EcoATM Raises $14.4M for Mass Production of Electronics Recycling Kiosks
EcoATM, the San Diego startup developing automated kiosks for recycling cell phones and other devices, says it has raised a total of $14.4 million in preferred equity and venture debt financing, which the company plans to use to fund commercial manufacturing of its final kiosk design.
The Series A venture round was led by Bellevue, WA-based Coinstar (NASDAQ: CSTR) and Oakland, CA-based Claremont Creek Ventures, while Silicon Valley Bank provided an undisclosed “significant amount” of venture debt, the company said.
In a separate announcement today, EcoATM says it was awarded a Phase 1 Small Business Innovation Research grant of $180,000 from the National Science Foundation to fund additional development of advanced technologies used by the kiosk to identify and test the electronic devices that consumers are recycling. EcoATM says that includes advanced machine vision, artificial intelligence, and testing systems technologies.
EcoATM was founded in 2008 with the idea of building an electronics recycling business that encourages consumers to exchange their handheld mobile devices, video game cartridges, and tablet computers by providing them with a discount coupon, gift card, or receipt for a charitable donation to participating charitable groups. The company’s automated kiosks use technology that visually and electronically identifies an electronic device, determines its value, and offers a trade-in promotion or redemption.
The startup also says the U.S. Patent and Trademark Office has granted EcoATM its first patent.
“EcoATM’s systems must quickly learn and then accurately identify thousands of different models of phones and other devices and then precisely assess any cosmetic or internal damage in order for the system to work,” chairman and CEO Tom Tullie says in a statement released by the company. “This requires us to continually push the boundaries on a unique combination of artificial intelligence and non-traditional machine vision technology.”
Citing data provided by the Consumer Electronics Association, EcoATM says U.S. consumers buy about 500 million new electronic gadgets each year. As manufacturers tempt consumers to upgrade to newer models with improved features, the average household now owns 26 different consumer electronic devices. That’s a nationwide total of nearly 3 billion devices, many of which are no longer in use.
Tullie told me in December that cell phones and other handheld electronics usually contain toxic heavy metals such as cadmium and mercury, as well as brominated plastics. EcoATM offers consumers a convenient alternative to simply (and usually illegally) discarding their unwanted cell phones. The company says unwanted devices are properly recycled, and EcoATM salvages some precious metals from the devices that can’t be sold to refurbishers. “There’s about 65 cents worth of gold, platinum, and palladium in every phone,” Tullie said. “We get about $3.50 a pound.”
EcoATM’s kiosks currently cost about $20,000 apiece to build, “but they pay for themselves really quickly,” Tullie said.
The company has built more than a dozen prototype kiosks, which have been installed in shopping malls throughout San Diego, in the Nebraska Furniture Mart in Omaha, and in Kansas City, MO, and Seattle, according to Mark Bowles, an EcoATM co-founder and chief marketing officer. EcoATM says it already has collected tens of thousands of devices at its trial locations over the past year, and provided the equivalent of hundreds of thousands of dollars in return.