Arbor Networks Secures $22 Million in an Oversubscribed Series B Funding Round; Total Investment Grows to $33 Million.

Business/Technology Editors

LEXINGTON, Mass.--(BUSINESS WIRE)--Aug. 5, 2002

Investment from Thomas Weisel Venture Partners, Battery Ventures, Cisco Systems, Comcast Interactive Capital, SAIC Venture Capital Corporation, Ironside Ventures and EDF Ventures to support new product development and sales initiatives

Arbor Networks(TM), a leading provider of network availability solutions, today announced that it has raised $22 million in Series B financing from top-tier venture capital firms and strategic investors. Led by Thomas Weisel Venture Partners, the round includes Series A investors Battery Ventures and Cisco Systems, new strategic investors Comcast Interactive Capital and SAIC Venture Capital Corporation, and new venture investors Ironside Ventures and EDF Ventures. With this new round of funding, Arbor Networks has raised a total of $33 million. David Crowder, co-director of Thomas Weisel Venture Partners, will join Arbor's Board of Directors.

Underscoring the company's momentum in the network availability market, Arbor also today announced the appointment of Thomas Arthur as CEO (see Arbor Networks Names Former ActivCard President Thomas Arthur Chief Executive Officer, August 5).

Arbor Networks builds availability solutions for companies that run large, complex, mission-critical networks. Network anomalies that threaten availability - such as denial of service (DoS) attacks, network worms and routing attacks - can significantly impact revenue, reputation, relationships and critical communications. For example, the Yankee Group estimates that the impact of the February 2000 DoS attacks was $1.2 billion. Arbor Networks' Peakflow(TM) solutions close the gap between the detection of such anomalies and their resolution, protecting the availability of critical networks.

"We have observed strong demand for and, more importantly, an increase in spending on solutions that address the network availability challenges threatening large enterprises, providers and government agencies," said Dave Crowder, co-director of Thomas Weisel Venture Partners. "As evidenced by significant customer wins across these markets during this period of contracting IT budgets, Arbor has the right architecture to solve the difficult availability problems that vex the operators of business critical networks. We're confident that by building on its core dynamic baselining and anomaly detection technology and established customer base, Arbor will continue to grow and strengthen its leadership position."

"New attacks are cropping up all the time," said Chris Christiansen, program vice president, eBusiness Infrastructure and Internet Security Software, at IDC. "As such, it is critical for network operators to take a proactive, anomaly-based approach to detecting and quashing these threats. With anomaly-based detection, customers can do more than address known threats, they can rapidly detect and resolve next-generation attacks when they are first introduced to the network."

"Enterprises, service providers, and government agencies have invested heavily in their network infrastructure, yet they struggle to validate its effectiveness and remain vulnerable to attacks, misconfigurations, and the dynamic nature of network operations," said Thomas Arthur, Arbor CEO. "Arbor's ability to raise funding from premier investors in this tough financing climate validates not only the market opportunity, but also the strength of Arbor's technology, team and partnerships. We will use the new funding to develop new products, expand our initiatives and grow our team."

"Based on its standout team and customer-proven technology, Arbor has executed to plan, establishing leadership on the strength of Peakflow, its anomaly detection platform," said Todd Dagres, Battery Ventures general partner and Arbor director. "The Peakflow platform can be leveraged to address a host of availability threats beyond DoS. We are thrilled to continue supporting Arbor's growth and are confident they will maximize the tremendous opportunity before them."

About Arbor Networks

Arbor Networks(TM) builds availability solutions for companies whose success depends on highly available and fully optimized networks. Arbor Networks' Peakflow(TM) is a distributed, non-intrusive, scalable availability solution that detects network anomalies such as denial of service attacks, worm propagation and next-generation infrastructure attacks, and enables network operators to rapidly resolve these threats to ensure the highest level of network availability and performance. Arbor Networks' patent-pending technology is based on three years of pioneering research in the availability, reliability and security of networks and distributed systems, conducted at the University of Michigan by Arbor Networks founders. Funded by Thomas Weisel Venture Partners, Battery Ventures, Cisco Systems, Comcast Interactive Capital, SAIC Venture Capital Corporation, Ironside Ventures and EDF Ventures, Arbor has been recognized as one of UPSIDE Magazine's Hot 100 Private Companies in 2002, Red Herring's Ten to Watch in 2001 and Network World's Ten Start-Ups to Watch in 2001.

