Kashless No More: Martin Tobias Raises $5M for New Startup
[Updated Oct. 30 with comments from Tobias, who's surfing in Hawaii (see below)] Although he has been stingy with details about his new startup, Kashless, I figured Seattle entrepreneur Martin Tobias had to have raised some money (he’s been hiring). Yesterday, Dan Primack of PEHub reported that Kashless recently closed a $5 million Series A round led by New York and Silicon Valley-based RRE Ventures. As John Cook of TechFlash points out, RRE was an investor in Loudeye Technologies, Tobias’s multimedia company that had a successful IPO in 2000 (raising about $70 million).
Tobias, who stepped down as CEO of Seattle-based Imperium Renewables in a high-profile split last December, is apparently continuing the cleantech theme with Kashless, whose tag line is “Reuse, recycle, free sharing.” In a blog post last week, Tobias said the idea for Kashless was born in early 2008 when he was cleaning out his garage and came across sports equipment and other stuff that could potentially be useful to others. Kashless seems to be trying to solve the problem of “more consumption where it was not necessary,” as Tobias puts it. He recounts having all kinds of difficulties giving stuff away for free, or finding a used whiteboard, over the Internet.
A former Microsoft developer and venture capitalist, Tobias looks to be focusing on the intersection of cleantech and computing—something we’ll probably see a lot more of around here, what with the rise of smart-grid technologies, recycling and waste-management opportunities, and social networks.
I spoke with Tobias by phone this afternoon. He wanted to emphasize that it was RRE’s strategic thinking, rather than personal connections, that led to the funding. “RRE has been making a good name for themselves in software meets cleantech,” he said, referring to RecycleBank and other companies in RRE’s portfolio. “They’ve thought extensively about how a VC can get leverage in cleantech without committing to huge [capital raises].”
As for Kashless, he said, “This is a low-cost company to start, with the economics of software, but playing on issues that we all know are out there, like oil prices and resource constraints. A $5 million first round is a large raise for today, for the stage the company’s at. That’ll be necessary for the company to make it through what I think will be a nuclear winter the next two years…The credit crisis is affecting every business. It’ll be very, very difficult for startups to raise capital. We’re quite happy to have a pretty significant raise with a great funding partner.”