In 2018 when Paresh Patel went out to raise money for his mobile payments startup PayRange he was unsuccessful.
The company was seeing solid growth and he thought more capital was the key to accelerate that. When it became clear investors weren’t interested, the veteran entrepreneur pivoted to Plan B: profitability.
“We aren’t sacrificing growth but we’ll do it in a capital-efficient manner,” he said. “The last two to three years have been nice in that we weren’t dependent on investor capital to grow.”
Last year, the company was named growth company of the year by the Technology Association of Oregon, and this year Patel was named an EY Entrepreneur of the Year for the Mountain West region.
The company’s core business has remained the same since it launched in 2014. It makes hardware and software that allows existing vending machines to accept mobile payments. Retrofitting existing machines makes it easier for vending machine operators — whether it’s laundry, entertainment or food and beverage machines — to convert from a cash-based system.
Consumers use the PayRange app to make payments.
The company doesn’t release revenue but in the last three years its grown about 800%, Patel said.
Over the last two years the company has seen its laundry business jump as the Covid-19 pandemic made people wary of handling coins and the U.S. saw a coin shortage as people stopped using cash and minting operations were disrupted.
There are more than 500,000 laundry machines on the platform. Overall, there have been 1 billion transactions and 3 million users. The company has 24 employees. The company has raised a total of $27 million from investors to date.
“We are in a good spot. One trend in the last couple months is investors care about profitable growth and are looking for companies that are cash flow positive,” Patel said. “We have been profitable for a few years now.”
Patel isn’t out raising a round now that his style of doing business is in vogue. But, if he were approached he wouldn’t rule it out for the right opportunity, especially if he could do some M&A. He added that the company’s investors have been onboard with his profitable growth plan.
Patel intends to continue to grow out the core business and add more machines. The company has a stated goal to get 1 million laundry machines on its platform. However, the company is also exploring new areas.
One potential area of new business is what Patel calls the growing age-restricted market. He sees vending, and platforms like PayRange, as a solution for brands and retailers to ensure age restricted products are kept out of the hands of underage consumers.
For example, vape manufacturers and brands have had problems with high school-age teenagers getting product. Patel sees this potentially getting worse as consumer brands like beverage makers dive into alcoholic products like hard seltzer or hard sodas.
Patel sees vending machines and associated apps for payment as a more secure way to ensure IDs and ages are verified and checked instead of relying on store clerks.
“We think this is a growing market. If vapes were bad (for underage use), this will be bigger,” he said. “There is an opportunity for tech to alleviate the problem.”
He noted that he recently spoke on this issues at a conference of state attorneys general.
