Zenbox Becomes World’s Largest Bitcoin Kiosk Network in Just a Few Months - Interview with CEO, Cailen Sullivan

This week, we had the opportunity to talk with Cailen Sullivan, CEO and co-founder of ZenBox, the largest BTM (Bitcoin automatic teller machine) operator and distributor in the world. We asked Cailen how his company managed to leapfrog the competition in a span of just a few months, his partnership with BitAccess, plans for the future, and on the state of the growing BTM industry as a whole.

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Zenbox Becomes World’s Largest Bitcoin Kiosk Network in Just a Few Months - Interview with CEO, Cailen Sullivan

This week, we had the opportunity to talk with Cailen Sullivan, CEO and co-founder of ZenBox, the largest BTM (Bitcoin automatic teller machine) operator and distributor in the world. We asked Cailen how his company managed to leapfrog the competition in a span of just a few months, his partnership with BitAccess, plans for the future, and on the state of the growing BTM industry as a whole. 

Cailen Sullivan, CEO ZenBox

-Cailen Sullivan, CEO and co-founder, ZenBox

CoinTelegraph: Why did you decide to get into the Bitcoin ATM business?

Cailen Sullivan: I had been involved with crypto currencies since late 2012. Mostly trading and mining. A buddy of mine from school and I always used to toss around business venture ideas and it was during fall 2013 that I started to seriously consider Bitcoin ATMs.

I had been trying to get another venture off the ground when Robocoin announced its machines were coming out. My buddy called me and we chatted about the gap in the market for tangible exchange and providing somewhat of a face to Bitcoin. Then when the Vancouver numbers came out ($1M in CAD a month), we thought it could be a great opportunity.

However, none of us had $20k to shell out for a machine. We found an investor, raised some capital and bought two machines. Since then, we have completely changed our business model and have become largest operator and distributor in the world.

CT: You just added Bitcoin kiosks in San Francisco, Chicago and Boston, making it the largest network of Bitcoin ATMs in the US in just a few months. How did you manage to achieve such rapid growth completely bootstrapped?

CS: We have been doing a LOT behind the scenes, but this really comes down to our business model. We structured it to be horizontal, but very straight forward. We provide turnkey services (complete machine management, compliance, banking, cash/btc float, etc. — see website) to operating partners that buy machine packages from us and we also offer those services to guys who had previously owned a machine. In that regard, we are machine agnostic to what our company services.

There were a lot of guys out there who bought machines when the Bitcoin price was sailing through the roof, but didn’t have the legal framework, capital, or operational resources in place to run even a single machine properly. We saw an opportunity to saturate the market with our brand a lot faster if we opened our doors to manage other peoples’ machines. The machines in Boston and Chicago, for example, were owned by a guy who partnered with us. We now run his machines and send him a check every month on how it is doing.

The other part is our distribution model. We put out machines that are completely 100% company (ZenBox) owned but we also sell machine packages. These packages are awesome. Someone can purchase a package through us for $10k-$15k (typically the price of a machine) and we provide all of our services and a location to host it for a 50/50 revenue split.

For locations, we provide machines for free and pay 10% net revenue as a form of rent. That is a structure that was really created by the old ATM industry and helps a lot with distribution. We provide locations with a machine for free, pay them, provide them PR, and new foot traffic. Who could say no?

This model allows us to expand at light speed and much of our focus has been to lock down partnerships and locations. That’s our strong point. Right now, we have 10 machines live throughout the US and we’ll have tons more by the end of the year.

“We provide locations with a machine for free, pay them, provide them PR, and new foot traffic. Who could say no?”

-Cailen Sullivan


CT: What has been the biggest challenge so far?

CS: The biggest challenge so far really has been locking down locations. This is something that everyone in the industry has struggled with. We have met with all kinds of locations and it takes a lot just to get over the ‘What is Bitcoin?’ hurdle before even beginning to negotiate about placing a machine. However, we have since smoothed out that process. 

CT: You have been collaborating with Canada-based BitAccess in the recent launch of San Francisco’s first BTM. Will you continue working with this company and will we be seeing more BitAccss BTMs coming to the US in the future?

