Zumbox to ramp up US operations with $10m investment

Digital postal mail company Zumbox has raised $10.6m ahead of plans to ramp up its electronic transactional mail services in the United States. The firm that offers every home in America an alternative digital mailbox tied to their physical address raised funds from existing shareholders and also its strategic partner Computershare, the Australian-based financial stakeholder communications giant.

Although numbers are not being disclosed, it is understood that roughly half the investment in the Series C round came from Computershare, which is highly active in the US as well as Australia, where it is also partnering Zumbox in the development of its Digital Post Australia project.

The Series C funding round brings the total fundraising at Zumbox to $28m.

John Payne, the chief executive of Los Angeles-based Zumbox said the funding round would go towards expanding the business in the “rapidly” growing US market, with the expectation of adding some large new customers between now and the end of the year.

“Part of this will be ramping up our US situation considerably over the next few months,” he told Post&Parcel in an interview yesterday.

“It’s about being able to scale for the significant mail volumes that we have coming on board. With Computershare as just our partner, we need to expand because they will be bringing large volumes of mail to us.”

Zumbox does not disclose its volumes or numbers of account holders, but Payne would say that the mailers currently using the system would in theory reach 90m out of America’s 120m households if every American household signed up for their free Zumbox account. The company first launched its digital mail services in February 2009.

In the US market, Zumbox is up against Hearst Corporation’s Manilla service, which yesterday revealed that it has just signed up its one millionth consumer, supporting mail services from 2,000 mailers. Later this year it will also see competition growing when Pitney Bowes’ Volly digital mail service has its consumer launch in the US.

Expansion

Payne said in the coming months, he was expecting the size of his company to significantly expand, with the workforce set to double from the current 35.

“We have been building out relationships (with mailers) and now those relationships are starting to come online, so we need additional technical staff and capacity in the network to manage those relationships,” he said.

David Hynes, global chairman of communication services at Computershare, said his clients were looking to tackle the rising cost of postage for paper mail, and broaden digital communications with their customers “in a user-friendly, secure environment”.

He said: “They have to do something different if they are going to reach their goals in these areas and Zumbox has solved both those problems with its Digital Postal Mail service offering.”

Australia

Along with Computershare and another partner, marketing agency Salmat, Zumbox is developing a digital postal mail service in Australia.

Payne said yesterday the Digital Post Australia project was going well despite aggressive competition from digital mail rivals Australia Post, and that the service could be launched in September or October.

“We believe that it will be live in the third quarter with a system that will be available to all Australian citizens,” he said.