The idea behind Earth Class Mail — to banish your paper mail to the web — could save some serious fuel given, as the Seattle-based startup says, postal services represent 1 percent of the U.S. fossil fuel consumption. And the idea seems to be gaining traction: This morning Earth Class Mail said it has signed up Switzerland’s mail operator Swiss Post as the first national mail provider that will offer the service for a fee to its customers. In addition, the company says it recently closed a bridge round of $5.1 million in financing and is in the process of raising a Series B round of between $15 and $30 million.
It’s not such a good time to raise funds — other green companies have delayed fundraising and planned possible cutbacks — but Earth Class Mail has already raised $21.4 million, backed by Ignition Partners and a band of 133 angel investors.
The company has developed a strategy of going after white-label deals with national postal services, enabling the operator to brand the service as its own, which as Earth Class Mail CEO Ron Wiener explains, get its digital mail service in front of millions of customers in one fell swoop of a deal. Wiener says that the company is working on a deal with a large U.S. operator — like a U.S. Postal Service or Fed Ex type, he says — and expects to ultimately gain more customers through those deals, and less through its direct-to-consumer brand.
It could be a good deal for the mail operator as well, and in the age of digital communication USPS is facing significant mail reduction and higher costs. Swiss Post already does some web management of mail for government and business customers and the mail operator will extend that service by using Earth Class Mail’s mail permission platform.
Earth Class Mail is also increasingly focusing on government and business customers through its planned national mail deals. While a few months ago small businesses and consumers made up the bulk of the company’s customers, by the second quarter of 2009 Wiener expects government and big enterprises to make up about 80 percent of the company’s business.
So how does it work for customers? Users open an account and get a new address for mail delivery — in the U.S., a post office box or street address operated by Earth Class Mail. (In the U.S., Earth Class Mail is certified by the USPS to receive your mail.) The startup then receives your mail, scans it and posts images online; users choose whether to open, scan, shred, recycle, reroute or archive the mail. The pricing options start at $10 per month and go as high as $60 per month for the “professional” plan.
The initial drawback I see is that the way the system is set up now, Earth Class Mail could be a temporary step in the value chain. It’s a hybrid of traditional mail and web-based mail (the New York Times’ David Pogue gives the service a mixed review). But Wiener tells us that ultimately the company is planning on adding services that could turn advertisements and transaction-based mail straight into digital form.