We recently made a decision to invest in the Series A round of a new company called Kashless. This investment is one we’re very excited about, and reflects a lot of our investment philosophy here at RRE. The company is still essentially in stealth mode, although certain details leaked out via SEC filings we did around the financing. Rather than go into a lot of detail about what Martin Tobias, the CEO of Kashless, is planning on doing with the company, we’ll talk a little bit here about our process and thinking that led to this investment.
As we’ve mentioned in this space before, at a highly abstract level, we (and most investors) look for excellence in three key areas: people, markets and technology (the order depends on which of us you ask). In certain sectors, technology will be the key differentiator (materials science-based cleantech or semiconductors), in others it will be the vision and execution capabilities of the management team that will primarily distinguish the big successes. In all cases you need a market that’s capable of supporting interestingly large businesses.
Two major positives intersected to make us very excited about the opportunity here. The first was the opportunity to back Martin Tobias again. As the writers of this blog discussed offline the other day, Martin is a winner. We don’t just know him in a business relationship, we know him as a friend as well. Stuart stays with Martin when he travels to Seattle. They ride the 200 mile Seattle to Portland bike ride each year. Stuart and Martin have spend a great deal of time trying to figure out what business to start. Kashless is the culmination of this strategizing, much of it done during bike rides. Martin has demonstrated a great nose for the very beginning of trends, and that’s a terrific quality in an entrepreneur. He’s also extremely good at building organizations and getting them to scale. We know Martin’s strengths and weaknesses. We know that we can work with Martin and we know that there is mutual respect. We also know that he has lived through bubbles and busts before and we have a shared history on the appropriate ways to react to new market information.
The second is that (true to form for Martin), we think Kashless is poised to catch a big wave. Often times when we evaluate companies that seem good, but don’t quite feel right, one question we ask internally is, “what wave is this company riding?”, which helps focus the conversation around large, meta-trends that can propel a company and its target market into a high growth trajectory. Kashless is riding a big wave – call it “green”, “sustainability” or what you like, but economic, cultural and social forces are all moving us toward a world where issues of sustainability are more important than ever. Kashless looks to enable people to live more efficient, sustainable lives, and that’s an objective of which we are both supportive and optimistic. Also very important for RRE, as we mentioned in previous posts, Kashless can achieve these objectives in a capital efficient manner.
Stay tuned for more from Kashless, but we think big things are coming.