Stamps.com Raises $30 Million
Santa Monica-based Stamps.com Inc., developer of a system that will allow clients to have a “mini-post office” inside their computer, is expected to announce today that it has raised $30 million from a group of investors that includes Microsoft Corp. co-founder and billionaire Paul Allen.
In a $30-million private placement, Allen’s investment fund, Vulcan Ventures, along with Chase Capital Partners, will invest in Stamps.com, which was formed in 1996 by UCLA MBA graduates Ari Engleberg, Jeffrey Green and Jim McDermott, with the help of Mohan Ananda.
“This is a war chest for us to go out and build the No. 1 brand for Internet postage,” said John M. Payne, president and chief executive of Stamps.com, which is in a heated race with rivals for the virtual post office market.
The privately held company, which has more than 60 employees, is also expected to announce that three new investors will join its board, bringing the number to nine. They are David C. Bohnett, chairman and co-founder of GeoCities, the Marina del Rey Web community that recently agreed to be acquired by Yahoo; Marvin Runyon, former U.S. postmaster general; and Loren E. Smith, former chief marketing officer of the U.S. Postal Service.
The involvement of such high-profile investors as Allen, who has also been a major investor in the cable TV industry, and Bohnett is seen by Wall Street as an endorsement of Stamps.com.
The Postal Service has already authorized several other companies to offer systems that let a customer download postage and print it using a standard computer printer, in what is estimated to be a $38-billion-a-year market, and Stamps.com will have to compete with them. Its technology has been approved for testing and its system is expected to be launched midyear, the company said.
Stamps.com, formerly known as Stampmaster Inc., has a system that will allow users to download free Windows software. After registering, users will be able to buy postage electronically and print it on envelopes using standard laser or inkjet printers.
Major rivals include Pitney Bowes, the Stamford, Conn., company that has been the largest supplier of postage meter services in the U.S. since the 1920s.
Stamps.com got its early funding from three major Southern California-based venture capital firms: Enterprise Partners; Brentwood Venture Capital; and Forest, Binkley & Brown.