YC’s Continuity Fund leads $20 million investment in Lob’s mail service

The postage business may seem antiquated in the year 2017, but physical mail is still kicking. In fact, it’s a $1.4 trillion dollar industry, according to the USPS. Lob has bet on this market with a service to help companies manage and send mail, and today the startup announced a $20 million round led by Y Combinator’s Continuity Fund.

“You can think of Lob as Amazon Web Services for physical mail,” wrote Lob cofounder and CEO Leore Avidar, in an email to VentureBeat. Companies send Lob an API request by providing an address and content in the form of HTML, which can originate from any application, script, or user action. Lob then prints and mails the letter, postcard, or check to the desired address on behalf of the customer.

Lob primarily sends mail through USPS but occasionally uses FedEx or UPS for overnight mail. The startup’s print delivery network automatically routes the mail to the closest postal facility based on the destination. Customers are then provided with analytics on tracking information.

The San Francisco-based startup offers customers different pricing tiers, depending on the amount of mail sent and usage of the platform. Avidar claims that to date Lob has sent mail to one in nine U.S. households through hundreds of its customers, which include Counsyl and Couchsurfing.

Today, Lob also announced its new address verification API, which will provide customers with access to more than 156 million domestic addresses to avoid improperly addressed mailings. “Cleansing addresses and preparing mail for sending is a tedious and difficult process,” wrote Avidar. “Our API is CASS certified by USPS, which means that companies who use it can qualify for automation and presorted discount postage rates.”

A graduate of YC’s summer 2013 batch, Lob has raised a total of $29.4 million to date. Existing investors Polaris Partners, Floodgate, First Round Capital, and Initialized Capital joined YC’s Continuity Fund in today’s round. According to Avidar, this is YC Continuity’s fourth investment since launching in 2015, which YC confirmed. Ali Rowghani, former COO of Twitter and YC partner, will be joining Lob’s board of directors.

The startup says it plans to use the fresh money to expand its print delivery network, build more robust UI tools, and release complementary APIs “that further assist our core users in automating tedious back office workflows,” wrote Avidar.

Founded in 2013, Lob currently has 45 employees.