Who will clean our homes in the future?

Home cleaning service providers in Finland have typically been small companies operating in restricted geographical areas. Nowadays, however, the industry is becoming more organized and efficiency-oriented, as larger, sometimes PE-backed national players have entered the market. Why is this shift occurring, and what can we expect from the industry going forward?

Service providers benefit from changing attitudes towards home cleaning

Home cleaning services have perhaps been historically associated with stigma. People have taken pride in cleaning their own homes, and using external help may not have been seen as appropriate. However, I believe the situation is changing. Younger generations do not feel the same pride in doing everything by themselves, and, as people seem to be ever busier, they prefer to use the spare time they have for something else than cleaning. The need for cleaning remains nonetheless – we still want to have our homes cleaned regularly, one way or another. This should provide optimal conditions for home cleaning service providers to gain traction.

A developing market attracting investments

The home cleaning business is indisputably changing in Finland. The industry is attracting attention and investments from both PE houses and industrial players. Intera Partners and Teollisuussijoitus (Tesi) have invested in Stella, for example, and L&T acquired moppi.com a few years ago. Both Stella and moppi.com are active in home cleaning. Similar changes have happened internationally. For instance, Happy Helper, a home cleaning platform in Denmark, recently became a publicly listed company and raised close to $8m worth of funding in the process.

Significant market potential that is not being explored

In 2018, Happy Helper estimated that, while 51 % of Danes would like to have cleaning help, only about 8 % actually use home cleaning services. We have found similar percentages in studies we conducted in Finland. In other words, there is huge market potential and demand that is not currently accommodated. Based on my experience, I would say that the main reasons for this have been a lack of easy availability of cleaning services, and a lack of transparency and awareness of home cleaning services among the general public. This, in turn, has been at least partly generated by the almost complete absence of digital solutions utilized by service providers.

Of the home cleaning players in Finland, it seems that only Freska has an app that customers can use to order cleaning – which is somewhat surprising. Home cleaning appears to be lagging behind in terms of digitalization. Building a cleaning service on a digital platform could thus be a way for service providers to differentiate themselves from peers and to increase transparency and the awareness of their services.

Just home cleaning, or other services as well?

It is difficult to say in which direction the market will develop in the future, but I predict that it will continue to mature and that it will experience increasing consolidation. It is also possible that the meaning of the “home cleaning” concept will evolve. People may be ready to pay for a wider range of services, and the concept of buying time, instead of a specific service, may gain in popularity. Thus, in the future, you may be paying your service provider not only to clean your home, but also to take your clothes to the dry cleaner, or to replenish your groceries and home supplies, and so on.