About Thomas Weisel Venture Partners

Thomas Weisel Venture Partners, L.P. (TWVP) is a $255 million venture capital fund managed by Thomas Weisel Partners. The fund is managed by co-directors Andy Sessions and Dave Crowder. To date, the fund has invested approximately $58 million in eight emerging technology companies. Thomas Weisel Partners is a research-driven merchant bank providing investment banking, institutional brokerage, private client services, private equity investing and asset management exclusively focused on the growth sectors of the economy. The firm's distinctive competence is combining deep domain expertise with bulge bracket execution capability. The team at Thomas Weisel Partners has 680 employees, including 70 partners, and is headquartered in San Francisco with additional offices in New York, Boston, Menlo Park and London. For more information about the firm, please visit its website at www.tweisel.com.

About Battery Ventures

Battery Ventures is a leading venture capital firm focused on technology investments. With a team of more than 60 professionals and nearly two decades of success, Battery has the people, experience, and capital to guide emerging technology companies to category dominance. Since 1983, the firm has invested worldwide in more than 130 companies across the communications, software and Internet/e-Business industries. From its offices in Wellesley, Mass., and San Mateo, Calif., the partnership manages more than $1.8 billion in committed capital. For more information, please visit www.battery.com.

About Comcast Interactive Capital

Comcast Interactive Capital (CIC) is a $350 million venture capital fund focused on broadband, enterprise and interactive technologies. CIC is affiliated with Comcast Corporation, a diversified global leader in broadband services, telecommunications, electronic commerce, and entertainment. The fund's primary goal is to generate superior financial returns from equity investments by bringing to bear the unique resources, experience, and insight of both CIC and the Comcast family of companies. Additional information is available at http://www.civentures.com.

About SAIC Venture Capital Corporation

SAIC Venture Capital Corporation is the venture arm of Science Applications International Corporation (SAIC). SAIC is the nation's largest employee-owned research and engineering company, providing information technology, systems integration and eSolutions to commercial and government customers. SAIC engineers and scientists work to solve complex technical problems in national security, homeland defense, energy, the environment, telecommunications, health care and transportation. With annual revenues of $6.1 billion, SAIC and its subsidiaries, including Telcordia Technologies, have more than 40,000 employees at offices in more than 150 cities worldwide. More information about SAIC can be found on the Internet at www.saic.com.

About Ironside Ventures

Ironside Ventures LLC is a venture capital firm, based in Waltham, MA, focused on making multi-stage equity investments in rapidly growing companies participating in the information technology and telecommunications industries. Particular areas of concentration include enterprise software, networking technologies and integrated circuits. The firm has guided many of its portfolio companies from their expansion stages through initial public offerings and successful strategic sales. Ironside Ventures has approximately $200 million of capital under management at this time. For more information about the firm, please visit www.ironsideventures.com.

About EDF Ventures

Ann Arbor, Mich.-based EDF Ventures is a venture capital firm with $120 million of private equity under management in three venture funds. Since forming its first fund in 1987, EDF Ventures has played a leadership role in providing venture capital to emerging technology companies with distinct investments in more than 30 companies to date. Many of their investments have been in companies whose technological roots can be traced to leading universities and research institutions. EDF Ventures' portfolio of investments hosts a concentration in information systems, technology, and health care. For more information, please visit www.edfvc.com.

Copyright (c) 2001-2002 Arbor Networks, Inc. All rights reserved. Arbor Networks, the Arbor Networks logo, Peakflow and the Peakflow logo, and ArbOS are trademarks of Arbor Networks, Inc. in the USA and other countries. All other trademarks are the property of their respective owners.