Minute Key lands $10 million for growth

BOULDER – Minute Key Inc., a Boulder-based company, on Wednesday filed papers with the Securities and Exchange Commission disclosing it recently raised $10 million in venture capital. Minute Key has raised about $25.8 million since it was founded in 2008, according to SEC filings.

Minute Key makes self-service, automated key-cutting machines that can quickly duplicate home or office keys. Locally, Minute Key has machines at several Lowe’s and Walmarts in the Denver area, and the company plans to use the investment to expand to more stores with more retailers, said Randy Fagundo, Minute Key’s chief executive.

“We plan on continuing to grow the business. We’ve grown significantly over the last 12 months and will continue to buy kiosks and expand our footprint,” he said.

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Minute Key employs about 100 people nationwide, with about 15 working out of the company’s office in Boulder.

The company has a major deal with Lowe’s and has pilot programs with other major national retailers, Fagundo said. Minute Key has about 1,200 kiosks in the U.S and Canada. The closest machine to Boulder is at Lowe’s in Louisville.

The investment comes from Matrix Partners and Serent Capital, which participated in a $10.6 million round in 2011, Fagundo said.

Fagundo declined to disclose how much revenue Minute Key is making.

Minute Key is looking to expand its number of machines, which are made in North Carolina, but it also wants to change the industry in an aesthetic sense by offering a variety of multiple designs like NFL logos, flags or  graphic designs.

“There’s a real opportunity to grow the key business by creating more interesting-looking keys that are personalized,” Fagundo said.

The designs will let users add some customization to their keys, and Fagundo compares them to mobile phone cases. But the best thing about the graphics might be helping owners tell keys apart, he said.

A factor in Minute Key’s success is that key-making is a headache for retailers, Fagundo said.

“Key-cutting for a lot of retailers is a real pain point. There are a lot of miscut keys, so there are a lot of returns, and that causes customer dissatisfaction,” Fagundo said.

Key-cutting does not make sense from a financial standpoint for retailers, who would much rather have that employee selling expensive tools and hardware than operating the cutting machine, he said.

Minute Key addresses the pain point by operating and servicing the machines. It also owns them, so it costs retailers nothing to have a kiosk.