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HomeJoy Declares Bankruptcy

On Tuesday, December 15, the house and cleaning repair company known as HomeJoy filed for Chapter 11 bankruptcy. HomeJoy is best known for hiring “The Hoff” or David Hasselhoff to star in a commercial promoting their company. It was a sibling owned venture by Adora and Aaron Cheung. They started HomeJoy back in 2013 and raised a considerable amount of money, $38 million, to get their company started. Many investors included Google Ventures and First Round Capital. Since July of 2015 they were offering $25/hr home cleaning services in five different countries. They were expanding their business plan to include home repairs and carpet cleaning.

The Cheung siblings announced their company shut down in a blog post. Despite a steady flow of revenue the shut down and bankruptcy are said to be caused by worker classification lawsuits. This is a frequent issue for start up companies because it is cheaper to simply hire people on board with the company as contractors. If the company has to recognize them as employees then that can drive labor costs up and this doesn’t sit well with many start ups who are in it for the money.

A competitor of HomeJoy is Handy is still able to provide the home cleaning services that are highly sought after. This company was founded back in 2012 and was formerly known as Handybook. Oisin Hanrahan, the mastermind behind Handy, realized during his time in Budapest that it was extremely difficult to find handymen who were reliable and trustworthy to complete the apartment renovations he was doing. Once moving to the U.S., Oisin and a former classmate, Umang Dua, realized the same could be said about the United States. Their solution to the problem was to create Handy, previously HandyBook.

Handy has taken things to the next level. They not only provide home cleaning services but they also furniture assembly, interior painting, moving help, and even plumbing work. This is nbt your average start up company. Handy is located in over 30 locations. Their services are in most major cities in the U.S., Canada, and the UK.

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