Startup ecoATM, which sells recycling kiosks for gadgets and phones, is being bought up by one of its investors: kiosk giant Outerwall, formerly named Coinstar, the companies announced on Tuesday. Outerwall, which already owned 23 percent of ecoATM, said it plans to pay $350 million in cash for the remaining amount of the San Diego-based company, including paying off its debts. Just a few months ago ecoATM had raised $41 million in debt financing from private equity firm Falcon Investment Advisors.
Outerwall's kiosk distribution channels in retail stores is likely a good home for the five-year-old company. Few startups that are looking to build sustainable-focused technology have found exits in recent years. Along with backing from Outerwall and Falcon, ecoATM counted as investors Oakland-based Claremont Creek Ventures, Tao Ventures and Singapore billionaire Koh Boon Hwee.
ecoATM's kiosks use sensors and video cameras to identify the device that the user is recycling, quantify its condition and worth, and offer the user compensation in cash or coupons. As of February of this year, the company had about 300 kiosks across 20 states, up from the 50 kiosks they had installed about a year ago. That's a slower ramp up than the company had been hoping for, but being part of Outerwall will help significantly with expansion.
ecoATM plans to install hundreds more kiosks in stores and malls this year, and also expand the types of devices it can recycle automatically. ecoATM's wireless-connected kiosks use software from startup Axeda to run diagnostics and to do remote management.
In recent months ecoATM has added a variety of techniques to fight theft like: requiring a driver's license to recycle goods, making sure the recycler is 18 or over, taking a thumbprint from the recycler, storing the devices for 14 days as a precaution, using remote cameras to take photos of and monitor the recycler, and maintaining serial numbers of the devices to check against reported stolen goods.
