Bandspeed Raises $15 Million in Venture Funding; Cisco Systems Joins High-Tech Venture Capital Firms Investing in Innovative Technology That Elevates Broadband Performance.

Business Editors & High-Tech Writers

AUSTIN, Texas--(BUSINESS WIRE)--June 19, 2001

Bandspeed Inc., an emerging leader in performance-enhancing signal processing solutions, has raised $15 million in venture capital (VC) funding.

High-tech VC firms JatoTech Ventures and MSD Capital led the round, with additional participation by Cisco Systems. Bandspeed is delivering innovative signal processing technology for broadband equipment that elevates performance to a new level -- increasing data rates, expanding reach and improving reliability.

"Bandspeed is setting a new performance watermark for standards-compliant broadband systems," said Walt Thirion, general partner at JatoTech Ventures. "For ADSL, carriers will benefit economically as they capture more customers and lower deployment costs."

The company will use the new funding to develop and market state-of-the-art transceiver chipsets and software for wireline and wireless broadband communications systems. Additionally, the new funds will be used to hire key talent in its Austin, Texas office, as well as its research and development (R & D) center in Melbourne, Australia.

"We believe Bandspeed is creating technology that will significantly advance the broadband communications market," said Andrew White, co-head of the Venture Capital Group at MSD Capital. "The company's engineering team has invested over three years of effort creating fundamental technology that extends the edge of performance for standards-compliant broadband systems."

Bandspeed's signal processing algorithms and new transceiver reference designs make possible higher performance solutions and standards-compliant receiver implementations.

"We welcome the additional technical and strategic resources our new investors provide within the communications and semiconductor industries to facilitate the productization and rollout of our technologies," said Michael Luther, Bandspeed's co-founder and chief executive officer. "We have invested significant time and effort in developing an extensive portfolio of key technology, and in building a world-class team of scientists and developers in Melbourne. We're excited that our investors recognize the value of our R&D team and in what we're creating for high-performance commercial broadband products."

Luther and co-founder Dr. Stan Skafidas, Bandspeed's CTO, began developing proprietary technology to improve the "last mile" in broadband communications in 1998. Luther located the company's headquarters in Austin, Texas, a city known for its wealth of semiconductor talent and strong VC community. Dr. Skafidas established the company's R&D laboratory in Melbourne, Australia, and recruited an engineering team with unique communications technology development experience from the Australian and Russian defense departments and China Telecom. The team is recognized by the Victorian Government as a founding member of its Chipskills initiative.

About Bandspeed Inc.:

Bandspeed is an emerging leader in performance-enhancing signal processing solutions focused on alleviating critical limitations in broadband communication systems, particularly for the DSL and wireless markets. Leveraging its extensive portfolio of intellectual property, the company develops transceiver chipsets and software that deliver standards compliant, state-of-the-art performance over bandwidth-constrained channels. Headquartered in Austin, Texas, Bandspeed also has a research and development facility in Melbourne, Australia. For more information, visit www.bandspeed.com.

About JatoTech Ventures:

JatoTech Ventures, Inc., which recently announced five investments from its initial $55 million fund, was founded by Walt Thirion and Molly Pieroni and specializes in early-stage, technology-based ventures in the areas of networking, communications and Internet-related businesses. The firm is located at 301 Congress Avenue, Austin, TX. For more information, visit www.jatotech.com.

About MSD Capital, L.P.

MSD Capital is a private investment firm engaged in a broad range of activities, including traditional private equity investments, investing in publicly traded securities and investing in technology companies. In the technology investment arena, MSD Capital has invested in companies that are helping to build next-generation telecommunications networks, create Internet infrastructure, use technology to streamline supply chains, reduce the cost of transactions or otherwise make businesses more efficient. More information about MSD Capital can be found at www.msdcapital.com.