PayRange, a startup that allows vending machines to receive smartphone payments, today confirmed a $2.75 million round and announced notable investors like former Google Payments head Osama Bedier and PayPal co-founder Max Levchin.
We noted the fresh funding last month, but now the Portland-based company has revealed its investors, which include people like Bedier, Levchin, former Visa president Hans Morris, Money 20/20 co-founders Jonathan Weiner and Anil Aggarwal, real estate mogul Barbara Corcoran, Jared Leto, and Phil Nadel.
PayRange, founded in 2013, has developed a small dongle that can be plugged into a vending machine, enabling users to purchase items with their smartphones. The product went from idea to market in just six months.
“Our vision is to eliminate the payment barrier in transactions. It is to make the payment disappear or become transparent from physical commerce,” CEO Paresh Patel. “We start with automated retailing because we believe mobile payment traction will happen first in markets where it displaces cash. This is because mobile payment in this space solves a real pain point as opposed to simply improving convenience.”
PayRange will begin shipping its product to customers later this summer. It joins a list of financial startups to come out of Portland, including Simple, Chirpify, and Giftango.
We caught up with Patel to learn more about the company for this installment of Startup Spotlight, a regular GeekWire feature presented by Comcast Business.
Explain what you do so our parents can understand it: “PayRange is the world’s simplest mobile payment solution for vending, parking, transit ticketing, laundry, amusement, and more.”
Inspiration hit us when: “I’m a veteran of the automated retail industry and I previously founded companies on both the customer side and the technology side.
One day my car needed air and I stopped at a gas station only to realize the machine only accepted four quarters … and I had three. I unsuccessfully searched the ashtray of the car, under the seats, asked around, and finally accepted that I wasn’t going to be able to get the air.
It was frustrating, and I realized the problem was not the price — the problem was I just wasn’t physically able to make the purchase due to payment. Payment was the barrier to the sale, not customer demand. PayRange is focused on eliminating payment as the barrier.”
VC, Angel or Bootstrap: “Bootstrap. Although we have raised outside funds, to us bootstrapping is a state of mind. It’s not about how much capital you have raised but rather how you spend that capital. Businesses have varying levels of capital needs and amount of capital needed in itself is not a good measure. Often times it seems that amount of capital raised becomes synonymous with initial success of a startup.
We are working to be very capital efficient, and we feel like bootstrapping is just a part of our culture. It’s not to say we won’t spend money when we need to. We will. But we try to do more with less whenever possible.”
Our ‘secret sauce’ is: My 22 years of experience in the industry. I’ve been in every position— from route driver to CEO — on the customer side and this has proven invaluable in creating and designing a product that meets the needs of the customers. Customers often times don’t know what they need, but they do know what works and what won’t work. Having that experience from the customer side helps us ensure we are designing in a way that will work for the operators and users alike.”
The smartest move we’ve made so far: “Aligning with investors who understand the space and know where they add value and where I have domain expertise.”
The biggest mistake we’ve made so far: “We were on a trip to New York visiting large prospective customers. We got lost getting to our last appointment of the trip (potentially hundreds of thousands in revenue). Using our iPhone navigation, we finally got to the location, and rushed inside. We met with the prospect and everything went well. He wanted to see our device in action so we grabbed a device and plugged it into machine in his lobby — it only took seconds and powered it up. So far, so good.
Then we grabbed the iPhone to show him how it worked … and the phone was dead! It was like egg on our face. We went to show him how it worked, and we couldn’t even have a phone that had enough battery! So we ran back to the car to get a charger. The problem was the phone was so dead, it was not even turning on with the chord. We learned a good lesson that visit.”
Would you rather have Gates, Jobs, Zuckerberg or Bezos in your corner: “All three are great in different ways. Picking one, it would be Jobs because we like how he challenged the status quo — how he challenged the thinking and could get his team to develop products that have changed the world, in a counterintuitively, simple way. We would love to be challenged by someone like Jobs!”
Our world domination strategy starts when: “Users require machines to accept PayRange or they won’t know how to use the machine. We want PayRange to be as integral to a machine as a remote control is to the TV. If you can’t find the remote control, most people can’t figure out how to use the TV. Likewise, we want people to think of PayRange whenever they approach any self-service machine.”
Rivals should fear us because: “Of all the things we are not doing right now. The machine space is a green field with great opportunity and yet we’re keenly focused on solving the payment problem. We are not distracted and this should cause our rivals to be concerned.”
We are truly unique because: “Our culture is about raw passion, eternal optimism, and a relentless drive to change the world in spite of any obstacle or hurdle before it. We are a group of inquisitive minds. We live and breathe innovation. Our culture revolves around being creative and conscientious. Ambitious and loyal. We are visionaries, believers, and problem solvers. We are entrepreneurial.”
The biggest hurdle we’ve overcome is: “Our technology and simplifying the installation of the device in machines. Our device can be installed in seconds on millions of machines without tools, and no configuration is required on the machine.”
What’s the one piece of advice you’d give to other entrepreneurs just starting out: “Believe in yourself because if you don’t, why should others? Believe in solving a problem where you have something unique to offer — whether that is expertise or perspective to solve a problem that others cannot easily replicate. And then don’t be afraid of charging forward and navigate the obstacles that will inevitably be before you, knowing full well where you are heading even if others don’t see it yet.”