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After 40 investors rejected Jeff Bezos’ Amazon pitch, his parents offered $245,573 of their retirement savings

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An ‘ATM’ for your old phone

By
Dan Primack
Dan Primack
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By
Dan Primack
Dan Primack
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May 1, 2012, 11:30 AM ET
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FORTUNE — You know that old iPhone 2 that’s sitting in your desk drawer, or maybe an old Blackberry (gasp!) that got stored alongside your Guitar Hero peripherals? Well, EcoATM wants them, and is willing to pay.

The San Diego-based company operates a network of kiosks that allow users to trade in old mobile devices for cash, in-store credit or gift cards (depending on the specific kiosk). The devices then are either resold to the refurbishing market, or recycled in an environmentally-responsible manner.

Here’s how it works: A user walks up to one of the kiosks, and places their device inside. The kiosk then takes a photo of the device, and uses artificial intelligence software to identify the make, model and basic physical condition. It then gives the user a possible price range. If the user accepts, they then get their device back and plug it into a kiosk cable that determines internal conditions like charging ability and LCD activity. At that point, the software ascertains market value and presents the user with a final price.

If the user accepts, they receive compensation — usually in-store credit, or cash in mall locations — and EcoATM comes by the kiosk to pick up the device and send it on its way. Seventy-five percent of the devices continue life as a phone, while the remainder are sent to recycling facilities.

“I can do it in around 90 seconds,” says EcoATM CEO Tom Tullie, when asked how long the user experience takes. “But that’s because I know what each screen is going to ask me. It probably takes a new user a few minutes.”

In other words, it’s Coinstar for cell phones. And, not surprisingly, Coinstar Inc. (CSTR) is an investor.

The company participated in EcoATM’s $14.4 million Series A round early last year, and also in a new $17 million Series B round being announced this morning.

New investors on the round include PI Holdings, Moore Venture Partners, AKS Capital and Singapore billionaire Koh Boon Hwee. In addition to Coinstar, return backers include Claremont Creek Ventures and TAO Ventures. Proceeds will be used to build and distribute more kiosks, particularly in mall settings, and also to build out the company’s infrastructure (maintenance, etc.).

Tullie declined to discuss valuation.

To date, EcoATM has processed between 250,000 and 300,000 devices. The most popular have been Apple (AAPL) products, which command the highest recycling value. RIM (RIMM) devices come next, followed by Androids.

“I think people have a bit more propensity with Apple products to want the next greatest thing a little faster, but Android is beginning to come on strong,” Tullie says.

Sign up for Dan’s daily email newsletter on deals and deal-makers: GetTermSheet.com

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By Dan Primack
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