The series A funding will allow him to build out the Portland, Oregon-based company, and bring his business--which allows consumers to purchase products like juice, candy, or chips from vending machines using a mobile app and Bluetooth technology--to market. Although Patel had offers from at least half-a-dozen traditional Silicon Valley and international venture capital firms over the last few months, he decided to go with a somewhat new one--called Nyca Partners.
The venture capital firm hopes to marry Wall Street financial finesse and connections with Silicon Valley technological expertise, and a heavy dose of advisory know-how.
"They have people who are experts in payments and the finance space," Patel says. "It was important for me to deal with people who understand this space, who have good strategic insight, as well as connections and contacts."
Nyca, founded in 2014 by ex-Visa president and former Citigroup investment banker Hans Morris, has a Who's Who list of partners with feet in the Street and Silicon Valley's gilded tech world. The gold-plated list of names involved with the firm include Max Levchin, co-founder of Paypal, and Osama Bedier, former head of Google Payments, who will take a seat on PayRange's board.
"There is more innovation in financial services now than ever…but none of the venture capitalists are experts in the financial system," Morris told the Financial Times on Monday. "We bring together expertise on the financial system with lots of Silicon Valley connections."
Nyca has a goal of investing $25 million a year in firms innovating in financial technology and payments. Neither Levchin nor Bedier will have a full-time role in the company, but both will use it as a financial technology investment vehicle, says David Sica, a vice president of the firm.
Additionally, companies will have access to a dedicated bank of advisors such as CamberView and Level Money chairman Frank Yeary; Stephanie DiMarco, chief executive and founder of Advent Software, and Stanford University economist Susan Athey.
Rounds will typically be add-ons to larger investments led by more ensconced players, such as Kleiner Perkins, which brought Nyca in on a $40 million deal with crowdfunding platform Indiegogo in January, Sica says.
"Nyca was brought in for special issues, and our advisory work, which was complementary to their investment," Sica says.
In PayRange's case, Nyca was the lead investor, joined by other business heavies such as Anil Aggarwal, Barbara Corcoran, Google Ventures, and movie star investor Jared Leto.
The gap between New York and Silicon Valley venture capital has long been a glaring point of soreness for the Big Apple, whose Wall Street billions don't connect as efficiently with startups as some would like. Despite rosy reports from New York State Comptroller Thomas Di Napoli--in 2013, the city hosted 7,000 high tech companies and 100,000 high-tech jobs, nearly rivaling numbers reached at the height of the last tech boom in 2000--Silicon Valley is far and away the investment capital for tech and tech startups.
In the first half of 2014, venture capital firms invested $2.1 billion in 230 deals in New York, compared to $12 billion in 700 deals in Silicon Valley, according to the most recent Money Tree report produced by PricewaterhouseCoopers and the National Venture Capital Association.
To date, Nyca Partners' other investments include peer-to-peer lender Lending Club, and Levchin's latest startup Affirm, which extends credit to consumers at the point of sale.
As for Payrange, Patel predicts that the strategic funding offered by Nyca will be a jumping off point to subsequent, larger rounds of funding from more established players.
"Traditional VCs have expertise in company building and how to grow and scale," Patel says. "For our series B, we may go with one that can help on company building."