Earth Class Mail’s extraordinary appetite for fresh capital continues, with the Seattle startup sealing a $5.1 million infusion from more than four dozen angel investors.
The new capital is expected to convert into the company’s second round of funding, with Earth Class Mail founder Ron Wiener saying that he is looking to raise $12 million to $25 million in that round. Bellevue’s Ignition Partners, one of the original venture backers, is expected to participate in the series B.
Those are big numbers, especially in this rocky climate. But Wiener said the company is doing well, benefiting from corporations and government agencies that are looking for creative ways to cut costs and make their organizations environmentally friendly.
Earth Class Mail has developed a way for people to access their postal mail online, essentially automating the mail room.
Customers view scanned versions of their mail online. Since they can decide to have the mail shredded and recycled, the company says that customers who use the service recycle as much as 90 percent of their postal mail. That compares to 20 percent for those who receive their mail through traditional channels.
While the company’s retail business has slowed a bit in recent weeks, Wiener said he can barely keep up with demand from large enterprise customers and national post offices. (He says a major deal with a European post office will be announced later this year.)
“We’ve been reeling from having too many prospective customers, including about 40 national posts, and only a handful of senior sales executives to respond,” said Wiener.
The company already has a major deal to manage the flow of mail at Sprint, including facilities in Reston, Virginia and Overland Park, Kansas.
Still, Earth Class Mail is a capital intensive business since it requires the physical task of scanning millions of pieces of mail. But Wiener said the company is better positioned than many startups which have yet to generate revenue and don’t have proprietary technology.
Wiener also said the company recently transformed its business to licensing the technology, which is less capital intensive than the outsourced model it previously employed. That means the company, nearing 100 employees, gets paid on a “per envelope” and “per-user-per-month” basis.
“Investors are much more interested in our company since we made this change to our model,” he said.
Total funding in the company, which attracted attention last year as the subject of a reality TV show called “Startup Junkies,” now stands at $21.4 million. That includes $3 million in secured debt.
“So far, we have not run into any challenges, that’s not to say we won’t,” said Wiener about the company’s fundraising efforts. “We’ve been fortunate to be able to demonstrate fantastic customer traction, especially in recent months.”
– John Cook, firstname.lastname@example.org