State Of Private Equity In The Car Wash Sector

Is it even worth getting involved as a first time owner, given all the “big” money coming in? Doesn’t private equity already own the whole industry? Who are these people calling me every day asking me if I will sell my wash?

Key Takeaways

  • There are several different types of car washes that can be categorized by several different terms, including machinery, structure, and washing method.
  • Car washes can be further described by their features, like manual, automatic, in-bay, tunnel, conveyor, friction, touchless, and more. These terms can be mixed and matched to discern between the many different types of car washes.
  • Understanding the different types of car washes, as well as the cost of building a car wash, is critical in successfully making the purchase or sale of a car wash business.
June 10, 2021

State Of Private Equity In The Car Wash Sector

Is it even worth getting involved as a first time owner, given all the “big” money coming in? Doesn’t private equity already own the whole industry? Who are these people calling me every day asking me if I will sell my wash?

Is It Worth Getting Involved As A First-Time Owner?

Is it even worth getting involved as a first time owner, given all the “big” money coming in? Doesn’t private equity already own the whole industry? Who are these people calling me every day asking me if I will sell my wash?

These are questions I get asked all the time when speaking to current and prospective wash owners.

Private equity’s presence in the market is an important topic for the entire sector, regardless of your size and status in the industry. New money from these institutional investors impacts everyone.

Consolidation is occurring and has been for several years. Private equity is in the space — and already is a substantial player. There is no doubting this, and it’s understood. What is not nearly as clear is the extent to which private equity is involved in the industry.

Below you will find an infographic that provides a simplified illumination of tangible numbers and magnitudes.

The answer is that private-equity-backed carwashes only account for a low, single-digit percentage of the carwash population in the U.S. This is true whether you want to count all carwashes (as the infographic does) or if you only want to count conveyor washes (which roughly doubles the market share). Wall Street and investment funds are coming into the arena at a rapidly increasing rate. The ripple effects this will continue to have, along with the projected growth trajectory and market share capture, are an entire story on its own. But for now, know that as of today, institutional private equity is still a small player in the carwash space.

What’s Next?

The question now becomes, what does this all mean for owners and operators? Check out our more in-depth piece that explores the impact that new money’s involvement in the car wash sector may have on owners, operators, and the industry as a whole.

Frequently Asked Questions

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