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Stamps.com Closes $30 million Funding Round

By Connie Guglielmo
February 18, 1999 10:44 AM ET

Stamps.com announced today it closed a $30 million round of financing that saw it draw investors including Paul Allen's Vulcan Ventures, former U.S. Postmaster General Marvin Runyon and GeoCities Founder David C. Bohnett.

All are betting that Stamps.com, one of a handful of companies currently beta-testing a digital stamp and Internet delivery technology under the guidance of the U.S. Postal Service, can turn online postage sales into a booming business.

The Santa Monica, Calif., company has developed a server for delivering digital stamps for output directly onto envelopes, labels and business documents using a laser or inkjet printer. To be able to purchase digital stamps for download, Stamps.com requires customers to download its free Internet postage software from its site or one of its partner sites. Those partners include America Online, Avery Dennison and PeachTree Software.

The 3-year-old company expects to complete it beta trials and open its site for business by mid-1999, according to John Payne, president and chief executive officer. Its objective, and that of competitors including E-Stamp, NeoPost and Pitney Bowes: to capture a part of the $38 billion spent each year in the U.S. on first class, priority and express mail. "We think there's an opportunity to grow a customer base very rapidly," Payne said. "We see this investment as part of our prelaunch strategy to build a war chest to do marketing and help us establish a brand name on the Web."

"Stamps.com has embraced my vision of using technology to provide even greater convenience to the postal customer," Runyon, a longtime auto industry executive with an strong operations background gained career included work at Ford Motor Co. and Nissan Motor Manufacturing Corp. USA, said in a prepared statement. "I am excited to assist an already strong management team in building quality operations and systems to support what will be a large and rapidly growing segment of the postal industry."