ELetter Launches Web-Based Bulk Postal Mailing Outsourcing

Computergram International, May 11, 1999

A California start-up will today launch an internet-based bulk postal mailing system that, while perhaps not as sophisticated as the handful of internet-based postage start-ups out there, may be more effective for its target customers of small- to medium-sized businesses. Companies such as E-Stamp Inc and Stampmaster.com are in the process of rolling out internet-based postage systems where the user - usually a small business - prints postage values downloaded from the web onto their envelopes.

There seems to be a slight problem with that model when it comes to solicitation mailings, as many of the envelopes are pre- addressed, and the user needs to know the full zip+4+2 zip code format and to get the bulk postage rate. They also still have to take the mail to the post office themselves. ELetter is not a pure internet play in the E-Stamp or Stampmaster mold, but that may prove to be its advantage.

ELetter Inc will offer an outsourcing service that enables small to medium businesses to hand off their bulk postal mailings to the company by uploading their mailing lists and documents and letting ELetter do the rest. It uses the US Postal Service to mail the letters taking advantage of the bulk rates that it says it can get due to its overall volume of mail. The company claims it can send first class letters for 27 cents each, compared to the standard 33 cents.

Using a browser, ELetter uploads the list of names and addresses, which it says can come in more or less any format, including databases, spreadsheets and plain text. The addresses are verified against a USPS database by ELetter to ensure accuracy. If any of the addresses are outside the US, it uses TNT's international service.

The documents to be mailed are then uploaded through a browser. If the document or brochure uses color, ELetter can tell the customer exactly how much it costs using its proprietary ColorGauge technology, which analyzes the document in real-time, says ELetter co-founder, president and CEO Manish Mehta and gives them an exact pricing. He says the current bulk mailing models only offer three levels of pricing: black and white, spot color and full color, but this approach is far more granular. ELetter hosts its data center at Exodus Communications.

The lists and documents are then sent to its production center where an proprietary automated process called SplitStream prints, sorts, folds and stuffs the envelopes and ELetter transports them to the post office. All the envelopes have ELetter and the URL on the back of them to spread awareness of the service. By using equipment from Hewlett-Packard Co, CyberCash Inc and Pitney Bowes Inc, among others ELetter keeps its costs down at its production center where there are "no people involved," says Mehta, The company only employs 15 people in total, including the three co- founders.

Mehta is aware that privacy will be a big issue for its customers, as they are giving ELetter access to their customer databases. He says that during the beta testing over the past few months and for a while yet, ELetter has deleted the databases and documents once they have been sent, but he says that in future it will probably begin saving them so it can offer a faster service. He vows never to resell the lists and points to the company's ownership of a Truste seal of approval as its commitment to privacy.

It will also announce partnerships today, including one with iMall Inc, to add ELetter to its suite of e-commerce services and one with Mail Boxes Etc to have a PC in its retail outlets from where the ELetter service can be used. Mehta's previous start-up was 64k Inc, which was acquired by Verity Inc in 1997. Chief operating officer Kurt Brown was also at 64k, while VP engineering and third co-founder Vikram Sahai founded software licensing company, Viman Software, before ELetter.

Separately, the company will announce its first round of funding today of $3.5m, led by Trident Capital and including Artemis Ventures.