CS: Yes. We love working with BitAccess. They provide a product that is reliable and fast. Right now it provides the fastest way to buy and sell Bitcoin. It’s great and working so close with their team helps a lot.

We are able to give feedback which they act upon immediately. This allows our product to be flexible and adaptable to customer needs. Moving forward, all machines that we are distributing and selling will be BitAccess machines.

BitAccess machines

- BitAccess machines

CT: Are you looking into ways to further improve BTM technology with new any new features such as NFC, biometric ID, new design and form factors etc.?

CS: Right now that is not really our focus. Our focus is to establish the largest network of machines and to grow internationally. It’s a numbers game. We want to saturate the market with ZenBox and to be a recognized brand that is reliable and trusted. However, it is inevitable that innovation with new features will come. NFC would be a great addition.

CT: The ATM Industry Association (ATMIA) recently suggested that the Bitcoin ATM industry needs to adopt methods of self-governance now before it really takes off. Thus, the Bitcoin ATM industry should turn to the traditional financial system for guidance as it navigates this process. Do you agree with these sentiments or would you prefer a more hands-off approach?

CS: We have actually been working directly with ATMIA. Originally we had thought that joining with them would be of great help to the legitimacy of our industry. However, after meeting with them a couple of times we and other operators in the space decided that forming our own association would be of the most benefit.

I can not give away too many details, but it is in the works. And the ATMIA have been helping us a lot. I think that in the coming months we will have a great framework to represent and govern the sector correctly. And this is important to the legitimacy of all our companies.

CT: Personally, I believe it would be a real boost for mass adoption if two-way BTMs would start appearing at major airports. This way, people would be able to take advantage of lower exchange fees to local currency when travelling abroad. Do you think we are headed toward this and does your company have any plans for any airport locations?

CS: I am 100% with you on this. We are definitely interested in placing machines in airports for that exact reason. However, doing so is not easy and even if a machine were to be placed in one, there is a lot of education to the public that would have to happen in regards to using Bitcoin.

For now, these machines are being used mostly for pure exchange. Straight buying and selling. However, our ultimate goal is to build a remittance network. We are placing these machines everywhere we can to have enough machines in place to do so. Once in place we are developing software that will allow for global remittance built upon the Bitcoin rails (blockchain) to allow for instantaneous transaction of any currency.

The idea is to use our machines as tangible cash deposit or pickup locations everywhere in the world and for customers to use the machine without knowing they are using Bitcoin or being exposed to its volatility. First and foremost though is to get the machines out there. And for now those machines will only do exchange. 

CT: What do BTMs need to improve to become more ubiquitous?

CS: BTMs do not necessarily need to improve, but more the people or companies representing them. And that is what ZenBox is doing. We built a professional model and put together an experienced team to distribute BTMs in a legitimate manner.

There are too many “mom and pop shop” operators out there for larger chains of locations for BTMs to be taken seriously. We hope that our professionalism helps not only to grow our company, but to represent the industry positively.

CT: What are your plans for the future?

CS: I’ll give a high level overview of our company and vision. Also be sure to go to our website and click on partners. You will get a lot of information in regards to our package prices and what it takes to host a machine. We are constantly on the look out for new locations and partners.

ZenBox, as of now, is a turnkey distributor, operator, and owner of financial services kiosks.

  • Our main service and source of revenue comes through a spread (6%) on the buying and selling of Bitcoin. However, we are not limited to this and offer other services as well. (bill pay, phone cards, gift cards, etc.)
  • Our business model allows us to reach rapid market saturation by selling machine packages with 50% revenue share.

Our overall vision; Disrupting the Global Remittance Network .The goal is to rollout machines that are profitable from day 1, to internally support and fund worldwide growth.

Once the network is established we plan to use these machines as remittance portals built on top of a decentralized payment protocol (like the Bitcoin blockchain). Doing this allows us to send money around the globe for extremely low fees, undercutting Western Union and others dramatically. 

“Doing this allows us to send money around the globe for extremely low fees, undercutting Western Union and others dramatically.” 

 -Cailen Sullivan


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