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Land More E-mail in Your Targets' Inboxes

With the acquisition of OtherInbox, e-mail deliverability company Return Path hopes to help businesses do just that.

E-mail management company Return Path, a 2006 and 2007 Inc. 500 honoree, has bought start-up OtherInbox, which also focuses on e-mail delivery.

OtherInbox's software helps users automatically organize their e-mails. The company will be a wholly-owned subsidiary and remain in Austin, where New York City-based Return Path plans to expand operations. The financial terms of the deal were not disclosed.

Return Path, founded in 1999, helps commercial e-mail senders land more e-mail in its targets' inboxes. Its customers include Groupon and Twitter. The privately-held company has 300 employees, and its investors include Union Square Partners and Mobius Venture Capital.

"The decision to acquire OtherInbox was based on its technology and its broad customer base, but separately we've been talking about where we might expand operations, and Austin was on that list," spokeswoman Tami Monahan Forman told the Austin American-Statesman. "The cost of living, the tech scene and the talent pool were very attractive to us. The opportunity to get that as part of the bargain with OtherInbox is awesome."

OtherInbox founder Joshua Baer is a serial entrepreneur. He founded his first company, e-mail service provider Skylist, from his dorm room at Carnegie Mellon University. Skylist's client list grew to include Microsoft, Nascar, and Disney; it was acquired by New York City marketing firm Datran Media for an estimated $10 million in 2006.

Another Baer start-up: UnsubCentral, which also was acquired by Datran Media. He founded OtherInbox in 2008. Its free service organizes e-mail—think Gmail's Priority Inbox—and has more than 2 million users. (The difference between OtherInbox and Gmail? “Your Priority Inbox keeps the e-mails you really want at the top. Organizer keeps the automated e-mails out of your Inbox altogether," Baer told VentureBeat. Plus, OtherInbox also works with other e-mail, such as Yahoo!)

The company's revenue came from, among other things, advertising to its Daily Digest e-mails, which summarize e-mails that have been kicked to other inboxes. Last summer, the company also planned to sell anonymized data about user trends.

OtherInbox has raised $4 million from private investors, ranging from law firm Wilson Sonsini Goodrich Rosati PC to venture capitalist Dave McClure, the founder of 500 Startups. 

Baer himself has invested in 25 Austin companies, and helped start technology incubator Capital Factory.

Inc. contributing editor Courtney Rubin was for five years a London-based staff writer for People magazine. Rubin, a former senior writer for Washingtonian magazine, has written for the New York Times magazine, Time, Marie Claire, and other publications. She is the author of The Weight-Loss Diaries.