US vending industry professionals invest into Estonian startup CAV Solution

A graduate of the Tehnopol Startup IncubatorCAV Solution raised funding in the pre-seed investment round and is already rapidly expanding its business into the US market. CAV Solution is one of the first startups to have gone through the Russian-language program of the Tehnopol Startup Incubator.

CAV Solution finished its pre-seed round by raising 330,000 euros from investors, or 13.2% of the equity of the company. The startup is using the investment to raise brand awareness, improve marketing, and increase sales.

Investments were made by angel investors from Members of Pipedrive Angels and Garage Entertainment OÜ, and by its partners at the US firm Optimal Station, which specializes in customizing vending machines for use in automated retail, inventory control, and event marketing.

CAV Solution spokesman, Dmitri Pimenov said that the company selected key conferences and exhibitions in which to participate in an effort to find the ideal clients and investment partners. CAV Solutions held talks with various investors, giving CAV the opportunity to choose the right partners for intensive but strategic business development.

“In December 2021 we went to the Self Service Innovation Summit 2021 in Florida, where we met the founders of Optimal Station, who were very interested in our equipment and said it was the solution that they have been looking for for 12 years now. After the conference, we received several orders for devices to test and sent one of them to Optimal Station. They tested our equipment in every possible way and confirmed that the technology works and that our identity and age verification system is needed in the US market”, said CCO, Juri Tarassenkov.

CAV Solutions also visited the Fort Lauderdale “Alternative Products Expo,” where they realized that the demand for data identification is indeed large, but many potential purchasers wanted to have a turnkey solution, with a system that is already integrated into vending machines. “We understood that we would need partners that would be able to produce the solutions in the USA, while we ourselves work on improving the software,” said Pimenov.

After visiting the expo in Fort Lauderdale and receiving feedback from potential clients, CAV Solution visited the Optimal Station headquarters, where they presented their hardware and software in more detail. CAV was impressed with the wealth of knowledge and experience possessed by Optimal Station as well as the breadth of their connections. Together, CAV Solution and Optimal Station immediately embarked on creating an all-encompassing solution which they then presented at the NAMA expo in Chicago. “Integrating our age control identifier into the Optimal Station vending machines let us demonstrate how the whole age-control-integrated purchase process works. Our stand was resoundingly popular at the expo. Our booth was crowded with interested individuals, including several press representatives interviewing us, and brand new clients purchasing devices on the spot. The expo was extremely effective and very successful for us,” declared Pimenov.

Having full confidence in the technology and having seen the demand at the expo, Optimal Station promptly ordered 50 devices from CAV Solution. Furthermore, Optimal Station demonstrated its belief in CAV’s potential by offering to close the entire pre-seed round with a 10% purchase. Unfortunately, by that time CAV Solution only had 8.2% available. After some careful thought and consideration, CAV Solution made the decision to offer 1.8% of the company’s own share in order to offer Optimal Station their desired 10% share, due to the mutual admiration and respect for Optimal Station and comprehending the value they added to the equation.

Current plans

“Currently we are actively filling our warehouse, preparing components for assembly, perfecting processes, and hiring new, qualified people,” states CAV Solution CEO, Mihhail Taresenkov. “Actually we are now in an ideal place, as we now have the integral part that we were previously missing for entering the US market.”

CAV Solution is one of the first startups to have participated in the Tehnopol Startup Incubator program in Narva. CAV Solution specializes in first-of-its-kind age verification services, based on both reading a person’s face as well as a document confirming their identity. The startup has developed an add-on module for age verification that is designed for various vending machines around the world. The module helps make vending machines more competitive against traditional retailers that use on-site staff to verify the age of consumers. The module is not only for use with vending machines, but can also be used for on-the-spot KYC (know your client) identification. At the moment the startup is preparing for the seed round.

The Tehnopol Startup Incubator creates a reliable and active growth environment for start-up enterprises. The growth program offers participating companies intensive and practical training as well as expert support from the best mentors in Estonia and Europe. Startups are helped to find initial investments, in addition to helping to enter export markets. The total cost of the program is 10,000 euros per startup.

The start-up incubator is part of the largest science business town Tehnopol in the Baltics with comprehensive support. The purpose of the Tehnopol Science and Business Park Tehnopol is to promote the creation of world-class technological enterprises and their growth in Estonia.