A London-based investment firm is betting on the United States car wash market, what it calls an antiquated industry, with plans to raise $100 million to fund the expansion of a new high-tech concept.
Henley Investment Management opened the first location of AquaSonic Car Wash at the end of last month just outside of Tampa, Florida, with plans to roll out the brand to 100 locations across the country.
AquaSonic's unique business model generates 80% of revenue from subscriptions and it picks its real estate in urban areas that are convenient for motorists, according to a statement from Henley.
AquaSonic's first location at 6818 U.S. Highway 19 in New Port Richey, Florida, processed 450 vehicles on its opening day with over 1,300 memberships secured in the following weeks, Henley said. The Pasco County city sits within metropolitan Tampa-St. Petersburg-Clearwater that's roughly 25 miles north of downtown Tampa.
The $15 billion annual United States car wash industry "is an extremely fragmented sector populated by a lot of small" and "independent operators with only a few fast-growing brands,” said Ian Rickwood, CEO of Henley, in the group’s statement.
AquaSonic launched in Florida as the car wash industry is heating up. El Car Wash, a Doral, Florida-based competitor, has acquired nearly a dozen locations throughout the state and launched its first Jacksonville shop in April. At the same time, Plano, Texas-based Zips Car Wash filed for Chapter 11 bankruptcy protection in February before emerging in May with reduced debt and new credit.
“It is a hugely scalable business with tremendous scope for growth and given the macro environment and investment opportunities we are seeing," in the United States, Rickwood added. "This is comfortably the best risk-adjusted return.”
AquaSonic shares its headquarters with Henley's office in West Palm Beach, Florida. The investment firm has committed $20 million to launching the chain in the United States and has made “significant progress” on its next round of fundraising, where it plans to allocate $100 million to support the chain's expansion.
By the end of the year, Henley expects to have four locations open in Florida, in Tampa, Orlando, Palm Beach and Jacksonville, according to the statement. A total of 14 sites throughout Florida have already been secured for future locations. The group’s long-term goal is to establish over 100 sites throughout the United States with an eventual expansion to Europe in the works, according to Henley.
Rickwood added that although the car wash industry is a "popular and well-established sector," the industry is "crying out" for modernization, with Henley aiming to provide a "better, quicker, more sustainable service" for motorists.
AquaSonic is the only car wash company in Florida to deploy 120-degree water in all of its washes, nine-wheel scrubbers, and a 140-foot conveyor that ends in the so-called AeroZone, a high-powered drying system engineered by Formula 1, according to the statement.
"Our team has spent years developing and fine-tuning the product," said Rickwood in the statement.