2nd Century Receives $75 Million in Investments From Dell, Intel, Microsoft and Top Venture Firms; Private Financing Round Brings 20-Month Total to $155 Million.

Business/Technology Editors

ARLINGTON, Va.--(BUSINESS WIRE)--May 15, 2000

2nd Century Communications, an open network application service provider, today announced investments from Dell, Intel and Microsoft. These investments, coupled with repeat backing from Accel Partners, North Bridge Venture Partners, Venrock Associates and a large increase in funding from Meritech Capital Partners brings 2nd Century's total funding to $155 million in 20 months.

2nd Century currently has a presence in 21 cities nationwide (see editor's note for full list of cities) and plans to use the capital to expand its presence to 35 cities by the end of 2000, deploy strategic marketing and sales initiatives, and continue to staff appropriately for growth.

"We're proud that our investors see value in our vision, management and direction; and this round of financing allows us to accelerate our city launches and continue to build out our network and our suite of products. 2nd Century is focused on the unique needs and demands of small and medium businesses. This funding, from investors with industry-leading combined expertise in PC distribution, high-speed processors, networking and software services, shows their commitment to servicing this essential market segment as well," said John Prisco, president and CEO of 2nd Century Communications.

2nd Century targets small and medium businesses with its end-to-end business solution of broadband access, desktop management and data and voice applications. 2nd Century delivers computing applications and advanced communications over their unified packet network, empowering small and medium businesses to compete effectively in today's constantly changing economy.

In April, 2nd Century opened its corporate headquarters in Arlington, Va., announced the next 14 cities for expansion, won a "Product of the Year" award, was named one of "Top Ten Companies to Watch," and named additional appointments to key posts within the organization.

"2nd Century's direction and experience with small and medium sized businesses complements Microsoft's initiatives regarding software as a service," said Alan Mitchell, director, Network Solutions Group, Microsoft. "2nd Century has built a scaleable network and this additional strategic funding will enable 2nd Century to successfully grow and meet their customers' communications needs."

2nd Century's converged network utilizes a single protocol and a single switching fabric to deliver multiple applications including telephony, Internet, computing and IT services. This next-generation network architecture enables 2nd Century to offer remote desktop monitoring to the network interface card from 2nd Century's Network Operations Center. It will also allow for remote desktop management of computers and service guarantees customizable by desktop.

"As Intel drives to become a building block supplier to the Internet, we want to support additional service provider business models. 2nd Century is an exciting company working to meet the unique application, communication and data needs of small and medium businesses. We believe our investment with 2nd Century will help them to accomplish this," said Scott Richardson, General Manager, Intel Internet Management and Appliance Division.

Private Financing

"We've watched 2nd Century's success and innovation over the past two years and are pleased to be the lead investor in this round of funding," said Paul Madera, managing director at Meritech Capital Partners. "We only invest in pioneering companies that have the potential to redefine an industry; 2nd Century is a prime example of the kind of company that will continue to anticipate and act on customer needs."

In July 1998, 2nd Century secured $10 million in private equity from Accel Partners, North Bridge Venture Partners and Venrock Associates. The company used this initial funding to launch the nation's first packet-based network, a milestone achievement that was recognized this April when 2nd Century was honored with a Product of the Year award from Network Magazine.

In July 1999, a new investment from Meritech Capital Partners, as well as repeat funding from Accel Partners, North Bridge Venture Partners and Venrock Associates secured a $20 million second round of financing.

In January 2000, 2nd Century received $50 million in debt financing from GATX Capital that enabled 2nd Century to construct its first 11 markets. The financial backing also allowed 2nd Century to focus on the development of a solidified channel strategy. 2nd Century's channel partners' had signed 42 customers by March 1, 2000, and as of April 28, 2nd Century had signed more than 100 customers.

"2nd Century has been recognized as an innovative player in the communications arena. Backing from three top companies in the industry and four of the top ten venture capital firms in the country helps further their corporate vision and assists in additional research and deployment for their advanced applications," stated Brian Adamik, chief operating officer of the Yankee Group. "The ASP market is quickly being diluted with the `have' and `have not' providers; today 2nd Century confirmed they are a major player in this competitive landscape."

About 2nd Century Communications

Headquartered in Arlington, Va., 2nd Century is a privately-held, emerging communications company representing the intersection of networking and applications by providing small and medium businesses a complete package of business tools including high-speed Internet, desktop management solutions, self-healing software, and voice applications. As an open network application service provider with a presence in 21 cities nationwide, the company's network combines the flexibility of an Internet architecture with the reliability of a traditional voice network. 2nd Century provides a complete end-to-end solution that begins with broadband access and reaches all the way to the desktop with applications and proactive management support. 2nd Century was recently awarded "Most Innovative CLEC," by Network Magazine, and named one of "10 Companies to Watch," by Network World. Visit us on the World Wide Web at www.2ndcentury.com.

Editor's Notes:

For more information about our investors please visit their Web sites:

Accel Partners - www.accel.com

North Bridge Venture Partners - www.nbvp.com

Meritech Capital Partners - www.meritechcapital.com

Venrock Associates - www.venrock.com

      Current 2nd Century cities include:

Atlanta                    Milwaukee
Austin                     Nashville
Baltimore                  Orlando
Boston                     Philadelphia
Charlotte                  Pittsburgh
Chicago                    Portland
Cincinnati                 San Antonio
Dallas                     San Francisco
Houston                    Tampa
Jacksonville               Washington, D.C.
Miami