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January 29, 2008

Our Second Rotation Investment

Do you have a drawer or closet full of old cell phones, iPods, and digital cameras?

You know that you’re not supposed to throw them away because it’s not good for the environment. Plus, they still work. You could sell them on eBay or Craigslist, but that’s such a pain. And who knows how much you could get for them?

I am happy to share that we at Venrock have made an investment in a startup which directly addresses this problem. Second Rotation is an online service which allows consumers to easily sell all of their electronic gadgets. You go to the site, enter or find the name of their product, and rate its condition. Then you’ll immediately find out how much the item is worth and receive a free shipping label to mail it into the company without charge. Once the company receives the item, it’s only a short amount of time before they send out a check or credit your Paypal account. It’s that simple - using Second Rotation an easy way to take both the uncertainty and hassle out of trading in old used electronic goods.

From an investment perspective, Second Rotation stands at the intersection of many trends. As I noted in my post last fall about “Seven Coming Digital Uber-trends which Are Ripe for Startup Opportunities,” consumers have an progressively heightened awareness around living green, and the web provides a natural vehicle for connecting people to resources and services which lessen impact of individuals on environment. e-Waste in particular is becoming an increasingly more important issue – for example, electronic waste is estimated to already constitute between 2% to 5% of US municipal solid waste and is rising three times faster than other streams. Currently the average citizen is responsible for 35lbs. of waste from appliances, IT equipment, and electronic goods per year. Meanwhile, the number of gadgets each consumer owns continues to grow and proliferate, while the upgrade cycle to new goods shortens as fuller-featured next-generation devices are released more frequently.

Since launching the site last July, the response to Second Rotation from consumers has been tremendous. Many are excited about the prospect of a simple way to generate cash for stuff they’re not using any longer; others are enthusiastic about the opportunity to facilitate ecologically-minded reuse of what would otherwise become e-waste. It’s been gratifying for me to visit the Second Rotation facilities and see the multitude of products en route to new owners. And others are starting to recognize the value of the service, like CNET, MSN, and Ars Technica.

With any new venture investment, the caliber of the team is paramount, and Second Rotation is no exception. The CEO Rousseau Aurelien is a serial entrepreneur and former eBay PowerSeller. Before joining as President & COO, Israel Ganot spent six years at eBay, where he was instrumental in the company’s international expansion. And the CTO James McElhiney is also a seasoned entrepreneur (cofounder of Boston Compliance Systems, which he later sold to Thomson Financial), bringing over 20 years of large-scale development expertise to the company. In conjunction with this funding event, the board is expanding to include myself and Mike Tyrrell from Venrock, Austin Ligon (co-founder and former CEO of CarMax), Henry Vogel (Chief Revenue Officer at Quigo and a former eBay executive), and Ashton Peery (former CEO of Top Ten Media), along with both Rousseau Aurelien and Israel Ganot.

Today’s announcement of a $4.4M Series A funding from Venrock and other prominent angel investors is a milestone for the company and a significant step towards the expansion of its service. In the future, Second Rotation will be accepting other categories of electronic goods, offering additional services that complement the core business, and announcing some unique partnerships. I am excited about organization we’re building together with this investment and hope that you will try out the service firsthand for yourself.

Posted by David Beisel on January 29, 2008 8:35 AM | Permalink

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Comments (2)

Timothy Post [TypeKey Profile Page]:

David:

Check-out the book:

"FutureShop: How the New Auction Culture Will Revolutionize the Way We Buy, Sell, and Get theThings We Really Want"

by Daniel Nissanoff

I think you'll find it pertinent Second Rotation and perhaps will give them a couple new ideas.

Posted by Timothy Post [TypeKey Profile Page] | January 29, 2008 9:14 AM

Posted on January 29, 2008 09:14

CapitalChaos [TypeKey Profile Page]:

David,

Great posting and hadn't seen the news on the investment or we would've loved to cover it.

Great concept and seems like a great niche market that will only grow as consumer consumption does. With products having such short lifecycles, the secondary market will be significant - especially overseas. Look at Cuba and all the old American culture that still lives on.

Posted by CapitalChaos [TypeKey Profile Page] | February 13, 2008 3:55 PM

Posted on February 13, 2008 15:55

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