Internet postage provider Stamps.com (Nasdaq: STMP) announced today that it has created a new subsidiary that will offer encrypted printing of tickets, vouchers, certificates and other paper instruments for the events, travel and financial services industry.
The subsidiary will be called EncrypTix, the company said. It will utilize Stamps.com’s existing proprietary technology to securely print and complete transactions over the Internet through a laser or inkjet printer.
The company will be a wholly-owned subsidiary of the Santa Monica, California-based Stamps.com, which will seek capital for its new subsidiary after it completes the licensing of its technology.
Former SunAmerica senior vice-president and board member Jim Rowan has been recruited to head EncrypTix. Rowan has been consulting for Stamps.com.
“We created EncrypTix to establish and develop new, alternative uses for Stamps.com’s technology for Internet-based transactions,” said Stamps.com CEO Jim Payne. “Stamps.com can continue to focus on growing the user base for its Internet postage service and developing a complete, one-stop mailing, shipping and tracking solution on the Internet.”
A Stamp of Approval
The new subsidiary will give Stamps.com an edge on main competitor E-Stamp, which, like Stamps.com, received approval from the U.S. Postal Service in August to offer postage over the Internet. Both companies went through a rigorous approval process and were the first companies in 80 years to be granted the right to dispense postage through a new medium.
Stamps.com announced last month that it has attracted 10,000 customers since its national launch earlier in October. Stamps.com had rolled out its service in select states before the national launch.
The company also announced that it lost $14.4 million (US$) in the third quarter. However, the company filed with the SEC earlier this month to sell five million shares of common stock in an effort to raise $273 million after expenses.
In addition, Stamps.com signed a $56 million marketing alliance with AOL last month, making it the exclusive Internet postage provider across AOL properties. The number one portal also invested an undisclosed sum in Stamps.com and took an equity stake.
The company said that the money it is raising will be used to fund sales and marketing efforts, as well as new technology developments. Stamps.com went public in June, raising $55 million in an initial public offering.
Tangled Up In Law
Stamps.com also announced that it will use a portion of the money to fight an intellectual property patent infringement suit brought against it by dominant postage meter company Pitney Bowes. Bowes also filed a similar suit against E-Stamp.
In the meantime, the Department of Justice’s Antitrust Division — the same outfit that has taken Microsoft to its knees — has launched an investigation into allegations of monopolistic practices by Pitney Bowes in the postage meter and online postage industry.