Artifact Receives $5 Million in Series A Funding; Intersouth Partners, New Markets Growth Fund and Draper Atlantic Invest in On-Demand Software for Managing Global Application Development.

BALTIMORE -- Artifact, provider of the first and only on-demand software for managing global application development, today announced the close of its Series A funding, a $5 million round led by Intersouth Partners and the New Markets Growth Fund, along with participation by Draper Atlantic, the company's CEO Mark Wesker, and former president of America Online, Ray Oglethorpe. The funds will be used to further expand the company's sales and marketing efforts and drive new service innovations.

"Artifact's on-demand service, the Artifact Network, enables organizations to effectively establish, manage, and measure global application development strategies. We provide our customers and partners with a suite of on-demand applications that delivers deep executive level visibility into the global software development and delivery process, just as customer relationship management systems do for sales teams," said Mark Wesker, CEO of Artifact. "Combining executive level visibility with team management capabilities is the key to achieving the benefits of a global development strategy."

How software is created is changing dramatically. Organizations are investing heavily in software globalization strategies to reduce costs, improve efficiencies and gain access to new markets. From India, to China, to Eastern Europe and Russia, to rural America, companies are tapping into software resources distributed around the globe to produce software applications 24x7, and at reduced costs.

As global software development grows dramatically, a large percentage of software projects are failing. According to Gartner, a leading technology analyst firm, more than 50 percent of outsourced projects fail to deliver on original expectations. These failures are largely attributable to the absence of tools and systems designed specifically to address the information, communication and coordination challenges that are central to managing a global delivery process.

"Artifact has identified a major market created by the gap between today's software development tools and the global software development supply chain's resources," said Don Rainey, of Intersouth Partners. "Artifact's service successfully addresses this gap, and in fact, the service is already being implemented across a range of companies around the world."

"Every day technology is breaking down geographical and cultural barriers. This both enables and requires companies of all sizes to embrace global application development strategies and utilize intellectual resources from across the globe in order to successfully bring new products to more markets faster, and at lower costs," said Mark Grovic, managing director of The New Markets Growth Fund. "With its new on-demand products, Artifact is well positioned to help companies aggregate the global resources they need to be successful. As part of our own diligence effort, we spoke with many companies who are both outsourcing and offshoring software development. From these discussions, we quickly realized that Artifact's products and its growing member network are indispensable for companies that are implementing and managing global application development strategies."

"We're pleased to have such an accomplished set of investors," said Wesker. "With software having become pervasive across all industries, sectors, and countries around the globe, our market has neither boundaries nor borders. This is an immense opportunity, and we are certain that we have the right team of investors to help us create real value and achieve market leadership."

About Intersouth Partners

Intersouth Partners is an early-stage venture fund in the Southeast, having invested in more than 75 private companies over the last twenty years. Founded in 1985, Intersouth manages more than $500 million in six venture capital limited partnerships, making it the largest venture capital fund in North Carolina and one of the largest in the Southeast. Based in Durham, NC, Intersouth Partners seeks a broad range of investment opportunities in the information technology and life sciences sectors. For more information about Intersouth, please visit www.intersouth.com.

About New Markets Growth Fund

The New Markets Growth Fund is a $20 million venture capital fund that makes equity investments and provides operational assistance to both early-stage ventures and small- to mid-sized high growth companies located in Maryland, Washington, DC, and Northern Virginia. The NMG Fund seeks situations where either start-ups or more mature companies can commercialize innovative products and processes into domestic and foreign markets. For more information about New Markets, please visit www.newmarketsfund.com.

About Draper Atlantic

Draper Atlantic is an early stage information technology venture capital firm based in Northern Virginia and is part of the Draper Fisher Jurvetson Network of Affiliates. The Draper Network has seen over 30 of its companies complete an IPO, and has achieved successful sales of companies to the likes of Microsoft, Yahoo, Cisco, America Online, Inktomi, Amazon, GoTo and many others. For more information about Draper Atlantic, please visit www.draperatlantic.com.

About Artifact

Artifact provides the first and only fully integrated on-demand software that enables organizations to effectively establish, manage, and measure global application development strategies. The service includes a suite of on-demand applications that delivers deep executive level visibility and control into the global software development and delivery process. For more information about Artifact, please visit www.artifactnetwork.com.