January 15, 2014

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New Vending Machine Technology Created in Provo

By Rachel Madison

January 15, 2014

A new kind of vending machine technology aims to help customers make easier, healthier choices and vending machine owners more knowledgeable about their equipment.

The new technology and company, called AirVend, is an android-based point-of-sale device with a software as a service (SaaS) back end, said Lance Ellsworth, co-founder and executive vice president of business development for AirVend.

“It’s a point-of-sale device that mounts on a vending machine,” he said. “It’s basically a computer that goes into vending machines and provides three core things.”

Those three core things include displaying the nutritional information of each product inside the machine to comply with federal law and inform consumers, giving people the ability to pay with their phone or credit card, and providing vending machine owners with information about real-time sales and inventory data through the device’s interactive touchscreen.

“That way the operator knows if their product has been depleted and what needs to be restocked,” he said. “It’s those three key things, but we also plan to sell ads so companies can do advertising from it.”

The idea for the company started when AirVend CEO Chad Francis, who also owns Provo-based custom development company IO Development, was doing some work for a client in the vending industry through IO Development. The company asked Francis and his team if they’d build a point-of-sale system for their vending machines, and the idea behind AirVend was born.

“We evaluated the market to see if we should go into the industry and deliver this solution,” Ellsworth said. “We had to ask, ‘Can we compete against other companies?’ The answer came back as yes with a huge opportunity, so in April 2012, we started the company and in November 2012 we were shipping product.”

Ellsworth said so far the company has only shipped about 1,000 units across the United States, but interest continues to build. Last month, AirVend received $1.2 million in funding to fuel its production. The funding was led by 365 Retail Markets, a vending industry partner, and PS27 Ventures, an investment firm focused on healthy living and wellness initiatives.

While the software has been “good to go” for a while, Ellsworth said, the next step for AirVend is to revamp the hardware that is actually mounted to the vending machines.

“We’ve used [our initial sales] as a pilot to work out the kinks,” he said. “The hardware was kind of a beta. It’s a consumer-grade platform that we used for proof of concept, but now that we have the funding, we’ll go from that beta hardware to commercial or-industrial grade hardware. Right now only a 7-inch screen is available, and with industrial grade, we will have 5-inch and 7-inch screens.”

In addition to upgrading the hardware, Ellsworth said the company also plans to use the funds to support near field communication (NFC) and mobile wallets, increase the company’s number of employees, and expand into international markets.

“In all aspects there are going to be enhancements,” Ellsworth said. “We are going to expand our software, team, sales and do what we can to help operators know if their product if deficient—if they are missing Cokes or Snickers bars—and do real-time updates.”

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