E-mail Change of Address Firm Scores $6.5 Million

  |  December 11, 2001   |  Comments

Following its merger with competitor Veripost, Return Path attractsfinancing from existing and new investors.

In another example of how email has come to dominate interactive marketing, email change-of-address firm Return Path, which merged with competitor Veripost in October, has snared $6.5 million in new financing -- no mean feat in a tight funding environment.

Sutter Hill Ventures led the round, with existing investors Flatiron Partners, JP Morgan Partners, Mobius Venture Capital (formerly SOFTBANK Venture Capital), and DoubleClick also participating.

Return Path provides a service aimed at helping businesses keep their email lists free of "dead" addresses. Clients join, in effect, an email partnership, which has them cooperating to keep one another's lists clean. When an email user changes his address with one of the partner companies, he's given the option of making the change with the other partner companies with which he has a relationship. The system therefore helps consumers make changes more easily, which also helps Return Path clients.

"Return Path has wisely built its business by helping companies retain existing customers and increase the value of those relationships," said Greg Sands, managing director with Sutter Hill. "Recent events highlight the increasingly important role of commercial email, and I've been very impressed by the progress the company has made with customers and partners."

Besides the anthrax scare, which proved to be a boon for email marketers, the shutdown of Excite@Home's ISP, and the potential change of thousands of email addresses that will likely ensue, also serves to highlight the importance of a service like Return Path's. The company's research has found that 32 percent of consumer email addresses change annually, because of a change in ISP, job, or other events.

"We've seen a spike in email address change registrations among Excite@Home subscribers in December, as well as for job changers given the fluid economic environment," said Matt Blumberg, Return Path chief executive officer. "Businesses whose customer email lists contain these terminated email addresses are also impacted at the height of the online shopping season. We can help them recover those unintended customer losses."

So far, Return Path has registered 2.5 million email address changes, and has signed 120 companies to the service. Clients include the American Bar Association, Palm Computing, Pottery Barn and Saks Fifth Avenue. Partners include Acxiom Corporation, Bigfoot Interactive, DoubleClick, and Experian.

The funding comes hot on the heels of Return Path's merger with competitor Veripost, which occurred in October. The two start-up companies emerged at around the same time, and the merged entity is effectively the leader in the space. The first player to develop a commercial email change of address service, Active Names, shut its doors earlier this year.

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ABOUT THE AUTHOR

Pamela Parker

Pamela Parker is a former managing editor of ClickZ News, Features, and Experts. She's been covering interactive advertising and marketing since the boom days of 1999, chronicling the dot-com crash and the subsequent rise of the medium. Before working at ClickZ, Parker was associate editor at @NY, a pioneering Web site and e-mail newsletter covering New York new media start-ups. Parker received a master's degree in journalism, with a concentration in new media, from Columbia University's Graduate School of Journalism.

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