Using Internet technologies and digital printing systems, ELetter aims to give 10 million small companies the same kinds of outsourced mailing services that big mailers get.
"Sending mailings is a necessity for many companies, but let's take it off their hands and not get them involved in the grungy details of stamps, envelopes, and addressing," said Manish Mehta, chief executive of the start-up.
The U.S. Postal Service estimates that 10 million small to midsize firms spend more than $6 billion annually on postage. Mehta figures that 92 percent of them prepare their mailings manually.
ELetter drives down costs by automating the entire system with software. In addition, using digital printers avoids the costly process of setting up offset printing presses for each job, a source of higher costs from manual printing processes.
"ELetter has applied an entirely new level of automation to digital production that will have a significant impact on the entire industry, above and beyond implementing cost-effective mailings for small- to medium-sized businesses," International Data Corporation analyst Steve McClure said in a statement.
The company also will announce $3.5 million in venture capital from Trident Capital, Artemis Ventures, and individual investors.
ELetter's system involves using a Web browser to designate the print details on a job, then having the ELetter servers upload the wording and format for the mailing, then the mailing list. For customers that want a proof, ELetter will mail a copy of the actual printed mailing for review.
To market the service, ELetter has partnered with mailing list firm infoUSA, direct marketing firm ThinkDirectMarketing, and iMall, a self-styled shopping portal that will offer the service to thousands of businesses that are its customers.
Mehta said digital printing is cheaper for printing 50,000 or fewer pieces than standard offset printing, and his firm targets printing runs of 10,000 or fewer copies.
In addition to pursuing the small business market, ELetter also hopes to take advantage of the trend of direct mail firms using more and more targeted mailings. That means smaller print runs--and an advantage for digital printing like ELetter's.