Washswat Cuts Work Time by 30% with AI, Nears Profitability at a Critical Juncture

Productivity Boosted by AI-Based Process Automation
B2B2C Model Targets Lifestyle-Oriented Client Base
Enhanced Service Quality Strengthens Customer Trust

Washswat, the operator of the non-face-to-face laundry platform “Setak Teukgongdae,” is on the verge of turning a profit. Since its establishment in 2015, Washswat had consistently posted losses, falling into a state of complete capital erosion in 2020 and again in 2023. The company even received an “uncertainty regarding going concern” opinion from external auditors, pushing it into a crisis. There is growing attention on whether Washswat, which has been striving for a dramatic turnaround through a sweeping AI-driven transformation to escape the quagmire of deficits and capital erosion, will finally put an end to this reversal drama.

According to the electronic disclosure by the Financial Supervisory Service on May 29, Washswat recorded an operating loss of 1.2 billion won last year. This is a reduction of more than 74% compared to the previous year’s 4.6 billion won. Net loss for the same period also dropped significantly, from 6 billion won to 1.9 billion won. Last year’s revenue stood at 33.3 billion won, maintaining a similar level for two consecutive years. Although revenue growth slowed, the sharp reduction in losses has increased expectations for a possible annual profit turnaround this year.

A Setak Teukgongdae representative stated, “In terms of operating profit, we recorded monthly and quarterly profits in the first and second quarters of this year,” adding, “In particular, first-quarter EBITDA grew by more than 2,600% compared to the same period last year, continuing a clear trend of profitability improvement.” EBITDA improvement indicates that cash flow from business operations has improved and is used as an indicator to evaluate growth potential even while in the red.

The maximized use of AI is cited as the main driver behind this business performance. In June 2021, Washswat launched its AI-based smart factory in Yangju, introducing automated processes that reduced total laundry time by more than 30%. The factory building team also visited and analyzed laundry factories and logistics systems worldwide, adopting or developing new processes, which led to remarkable productivity improvements over the past two years. For shirt ironing, over 80% is now handled automatically by machines and robots, and AI analysis has simultaneously enhanced both productivity and quality. These process innovations have resulted in overall cost reduction, positively impacting the company’s profit and loss structure.

Differentiation in the business model has also contributed to the company’s performance. Instead of the traditional B2B (business-to-business) model, Washswat focused on the B2B2C (business-to-business-to-consumer) model for differentiation. The strategy targets “lifestyle-oriented B2B2C clients” with repetitive and clearly defined quality standards, such as Airbnb hosts and single-person hair salons, rather than hotels and fitness centers. This approach aims to secure steady demand and establish a stable, long-term partnership-based transaction structure that goes beyond simple laundry outsourcing.

This has also had a positive effect on large-scale investment attraction. Last year, Washswat successfully completed a 7 billion won Series C bridge investment round. Led by WeVentures, existing investors such as UTC Investment and Strong Ventures participated in follow-up investments, bringing the total accumulated investment to 51 billion won as of the end of last year. As a result, total equity reached 1.1 billion won last year, allowing the company to escape the state of complete capital erosion of 1.5 billion won in 2023.

Setak Teukgongdae is focusing on enhancing service quality this year. Since January, the company has introduced a quality assurance refund policy, streamlined A/S procedures, and refund options to strengthen customer trust. Recently, it opened a new 300-pyeong premium laundry center and officially launched the “Premium Padding Care” service. The company has assigned padding care specialists and announced plans to provide unconditional re-laundry and compensation of up to 5 million won in case of any issues. A Setak Teukgongdae representative stated, “Enhancing service quality will increase customer repurchase rates and trust, and will be a key factor driving market expansion from a long-term perspective.”