Tsunami is a car wash company that uses modern data analytics to acquire, engage, and retain subscription customers while increasing customer lifetime value.
What does the car wash industry in the U.S. look like, and why did Point72 Hyperscale decide to invest in a car wash business?
Point72 Hyperscale is a private equity strategy that uses applied artificial intelligence to scale and modernize market-leading companies. We focus on identifying and investing in data-rich industries and companies where applied AI can help improve products and services and multiply the power of the workforce.
The U.S. has a roughly $12 billion car wash market that is growing at a 3.4% annual growth rate overall. The segment of the market in which Tsunami operates – the express exterior car wash segment – is growing substantially faster. Express exterior washes combine convenience and affordability in a package that allows customers to wash more frequently and save money through subscription packages. Well-run express exterior car washes produce significant recurring revenues at attractive margins, which we think provides an optimal business model in which to use modern analytics to drive additional value for customers, shareholders, and employees.
Why did you decide to invest in Tsunami?
Tsunami’s founders have over 20 years of experience in the car wash business and shared our excitement in the potential to drive significant growth while using AI/ML to create a market-leading customer experience and business model. Tsunami’s existing sites were all built within the last few years to high standards and are located in a region with significant room for additional greenfield development. They’ve build a strong reputation in those markets through great execution and customer satisfaction.
How can machine learning technology improve a car wash business?
Once we invest in a company, Point72 Hyperscale’s “Foundry” team of data scientists, engineers and product managers engage with portfolio companies to integrate new technology into their business operations and make key hires to help set the company up for self-sustaining success.
We believe AI/ML can be used at Tsunami to optimize marketing efforts, reduce customer churn, and enhance selection for new sites. Essentially, we believe modern analytics will enable Tsunami to be best-in-class in acquiring, engaging and retaining subscription customers by thoughtfully reaching out to them, increasing the number of customers who sign up for subscriptions, and rewarding and retaining loyal customers.
How can you use data to improve customer sales?
Our goal as we work with Tsunami is to enhance the customer experience. That includes finding underserved customers, creating wash packages and services that address their needs, and delivering an experience that keeps them happy and motivated to come back for more. Our data strategies are focused on customer awareness, engagement, and satisfaction. That information informs how we run our sites and where we can build or acquire new sites to serve more customers. Ultimately, we believe that using data to serve customers will lead to better business outcomes.
 IBISWorld, US Industry Report: Car Wash & Auto Detailing in the US, November 2020