Berlin-based home-cleaning service Helpling pursued serious discussions to acquire its troubled U.S.-based rival Homejoy, but decided last month not to pursue an acquisition after getting a close look at the company’s financials, according to a source familiar with the negotiations.
Word of the talks is the latest sign that San Francisco-based Homejoy may be in trouble and looking for an exit of some kind.
Just 18 months ago the company, founded by the brother-sister team of Aaron and Adora Cheung, appeared to be on the road to an IPO after it raised $38 million to tackle the suddenly white-hot home cleaning market.
Even last fall, Homejoy was talking up its plans to move into international markets in Paris, Munich, and Hamburg, after setting up shop in London and Berlin earlier in 2014.
But the competition among startups that let people book home-cleaning services online has become fierce. Just in the past year, the U.K.’s Hassle.com raised $6 million in financing. And services that provide a wider range of home improvement services — like Seattle’s Porch.com, which raised $65 million earlier this year — have expanded into home cleaning booking as well.
Earlier this week, TechCrunch reported that San Francisco-based Handy is in talks to acquire Homejoy. But apparently Handy is taking a run after Helpling walked away from a deal, according to a source.
Helpling emerged from Rocket Internet’s German startup factory last year and has been on a tear ever since. In just over a year, the company has expanded to 200 cities in Austria, France, Germany, Netherlands, Spain, Italy, Sweden, Canada, Brazil, Singapore, Dubai, and Australia.
Along the way, Helpling acquired German rivals CleanAgents and Familienhelfer, as well as Singapore’s Spickify, for undisclosed sums. In addition, Helpling raised $17 million in venture capital in December and another round of $45 million in March.
With ambitions that are clearly global, it makes sense that Helpling would take a hard look at Homejoy as a way to enter the U.S. market.
The source described the talks between Helpling and Homejoy as being in “advanced stages.” But after closely examining Homejoy’s financials, and considering the latter’s decision to close down in Canada, the deal didn’t seem as attractive, according to the source.
A spokesperson for Homejoy has not responded to a request for comment. A Helpling spokesman declined to comment.