At a time when many investors are pulling cash out of the stock markets and looking for compelling investments, companies like Earth Class Mail have been able to float above many other earlier-stage deals that don't have the demonstrated track record of being able to significantly reduce operating costs and ecological footprint for major enterprise customers
Seattle, Wash. (PRWEB) October 21, 2008
Earth Class Mail Corp., the global leader in delivering postal mail via the Internet, announced that it has recently added capacity to address increased demand from Fortune 500 and government customers, including a 35% increase in staffing during the past two quarters and the opening of several new processing centers. Economic pressures that have been exacerbated by the financial crisis have prompted these large business and governmental organizations to seek immediate opportunities to cut costs related to mail and document handling by "going paperless," as well as to reduce their environmental footprint and boost employee productivity. They are attracted to Earth Class Mail's mail-center-based solution because it can deliver these benefits rapidly and with relatively small up-front investment, especially given that 99% of an organization's daily incoming paper-document flow typically funnels in through its mail center.
Earth Class Mail also announced that it has closed a new funding round of $5.1 million, some of which is earmarked for adding local mail-processing capacity in the New York, Los Angeles, San Francisco, Seattle, Washington D.C., and Kansas City areas. The company anticipates more new hires in the near future, especially in sales account-management and engineering, as numerous enterprise and government accounts launch new pilots and transition from a pilot phase to full roll-out implementations during the coming months.
Customer Preference Gradually Shifting from Full Outsourcing to SaaS Licensing
The majority of new major accounts in the company's sales pipeline are opting for SaaS ("Software as a Service") licensing. Instead of outsourcing all of their mail processing to Earth Class Mail, these accounts will dedicate their own equipment and employees to process mail-borne documents using Earth Class Mail's massively scalable web-hosted platform. Since introducing the SaaS licensing option, the company has been able to significantly reduce its need to add plant capacity and operational staffing ahead of revenues. Earth Class Mail anticipates that it will announce its first SaaS licensing agreement with a national postal operator of a European country this quarter -- a move that was previously not anticipated until at least 2010 but reflects an accelerating trend of national posts creating innovative new Internet-based services to offset declining volumes of paper-based mail due to electronic alternatives.
To capitalize on faster-than-anticipated demand for Earth Class Mail's platform by Fortune 500 and governmental customers, the company is intending to raise a Series B institutional financing round to continue its aggressive expansion into these large accounts, and to conduct parallel international deployment through strategic partnership deals with national postal operators throughout the world.
Rather than defer taking on new major accounts until an institutional Series B funding round could be raised, the Company's Board of Directors decided that, given the success of its syndication experiment with Keiretsu Forum on the company's $13.3 million Series A funding round last year, it would once again offer angel investors a "carve-out" in the form of a convertible note into an upcoming Series B financing. This resulted in the closing of $5.1 million of new angel investment this month.
"The existence of formalized angel networks such as Keiretsu Forum has made it possible for us to quickly and efficiently raise bridge capital between institutional rounds," said Ron Wiener, Earth Class Mail CEO. "By raising a record-breaking amount of $8.9 million of our total capital to date just from within the Keiretsu group alone, we appear to have become a 'poster child' for this global network of 750 angel investors, which has proven its value in filling the gap between traditional individual angel investors and institutional venture capital funds."
"At a time when many investors are pulling cash out of the stock markets and looking for compelling investments, companies like Earth Class Mail have been able to float above many other earlier-stage deals that don't have the demonstrated track record of being able to significantly reduce operating costs and ecological footprint for major enterprise customers," said Kenn Dahl, official Earth Class Mail Board representative of Keiretsu and other angel investors. "The Board saw the opportunity to leverage the pent-up interest from a good number of Keiretsu investors who missed the deal the first time, or wanted to increase their stake, to raise a relatively small amount of growth capital without the distraction of having to raise a major follow-on institutional round. We wanted management to be focused first on securing these major customer gains so that we would be in a better position to attract top-drawer, later-stage VCs into our B round."
About Earth Class Mail
Earth Class Mail™ provides the only online postal-mail service designed for individuals, small businesses, large enterprises, government agencies, the military, and national postal operators. Users enjoy the freedom of accessing their postal mail from anywhere in the world, just as they do their email, voicemail and cell-phone calls. Earth Class Mail scans the exterior of customers' incoming mail in high-res color and presents the envelope images to the recipient in an email alert and in the customer's online account. Then, with just a mouse click, the user commands how each item is to be processed, from opening it and scanning the contents for secure online viewing to recycling, shredding, archiving and forward-shipping it. Users in more than 175 countries now receive their postal mail at one of 23 U.S. addresses -- from New York City to Los Angeles. Additional receiving addresses in Europe and elsewhere will be added through partnerships with national postal operators in early 2009. For enterprise and government customers, Earth Class Mail digitizes paper mail at its entry point, injecting it directly into an organization's electronic workflow and saving 75% of typical downstream document lifecycle costs.
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