PORTLAND — Earth Class Mail, briefly among the best-known Oregon startups, filed for Chapter 11 bankruptcy Friday.
But the Beaverton company is still operating and is apparently preparing itself for sale.
“There’s someone that’s going to be buying Earth Class Mail,” said Amber Hensley, the company’s customer service manager. She said she cannot disclose the buyer’s identity, but indicated Earth Class Mail will continue operating under its new owner.
“We’re doing business as normal,” she said. “There weren’t any interruptions in the service.”
Chapter 11 is a voluntary bankruptcy for companies that seek an orderly reorganization of their debts.
Founded in 2004, Earth Class Mail correctly anticipated the rapid migration of correspondence from physical mail to electronic communication. The company saw an opportunity in helping manage that transition, offering to scan incoming mail for its clients and making the documents available electronically.
The novel concept landed Earth Class Mail a high-profile review in The New York Times. TechCrunch founder Michael Arrington hailed the service as “a great idea” in 2005.
Regulatory filings show the company raised at least $20 million in investment backing in its formative years, and another $3 million later. Formerly known as Document Command and Remote Control Mail, Earth Class Mail moved its headquarters to Seattle in 2006 but later returned to Beaverton.
Digitizing mail turned out to be quite expensive, though, and most people switched to electronic communication on their own, without help. Two similar mail digitizers, Zumbox and Outbox, shut down in 2014. That’s according to Adam Stein-Sapir of Pioneer Funding Group, who specializes in analyzing bankruptcy cases and first noted Earth Class Mail’s bankruptcy.
Attempting to revive itself, Earth Class Mail repositioned itself as a virtual mailroom for small and midsized businesses. The bankruptcy filing shows that’s been a struggle, too.
The filing lists $1.2 million in assets and $13.7 million in liabilities. The largest creditor is Ignition Partners, a Bellevue, Wash.-based venture capital firm and Earth Class Mail’s chief financial backer. Ignition says it’s owed $3.9 million.
Earth Class Mail had a little more than $5 million in revenue in both 2013 and 2014, according to the bankruptcy filing. The company lists a $1.5 million loss in 2013 and a $1.8 million loss last year.
The bankruptcy filing does not indicate how many people Earth Class Mail employs. It had 144 at its peak and 46 in 2011.
