top of a base fee. Customers can request specific tasks, but Miso’s cleaners otherwise just try to do as much as possible in the alloted time.

“Traditionally, businesses offer four or eight hour services, but they charge you more for the same amount of time depending on the size of your house. I didn’t really think that made a lot of sense, because you are still paying for four hours. Some of the pricing structures look like a mini Excel spreadsheet,” says Ching.

“It’s a different pricing table if you want to have a load of laundry done or some kind of cleaning for your fridge. Everything needs an additional fee,” adds Lee. “It’s a big pain point for existing customers and we wanted to simplify it.”

As the business scales up, Miso’s founders want to start offering shorter sessions (as little as two hours) to appeal to people living in small apartments, as well as same-day bookings. Like other on-demand startups, however, Miso has to balance its growth plans with keeping operating costs sustainable while making sure contractors get enough bookings to stick with the platform. Ching and Lee say that cleaners currently earn about 60 to 100 percent above South Korea’s minimum wage (currently 6,030 won, or about $5.18, per hour) after Miso takes a commission.

Cleaners are interviewed before they can start taking jobs through Miso and, like Uber, the startup’s customers rate each service on a five-star scale. The higher a cleaner’s average rating, the more work gets referred to them.

“In terms of ensuring that cleaners get enough work to make sure they stick with us, that is something we are constantly trying to analyze,” says Ching. “I wouldn’t say we have perfected it yet, but there is obviously a certain threshold for when we onboard and how many sessions cleaners do within their first week or two to get them to stick with us.”

“That’s the reason why technology can help innovate the industry,” adds Lee. “We can predict cleaners’ schedules and assign jobs to them very effectively. That will help our entire platform.”

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