Lob raises $50M for its direct mail platform

Lob is a startup promising to help businesses deliver physical mail more quickly and affordably, and with more personalization.

The company estimates that its platform has been used to deliver mail to one in two U.S. households. And today, it’s announcing that it has raised $50 million in Series C funding.

CEO Leore Avidar told me he founded Lob with Harry Zhang nearly a decade ago to “allow people to send mail programmatically.” Over time, the company has become increasingly focused on enterprise clients — its 8,500-plus customers include Twitter, Expedia and Booking.com — although Avidar said it will always offer a product for small businesses as well.

Avidar explained that in a digital age, there are two main categories of physical mail that Lob continues to support for its customers. First, there’s mail sent for “a regulatory purpose, a compliance purpose” — in other words, mail that businesses are legally required to send in printed form. Second, there’s direct mail sent as marketing, which Avidar said many companies are rediscovering.

“Marketing as a whole is always trying to find a unique channel in order to make their customer aware of whatever their call to action is,” he said. “Right now, social is really expensive, Google AdWords is super expensive, with email you can easily unsubscribe. No one’s been paying attention to direct mail, and the prices don’t scale with supply and demand.”

Lob tries to maximize snail mail efficiency with another $20M

Lob says that it can reduce the execution time on a direct mail campaign by 95%, from 90 days to less than a day. For the actual printing and delivery, it has built out a network of partners across the country. And other companies like PostPilot and Postalytics are building on top of the Lob platform.

The startup has now raised $80 million in total funding. The new round was led by Y Combinator Continuity Fund — Lob participated in the YC accelerator and the Continuity Fund also led the startup’s previous funding.

Avidar said the company is planning to triple the amount of physical mail delivered through the platform this year, which means the round will allow it to continue expanding the Print Delivery Network, as well as increasing headcount to more than 260 employees.

“Lob is leading the digital transformation of direct mail, a business process used by every company on Earth that has remained virtually untouched by software,” said YC Managing Partner and Lob board member Ali Rowghani in a statement. “Lob’s platform delivers exceptional value to some of the world’s largest senders of direct mail by lowering cost and improving deliverability, tracking, reporting, and ROI. Even for the most sophisticated senders of direct mail, Lob’s API-driven product is vastly superior to legacy approaches.”