Vending machines may get a makeover now that Byte Foods, a startup that makes so-called smart vending machines, raised $5.5 million in seed funding,
According to a report in TechCrunch, the San Rafael, CA-based startup will use the proceeds of the funding to build awareness for its vending machines that are stocked with healthy food and drinks from vendors that are local. The machines are Internet connected, enabling the startup to take advantage of the growing Internet of Things,or IoT, market. Berg Insight, the market research firm, forecasts that by 2020 there will be 3.6 million or more Internet-connected vending machines in the marketplace.
The vending machines have a menu display that lets users access product information, a card reader for payment and the ability for people to take items out of the vending machine to look at without the chance they will be charged if they decide to put the item back. That is made possible by RFID tags on each item that alert the machine if the customer walked off with it. The startup has also created software to forecast demand for the food items at each location that a machine is installed.
The seed round of funding was led by Spring Creek Investment Management and included participation by Bolt and Bessemer Venture Partners. Spring Creek’s Jin Park, who joined the board at Byte, told TechCrunch the company will likely invest its seed funding in its growth. “Byte is fine tuning their food offering and variety, which is important in attracting repeat customers. There are many opportunities here to partner with various local food providers. The customer-facing side of their technology works well already. One key revenue driver will be expanding the number of refrigerators… and driving down the delivery costs by having route density,” said Park.