Blue Nile Closes Funding Round With Investment by Vulcan Ventures Inc.

Business Editors, High-Tech Writers

SEATTLE--(BUSINESS WIRE)--April 19, 2000

Blue Nile, Inc., the leading online retailer of diamonds and fine jewelry, today announced the closing of a funding round led by Vulcan Ventures Inc., the investment organization of Paul G. Allen.

Blue Nile's other principal investors also participated in this round, including: Bessemer Venture Partners; Trinity Ventures; Kleiner Perkins Caufield & Byers (KPCB); Weiss, Peck & Greer Venture Partners, and Integral Capital Partners. The proceeds of this round will be used to launch additional product lines and to enhance Blue Nile's brand image as the Web's premier site for purchasing diamonds and fine jewelry.

"Vulcan Ventures is pleased to have Blue Nile join the innovative online retailers in our portfolio," said William D. Savoy, president of Vulcan Ventures.

"We are delighted to welcome Paul Allen's highly respected firm, Vulcan Ventures, as an investor in our company," said Mark Vadon, chief executive officer of Blue Nile. "We are pleased to have the support of a prestigious group of investors who share our vision and embrace our efforts in building a powerful brand and providing an exceptional customer experience. Blue Nile has experienced incredible growth by focusing on consumer needs and providing high quality products and customer service, and this funding supports our continued growth."

About Vulcan Ventures Inc.

Vulcan Ventures Inc. of Bellevue, Washington was founded by Paul G. Allen in 1986 to research and implement his investments. Through Vulcan Ventures, Allen invests in companies which offer products, services or technologies that fit his Wired World strategy and can contribute to or benefit from the technology and strategy of other companies within the group's extensive investment portfolio. In addition, the group owns Charter Communications, the fourth largest cable operating company in the United States with more than 6 million subscribers. Recent investments include those in innovative content (e.g. Oxygen Media, ZDTV), Internet and e-commerce (e.g. Drugstore.com, eGreetings, Go2Net, Priceline.com, Stamps.com), telecommunications (e.g. Allegiance Telecom, High Speed Access, InterNAP, NorthPoint Communications) and consumer device and service companies (e.g. Replay Networks, TiVo, and Wink Communications). William D. Savoy is president of Vulcan Ventures and represents Allen in his professional and personal financial transactions as well as manages the Vulcan investment analysts who investigate and secure investment opportunities. Allen remains chairman of Vulcan. For more information on Vulcan visit www.paulallen.com.

About Bessemer Venture Partners

Bessemer Venture Partners is a private venture capital firm that invests in entrepreneurial companies at any stage. The firm has offices in Menlo Park, Calif., and Wellesley Hills, Mass. With over 100 years of collective venture capital experience, BVP investors have assisted with virtually every aspect of growing successful enterprises. Thirty-two of its portfolio companies have enjoyed initial public offerings since 1991. E-commerce and Internet investments have included Etoys, BabyCenter, Furniture.com, Gloss.com, Flycast, Mothernature.com, and Mindspring.

About Trinity Ventures

Menlo Park, Calif., based Trinity Ventures is a privately held, professionally managed venture capital firm with over $300 million in committed capital. Since its founding in 1986, Trinity has invested in more than 80 early-stage companies in e-commerce, software and hardware, including Babycenter, GolfWeb, NextCard, 800.com, Fatbrain.com, Extreme Networks, Starbucks and Quokka.

About KPCB

Founded in 1972 and based in Palo Alto, Calif., KPCB is one of the world's most prestigious venture capital firms. KPCB has invested over $1.3 billion in 250 technology ventures in the United States. These new companies have created over 195,000 jobs with sales over $73 billion. The market capitalization of these companies exceeds a quarter of a trillion dollars. KPCB investments have included such leading e-commerce companies as Amazon.com, Della & James, drugstore.com, HomeGrocer.com, Homestore.com, NextCard, Wineshopper.com, as well as Internet leaders AOL, Netscape and Excite@Home.

About Integral Capital Partners

Founded in 1991, Integral Capital Partners (http://www.kpcb.com/team/integral.html) is a family of investment partnerships created by portfolio managers Roger McNamee and John Powell in collaboration with the venture capital firm Kleiner Perkins Caufield & Byers (KPCB) and the investment bank Morgan Stanley Dean Witter. Integral pioneered the crossover style of investing that combines expansion stage venture and growth stage public companies in a single pool.

About Blue Nile

Blue Nile, located on the Web at www.bluenile.com, is the leading online retailer of diamonds and fine jewelry. The company provides consumers with in-depth education and guidance about buying diamonds and classically styled jewelry, and offers an exceptional collection, selected according to high standards of quality, beauty and value. Blue Nile offers rich content and education for first time buyers, who can use the Blue Nile Buyer's Guide to learn the four "Cs" -- cut, color, clarity, and carat weight. With this knowledge, Blue Nile allows customers to confidently make non-pressured, informed purchases. Independent testing labs grade each diamond, and all jewelry is backed by an appraisal and 30-day return policy.

Founded on a philosophy of exceptional customer service, Blue Nile combines 100 years of jewelry trade expertise with a clean, elegant shopping environment. Based in Seattle, Wash., Blue Nile is privately held with investments from Bessemer Venture Partners; Trinity Ventures; Kleiner, Perkins, Caufield & Byers; Integral Capital Partners; Weiss, Peck & Greer Venture Partners; Vulcan Ventures Inc.; and Comdisco Ventures. The company can be reached by phone at 800/242-2728.