Return Path

Reputation is critical to most businesses, but on the Internet reputation takes on an even more important role. When you do business with a person or a company that you cannot see and you don’t know, you really need some data about their reputation. Some of the most successful businesses on the Internet are built on reputation.

eBay, for example, maintains a rating for each and every user in their marketplace that is updated to reflect their reputation in real time. User reputation ratings in eBay are crucial for creating an accountable, safe, and reliable community of buyers and sellers. Google’s page rank algorithm, that is the heart of their search engine, effectively measures the reputation of each and every page on the Internet and returns search results sorted by those pages that have the best reputations for a given keyword.

We are constantly looking for investment opportunities in other Internet businesses that are built on reputation and several months ago, we closed an investment in a Company that we know well and have been working with for quite a while already.

That company is called Return Path and they are the leading provider of email sender reputation data, deliverability, and whitelisting through a service called Sender Score. The Sender Score database tracks email senders (using the sending domain and IP address of the mail server that each and every commercial mailer uses to send their email). Return Path captures a host of data points about that sender through relationships with various points in the email flow from sender to receiver. Examples of the kind of data they collect are frequency of mailing, mail volumes, complaints, bounces, and unsubscribe request compliance. In all, Return Path captures about 60 different types of data on over 100 million email senders, being sent to them by over 30 sources representing almost 100 million email users, in real time.

As the name implies, each commercial email sender is given a Sender Score that is dynamic and always changing to reflect the current reputation of that sender. Return Path publishes these Sender Scores to the public at If you are curious about the reputation of an email sender that regularly sends you mail, you can find it at by looking them up either by domain or by IP address.

Return Path has built a large business over the past five years servicing the commercial email marketplace with various products that all rely to some extent on email reputation. For example, Return Path’s Sender Score Monitor product is a dashboard service that commercial email senders use to monitor their delivery rates at different ISPs and filters as well as test their emails before campaigns go out to help prevent problems. Monitor uses Sender Score reputation data to explain to commercial mailers why they have delivery problems so they can fix them. Return Path’s Sender Score Manager product is a full service version of Monitor that includes expert professional services to provide email senders additional help in managing deliverability and ISP relationships. Return Path’s Sender Score Certified is the industry’s largest whitelist service that allows mailers with very high Sender Scores (ie reputations) to be assured of getting through spam filters at over 1 billion mailboxes worldwide, from Hotmail to Yahoo, to major corporate filters. In all, Return Path has about a half dozen services – including a number of products and services for ISPs and commercial email filters – and is regularly rolling out new ones.

I’ve known Return Path since 1999 when my prior firm, Flatiron Partners, invested in the company in its first venture round. I’ve been on the board of Return Path since 2001 and have watched Return Path build its reputation based email deliverability business into the market-leading provider. Return Path recently made the determination to divest itself of its other semi-related lines of business to focus exclusively on the email deliverability and reputation business. They also acquired Habeas, their largest competitor in the deliverability business. In the process of doing these transactions, an opportunity presented itself to bring a new investor into the company, and Union Square Ventures was very pleased to be asked to be that new investor. You can read CEO Matt Blumberg’s blog post about the transformation of the business here.

Those that follow our investment activity closely will notice that this is a “later stage” investment, something that we are not known for doing. Brad mentioned in the post announcing our new fund that we would selectively look for late stage investments that operate in markets we know well and find attractive. This is the second such investment and certainly not the last.

We are very happy to be an investor in Return Path, joining Flatiron Partners and our good friends Sutter Hill and Mobius. And we are thrilled to be able to back a terrific management team led by Matt, Jack Sinclair, and George Bilbrey. We look forward to creating the next big reputation based business on the Internet.