Atrica Secures $75 Million in Third Round of Funding.

Business Editors & High Tech Writers

SANTA CLARA, Calif.--(BUSINESS WIRE)--Feb. 13, 2002

St. Paul Venture Capital Leads;

Combines with New and Existing Service Provider and VC Investors

to Give Optical Ethernet Leader Largest Round to Date

Atrica Inc., a leading provider of Optical Ethernet equipment for the $15 billion Metro networking market, today announced completion of a $75 million equity financing round -- the company's third and largest round to date. This significant investment round indicates the continued, widespread support by both the investment community and Atrica's target customer base -- the world's service providers -- for Atrica's Optical Ethernet System and its vision of Optical Ethernet as the right foundation for next-generation Metro networks.

Atrica will use the new capital to further expand its sales and customer support teams, as well as accelerate the marketing of its Optical Ethernet System.

St. Paul Venture Capital, a new investor, leads the round, which also includes other new investors JK&B Capital, Investor Growth Capital, Saturn Venture Partners (an affiliated fund of Telecom Italia), Gemini Israel Funds L.P. Limited, Lehman Brothers, Part'com, Challenge Fund, Young Associates, Triton Ventures, CDIB and Hotung. The new round also includes first and second round investors Benchmark Capital, Accel Partners, Ascend Technology Ventures, and notably, global service providers SBC Communications, Inc. (via AurumSBC Ventures) and France Telecom (via Innovacom) -- both of whom have invested previously in Atrica. Seed round investor 3Com Corporation also participated in Atrica's latest round.

With the completion of its third round of funding, Atrica boasts a comprehensive group of major service providers who have invested in the company in its announced rounds: BellSouth Corporation, Bezeq, France Telecom (via Innovacom), Saturn Venture Partners (an affiliated fund of Telecom Italia), SBC Communications, Inc. (via AurumSBC Ventures, an investment company whose shareholders are the Aurec Group and SBC Communications) and Telia.

"We are gratified to see that despite the challenging economic environment, we continue to attract world-class investment partners -- both existing investors and new partners," said Vivek Ragavan, president and CEO of Atrica. "In particular, we are pleased to see that our service provider investors are recognizing that the economics of Optical Ethernet solutions can dramatically improve their financial bottom line and that they view Atrica, as evidenced by this investment, as the right vendor to deliver these solutions," he added.

Bill Cadogan, General Partner of St. Paul Venture Capital, stated, "Companies with the right combination of vision, talent and products that solve the problems service providers face today, will continue to obtain funding. Atrica has demonstrated that it has the right team to execute on its vision, and the traction it has already gained with the incumbent and emerging carriers is impressive."

"The Metro Ethernet market has been one of the continuing bright spots in technology over the past year," said Ali Shadman, Partner at JK&B Capital. "Of the players in this market, Atrica has emerged as the company with the right solution at the right time and with a team that can see its vision through to fruition."

"To succeed in today's capital constrained telecommunications environment, vendors must build carrier-class products which enable incumbent carriers to smoothly transition from legacy networks to next-generation platforms that materially reduce carriers' capital expenditure and operating expense budgets while providing new, profitable revenue opportunities," said David C. Lee, Managing Partner of Saturn Venture Partners LLC. "We are immensely impressed with Atrica's value proposition and have never seen a start-up vendor with such tremendously meaningful traction with large, world-class carriers."

Founded in February 2000, Atrica received seed funding from 3Com Corp. and first round financing from a number of investors led by Benchmark Capital, Accel Partners and Innovacom. In February 2001, Atrica announced completion of a second round led by five global service providers: Telia (via Telia Business Innovation), SBC Communications, Inc. (via AurumSBC Ventures), France Telecom (via Innovacom), BellSouth Corporation and Bezeq. With the new round of funding, equity investment in Atrica now totals over $100 million.

About Atrica

Atrica's mission is to deliver the most cost-effective, high-performance Optical Ethernet platforms to forward-thinking service providers who are building next-generation Metro networks today. Atrica is a privately held company based in Santa Clara, California, with R&D facilities in Israel and business development and sales offices throughout Europe and Asia Pacific. The company received seed funding from 3Com Corporation, first round financing from prominent Silicon Valley venture funds Accel Partners and Benchmark Capital, and second round financing from five leading global service providers. For more information, visit Atrica on the Web at www.atrica.com.

About St. Paul Venture Capital

St. Paul Venture Capital is one of the largest early-stage venture capital funds in the United States with $3.0 billion in committed capital and offices in Minneapolis, Boston and Silicon Valley. The firm, founded in 1988, invests primarily in the areas of Communications, Business Internet, Consumer Technology and Health Care. For more information, visit the firm's Web site at www.stpaulvc.com.

About JK&B Capital

JK&B Capital is a venture capital firm based in Chicago with $900 million under management. The firm was founded in 1996 with the belief that in addition to capital and financial savvy, successful venture investing requires unique relationships and in-depth industry and technical expertise in order to identify the most attractive investment opportunities and consistently add value to portfolio companies. For more information, visit the firm's Web site at www.jkbcapital.com.

About Saturn Venture Partners

Saturn Venture Partners LLC, based in New York City, is a newly established $280 million venture capital fund investing in communications infrastructure and software companies. The fund was formed in partnership with Telecom Italia Lab, a subsidiary of Telecom Italia, and Ramius Capital Group, a New York based investment management firm. Saturn is a full-service venture capital firm with unique leverage from its sponsorship by its largest investors that include Telecom Italia, Telecom Italia Mobile and Olivetti. For more information see www.saturnvc.com.