SmartMail Services Receives $45 Million Equity Investment In Third Round Of Funding

Monitor Clipper joins Great Hill Partners as Investors in a New Breed of Expedited Mail Delivery Services

SmartMail Services®, an emerging leader of expedited flat-sized mail and light parcel shipping services, announced today the completion of its third round of funding raising $45 million in equity financing. The company, which expects to top $100 million in revenues this year, will use the investment to rapidly complete a national build out of its technology-driven distribution network, expand its light parcel shipping services to customers and increase sales and marketing initiatives.

Boston-based Great Hill Partners, along with Donaldson, Lufkin & Jenrette (NYSE:DLJ), managed the fundraising process for this round of funding, which was led by Monitor Clipper Partners, Inc. with additional investments from Landmark Partners, Bridge East Management LLC and Saugatuck Capital Partners. Great Hill Partners also participated financially in this round, in addition to committing $24 million to SmartMail's initial rounds of funding in August of 1999.

"SmartMail is a perfect fulfillment partner for traditional and e-commerce businesses that must increase fulfillment and supply chain efficiencies," said James Martell, chief executive officer, SmartMail Services. "This additional funding enables the company to complete the expansion of its distribution network and strengthen an already competitive offering versus traditional industry players UPS and FedEx." According to Forrester Research, the number of packages delivered by e-commerce companies to residential customers is estimated to grow to 2.1 billion per year by 2003. The e-commerce sector, significantly dependent on logistics as increasing numbers of people shop online, can benefit from the SmartMail delivery solution.

SmartMail provides an alternative to traditional mail and parcel delivery and offers significant discounts off USPS First Class™ and Priority™ rates for large volume business mailers. Through its innovative business model and workshare partnership with the United States Postal Service (USPS), the company retrieves, sorts and aggregates small parcels, expediting delivery and minimizing infrastructure costs for its customers. The company offers state-of-the-art tracking technology and serves the financial, manufacturing, retail and public sectors. The company has more than 400 customers including Barnes & Noble.com, CVS Pharmacy, Nissan, Gateway, Talbot's, Snapfish.com, Tower Records, TD Waterhouse, CitiStreet and Sony Electronics.

"Similar to telecommunication deregulation in the 1980s, SmartMail provides delivery and service savings through their efficient, national network of distribution centers and leverages USPS's existing infrastructure for final mile delivery." said Matthew Vettel, partner, Great Hill Partners. Vettel, Chris Gaffney and Bryce Youngren of Great Hill Partners serve on SmartMail's board of directors.

SmartMail's competitive industry position has created investor confidence. "This new growth capital infusion is a validation of SmartMail's strong business performance over the past year," said Michael Bell, managing director of Monitor Clipper Partners, Inc. and a founder of Monitor Company. "SmartMail has been able to dramatically grow its business by demonstrating it can provide value to large volume mailers by reducing postage and service costs while maintaining a one-to-four day-delivery commitment and providing enhanced information and services to mailers."

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