Los Angeles Business Journal

Internet Mailbox Service Thinks It Can Still Deliver

By Jonathan Polakoff Monday, May 5, 2014

Zumbox is dead.

Or is it?

The Thousand Oaks company told people using its virtual mailboxes that it would shut down its service April 14. But weeks later, the digital mail service is still available and the company is still in business. Now, it looks like Zumbox is trying to find a buyer or a partner instead of shuttering.

Chief Executive Gordon Adams said just as Zumbox was about to go out of business the company received substantial interest from potential partners and buyers. Optimism that the business will continue in some form led to a decision to keep the service alive.

“While we had some struggles, we do believe there is going to be a future,” he said. “People believe in the concept.”

Since launching in 2007, investors have bought into the concept of delivering physical mail digitally. Zumbox raised about $28 million over the years, with some coming from high-profile business people such as former Walt Disney Co. Chief Executive Michael Eisner. The company has apparently burned through the cash and is down to fewer than 10 employees.

The idea behind Zumbox was to create a single, secure place for people to access and pay their bills and view documents online, rather than signing in to separate accounts, for example, to pay the gas bill, cable bill and Macy’s card. The company also said it could filter out junk mail.

The service allows senders to upload and send digital files to customers who otherwise would receive the same documents in their physical mailboxes. People using Zumbox can still also get their mail delivered to their actual mailboxes. But Zumbox only makes money after people decide to go entirely paperless.

There have been signs that people like paying bills online. For example, banks have been able to convince more consumers to use the bill-paying functions on their own websites.

But the challenges for Zumbox in building a new brand and changing such a fundamental routine as sending and receiving paper mail has met more resistance from both companies and consumers than first expected.

The service charges mailers such as insurance companies a fee if a recipient of their mail has elected to go paperless. The pitch to companies is that digital delivery saves money compared with printing and mailing physical bills and other notices. Analysts said Zumbox-like digital mail services typically charge 20 to 30 cents per mailing, with discounts for large-volume mailers. Adams would not say how much Zumbox charges.

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