Jason Derulo Wants You To Know His Car Wash Investment Is Worth $2 Billion. We Have Questions…

Jason Derulo has had a very successful music career. He has sold millions of singles, built a massive social media following, toured the world, and turned himself into one of the better examples of a pop star who understood early that celebrity could be monetized far beyond albums and concerts.

But if you have watched Derulo give interviews over the last few years, you may have noticed something interesting:

He really, really wants you to know about his car wash investment: Rocket Carwash. 

Jason first mentioned his car wash investment in his 2023 self-help book "Sing Your Name Out Loud: 15 Rules for Living Your Dream." In the book, he mentioned that Rocket Carwash was valued at $2 billion.

Around the time of the book's release, Jason sat down for a 30-minute interview with Forbes. At around the 4-minute mark, the interviewer asks about Rocket Carwash, which Jason describes as "changing the way that people get their cars washed." He compared Rocket Carwash to how Netflix disrupted movies and television and how Spotify disrupted the music business. And once again, he mentions that Rocket Carwash is supposedly worth $2 billion.

What is this magical innovation that has revolutionized how people get their cars washed? Are they using a special proprietary system of futuristic chemicals and waters? AI-powered Large Language Model to optimize dirt extraction? A new car wash mechanical technology that speeds up the process?

Nope. The innovation is… a subscription model:

Fast forward three years… Last week, Jason was on the red carpet for the American Music Awards, and guess what he brought up during an interview with E! News? And even though it's been three years, somehow the valuation is still stuck at $2 billion:

So let's talk about Rocket Carwash. Not to be haters or doubters. I enjoy Jason's music. But I do have some questions.

Mister Car Wash

To be clear, Rocket Carwash is a real business. It may even be a very good business. The subscription car wash model is attractive for obvious reasons: recurring revenue, predictable customer behavior, automated operations, and the possibility of very strong cash flow if the locations are busy and the real estate costs are under control.

Let me also say that the concept of a car wash company being worth $2 billion is not a fantasy at all. For the last five years, there was a publicly traded car wash company called Mister Car Wash, with the NASDAQ ticker symbol MCW. Mister Car Wash's market cap tended to float around $2 billion to 3 billion until it was taken private at a $3 billion valuation in a deal that was just completed last month.

Mister Car Wash has around 550 locations and generates over $1 billion per year in revenue. Again, that's:

• 500 locations
• $1 billion in revenue
• $3 billion valuation

How does that compare to Rocket Carwash?

(Photo by Christopher Polk/Dick Clark Productions via Getty Images)

Rocket Carwash

From what I was able to find, Rocket Carwash was founded in 2000 and is backed by a massive Omaha-based real estate and investment firm called City+Ventures. Jason is not the founder; he became an investor/partner around 2023. His investment stake is not known. A typical celebrity investment in a private company that's owned by a massive investment firm would not be very big. Certainly not greater than 5%. But, since he loves to talk about it, let's be generous and assume Jason owns 10-20%?

Rocket Carwash operates high-end express tunnel washes offering unlimited monthly subscriptions (ranging from about $24 to $50 a month). It's a great, high-margin business model, but Rocket Carwash certainly didn't invent the concept of a subscription car wash business.

Rocket Carwash is not a nationwide monolith like Mister Car Wash. As of recent industry tracking, they operate roughly 30 locations spread across 7 states (Nebraska, Pennsylvania, Texas, California, Iowa, Utah, and Florida).

Because Rocket Carwash is not publicly traded, we don't know its annual revenue, but we can make a pretty solid estimate.

A top-tier, highly successful express car wash might generate $1.5 million to $2.5 million in annual gross revenue per location. Even if we give Rocket Carwash the absolute benefit of the doubt and assume every single one of their ~30 locations is a massive, top-earning outlier bringing in $3 million a year, their absolute maximum gross revenue would be around $90 million annually.

When Mister Car Wash was bought out, they had roughly $1 billion in annual revenue. A $3 billion valuation on $1 billion in revenue is a 3x revenue multiple. Private equity buyers love this subscription-heavy model, so paying 3 times gross revenue is the current industry gold standard.

Even if we use our wildly optimistic assumption that all 30 Rocket locations bring in $3 million a year each ($90 million total annual revenue) and apply that top-tier 3x revenue multiple, the resulting valuation is $270 million. If we use the lower range, $1.5 million per location multiple, Rocket Carwash's valuation might be $135 million.

There's another valuation method.

When Mister Car Wash was taken private for $3 billion, they had around 550 locations. That means the private market valued a highly successful express car wash at roughly $5.5 million per location.

If we apply that exact same premium to Rocket Carwash's 30 locations, their baseline value is around $165 million. Let's assume Rocket's locations are significantly nicer, newer, and more profitable than the average Mister Car Wash, applying an aggressive premium of $10 million per location. That still only yields a maximum valuation of $300 million.

Bottom Line

Mister Car Wash:

• 500 locations
• $1 billion in revenue
• $3 billion valuation

Rocket Carwash:

• 30 locations
• $45 million – $90 million in revenue
• $135 million to $300 million valuation

What's Jason's Hypothetical Stake Worth?

If Jason owns 5% of Rocket Carwash, his stake is worth $6.75 million to $15 million. If he owns 10%, his stake is worth $13.5 million to $30 million. If he somehow owns 20%, his stake is worth $27 million to $60 million.

Even at our most conservative estimates, Jason's stake could be worth anywhere from $6 million to $30 million. That is an incredible, life-changing investment win that proves his business savvy. He doesn't need to inflate it to $2 billion for it to be a massive success.

Btw, we would LOVE to be proven wrong! Jason, get in touch with us. Share some financials. Tell us how much you own. This would truly be an amazing CelebrityNetWorth story!