Boston's Dorm Room Fund is now helping collapse the bottled water industry.
First Round Capital's local student-run investment team announced Tuesday its first portfolio company: Refresh, an environmentally friendly vending machine designed by a team from MIT Sloan and the Rhode Island School of Design.
"Dorm Room Fund is excited by the prospect of our $20,000 investment contributing to an 80 percent lower carbon footprint for the bottled water industry," wrote student investor Akanksha Midha in a blog post announcing the news.
Rather than stocking pre-filled bottles, Refresh's patent-pending system stores 1,000 empty, collapsed bottles that can be expanded and filled with filtered, flavored and/or carbonated water at the point of sale. As an added eco-friendly bonus, customers can receive a discounted beverage if they use their own refillable bottle at the machine, thereby reducing the number of bottles being dispensed.
Refresh works similarly to a restaurant soda fountain, and is said to cut costs for companies in the $19 billion beverage industry by over 20 percent.
"Although these kinds of capex-heavy companies are often risky investments with traditionally lower return profiles," Midha acknowledged, "in the case of Refresh, the significant cost savings they offer poise them for big financial wins."
The technology was born out of Eliza Becton's thesis at RISD, "where she was compelled to out-design bottled water." Through her graduate school network, Becton met MIT Sloan graduates Frank Lee and Sean Grundy, whose skillsets span the manufacturing industry.
The trio has been working out of Somerville-based incubator Greentown Labs and recently won the Cleantech Open Northeast. Although Betcon previously noted, "We've had a lot of funding outreach, but we're holding off," the Dorm Room Fund's network wasn't one they could pass up.
“We feel very fortunate and excited to be a part of the Dorm Room Fund community," Betcon said in a statement. "Since college campuses are an early target market for us, it’s meaningful to get validation by the student team at Dorm Room Fund."
Betcon added that the newfound funding will be used to accelerate product development for Refresh's pilot launch. Five water-only vending machines are expected to launch in Boston next year, according to the Boston Globe, and an app that lets users track their bottle savings could also be in the works.
"We understand that Refresh has a long and difficult journey ahead – disrupting an old-school industry with a physical product is no easy task," Midha concluded. "But they have the confidence and resources of Dorm Room Fund to make it happen."
