EcoATM's Entrepreneurial Recycling: CSTR's "Next Big Idea" Secures Series B
Recycling has a capitalist slant as kiosk "e-cycling" company ecoATM secured its Series B funding round at approximately $17 million and a Phase II grant from the National Science Foundation ("NSF") for up to $1 million last week.
Previous investors Coinstar (NASDAQ: CSTR), TAO Ventures, and Claremont Creek increased their investments and new investors PI Holdings, AKS Capital, Moore Venture Partners, and Singapore billionaire Koh Boon Hwee joined the round.
Based in California, ecoATM provides self-service, automated stations that analyze the value of a consumer's cell phone or electronic device - offering the consumer a market value price based on current secondary market data. If accepted, the consumer walks away with cold, hard cash.
The new round of financing is two-fold, Tullie explained to Benzinga - allowing for the capital to manufacture, as well as the capability to build and roll out the infrastructure to install, maintain, and support ecoATM kiosks in the field.
"As we work through the first couple hundred, we'll figure out scaling and how fast we can crank up [implementation]," he said.
Founded in 2008, ecoATM received initial Coinstar attention after winning the company's "Next Big Idea" contest in 2009 and currently has about 50 kiosks in operation - primarily in mall, retail, and foot traffic-heavy locations throughout California.
"Where we go from here is all about going from what is a technology company to what is a very real business," Tullie said. "[We] scale revenues, a nationwide footprint. I'm excited about that challenge. We prove to people we can build this machine, to now being a company that extracts revenues and profits."
Potential revenue and profitability is a very real outcome with an estimated $5 billion global market, noted Randy Hawks, managing director of venture firm and current ecoATM investor Claremont Creek.
"The average household has 4.5 phones sitting in a drawer. This is a way to get them back into recycled value instead of a landfill," Hawks said. "This past year has been about proving that the automated model works, that the economics work; it costs this much to build, here's how many phones it can process. . . They spent the last year getting that under control and they're hitting the ball out of the park."
With a near-constant stream of new technologies, as well as April's Consumer Electronics Association report of smartphones expected to be the top consumer purchase in the year, the outlook for EcoATM's e-cycling model appears very scalable.
"It's not the environmentalist - it's the capitalist," Tullie said. "[You have to] find a good way to get it done and give value [to the market and the consumer] and suddenly, you can do some great things."
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