A VC in Vacationland

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According to Xconomy, San Diego’s EcoATM, which operates automated kiosks that
enable consumers to recycle their mobile devices, says it has raised $40 million in debt
financing from Boston’s Falcon Investment Advisors to expand beyond
its existing network of 300 kiosks in 20 states.

In the statement, EcoATM chairman
and CEO Tom Tullie says, “There’s still a large percentage of the country that
doesn’t have access to a convenient recycling solution for their mobile phones
and other personal portable electronic devices. We raised this money to help us
deploy ecoATMs nationwide and help people recycle their old phones, tablets, or
MP3 players, regardless of where they live.”

EcoATM plans to install an
additional 600 to 700 kiosks by the end of the year. (Information about the locations of EcoATM kiosks is here.)

EcoATM kiosk

The technology needed to
recycle mobile devices is more complicated than you might expect. Each kiosk
uses machine vision and artificial intelligence to scan, identify, and evaluate
each device being recycled. Once identified, the kiosk checks spot prices to
determine how much cash or store credit to offer for each trade-in. EcoATM
takes a cut from each deal.

EcoATM says it resells about 60
percent of its collected devices and responsibly recycles the rest.

In a note last week, an EcoATM
spokeswoman told me the startup had added technology that enabled its kiosks to
accept tablets for recycling.

The company has deployed most
of its kiosks in large shopping malls located in big cities. The new financing
is intended to get ecoATMs into smaller cities and other areas where foot
traffic is high.

EcoATM has raised more than $31
million in venture capital funding since 2008, when three out-of-work techies identified a potential business
in recycling cell phones. EcoATM tested the idea with a prototype in
an Omaha, NE, shopping mall in late 2009. Since then, the company says it has
paid out millions of dollars to hundreds of thousands of customers, and has
diverted hundreds of thousands of devices with toxic components from American
landfills.

The company’s venture investors
include San Diego’s Tao Ventures and Moore Venture Partners, along with
Coinstar, Claremont Creek Ventures, PI Holdings, AKS Capital, and Koh Boon
Hwee.