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    Young college investors back vending machine

    Dorm Room Fund taps MIT startup

    The Refresh vending machine is designed to reduce energy use and costs by storing bottles that are filled on the spot.
    Refresh Water Technologies
    The Refresh vending machine is designed to reduce energy use and costs by storing bottles that are filled on the spot.

    If you gave a bunch of college kids half a million bucks to invest in companies run by other college kids, where would they start? Investing in vending machines, of course.

    Boston’s Dorm Room Fund, which 11 local college students manage for Philadelphia-based First Round Capital, has made its first-ever investment: $20,000 in Refresh Water Technologies, a startup formed by Massachusetts Institute of Technology to make environmentally friendly vending machines.

    Instead of holding prefilled soda and water bottles, a Refresh machine stores empty, collapsed bottles that can be expanded and filled, via a tap line that pours either filtered water or mixes soda drinks on the spot, much like a restaurant soda fountain.


    Moreover, customers will be able to use their own refillable bottles at the machine, getting a discount on the beverage price and further reducing the number of bottles that will be dispensed.

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    The idea is that a Refresh vending machine will need to be refilled far less often than a regular one — it holds 1,000 collapsed bottles, compared to the standard 200 — reducing the fuel burned by delivery trucks. It also consumes less energy than other vending machines because there is no need to refrigerate rows and rows of full bottles. The student entrepreneurs say the carbon footprint of their vending machine will be 80 percent smaller than the typical dispenser.

    “Down the line, we envision an app that lets you track your bottle savings, so you can see the impact you’re having,” said Refresh chief executive Eliza Becton.

    Environmentally friendly reductions also promise cost savings, which is why Becton and Refresh cofounders Sean Grundy and Frank Lee believe their invention will catch on after a pilot test of five water-only vending machines in Boston next year.

    Refresh got on the Dorm Room Fund’s radar because one of its fund managers, Akanksha Midha, an MIT student pursuing an MBA, considered the company to be among the most promising on campus and recommended it to the rest of the management team.


    Such scouting by fellow college students is exactly what First Round Capital envisioned when it launched the Dorm Room program in Philadelphia last fall. Since then, it has expanded to San Francisco, New York, and, most recently, Boston.

    “If you have a VC [venture capitalist] parachute onto a campus and ask them to identify the top students, that’s a difficult thing to do,” said Dorm Room Fund director CeCe Cheng. “Students know which of their classmates are serious. The advantage they have over a VC is they’ve been living and playing and eating and drinking with these people for years.”

    Callum Borchers can be reached at Follow him on Twitter @callumborchers.