I am thrilled to announce today that Coinstar, now called Outerwall (NASDAQ:OUTR), the publicly held purveyor of 64,000 coin-counting and Redbox movie and video game rental kiosks, has acquired Claremont Creek portfolio company ecoATM for $350 million in cash. What a promising acquisition it is!
ecoATM makes automated, self-serve kiosks that quickly evaluate and buy back consumer electronics directly from consumers. As people continue to buy unprecedented numbers of new smart phones, tablets and MP3 players, they will increasingly gravitate to the convenience of selling their used gear to a growing network of highly sophisticated kiosks designed to complete the cash transactions within minutes.
It is no coincidence that Coinstar was a corporate venture capital investor in ecoATM's two fund-raising rounds, as was Claremont Creek (a $14.4 million A round in February 2011 and $17 million B found in May 2012.). So Coinstar had a first-hand, in-depth look at the promise and growth of ecoATM.ecoATM recently announced the aggregate purchase and recycling of 1 million smart phones and the like, about double the number a year ago. The company, however, is still very much in a nascent stage. EcoATM is installing two new kiosks a day. By the end of 2013, it will have 900 kiosks in 24 states. It has been making plans for international expansion and to improve its technology, so that in the future ecoATMs, might be able to accept bigger items, such as personal computers.
Coinstar's investment in ecoATM was also increasingly typical of heightened corporate venture capital participation in clean technology. In 2012, more than 20 percent of energy venture investments involved a corporate partner, compared to 15 percent across all venture investments, according to the National Venture Capital Association.
And at Claremont Creek, eight of our past 10 energy tech investments have included a corporate partner in the financing syndicate. (Late last week, Duke Energy invested in Claremont Creek-backed Clean Power Finance.)
Corporations embrace startup investments because they offer a chance to be a major player in new or expanded markets, while startups often welcome corporation investments as a validation of their technology and for access to enhanced marketing and channel relationships.
The ecoATM kiosk system is already inspiring mass participation in electronics and resale because it provides convenience and immediate cash incentive for consumers. With its growing network, ecoATM has already begun to forever alter the extremely wasteful life-cycle of consumer electronics in the United States, and this will only accelerate under the direction of Coinstar.
For further analysis see my post today on PEHUB: