Carnegie Learning's First Round of Investment Complete.

Business Editors & High Tech Writers

PITTSBURGH--(BUSINESS WIRE)--Jan. 18, 2000

Carnegie Learning, Inc., announced that it has raised $6 million in equity funding, led by Collier Investments, Ltd. Other investors include Core Learning Group, LLC, Pittsburgh-based Draper Triangle Venture Fund LP and Silicon Valley-based New Schools Venture Fund.

Founded in 1998, Carnegie Learning is the first company to develop a proven, integrated print and software curriculum that increases mathematics test scores by uniting students, teachers and Cognitive Tutor(TM) software. Carnegie Learning is a spin-off of Carnegie Mellon University and began as a research project headed by John Anderson, Professor of Cognitive Psychology and Computer Science. Carnegie Mellon has retained a significant ownership stake in Carnegie Learning.

"The support of these four partners offers distinct strategic advantages to Carnegie Learning. Each of the investors will serve as active advisors on the Company's board of directors," Bob Longo, Carnegie Learning President and CEO, said.

Silicon Valley interest is represented by support from the New Schools Venture Fund, a newly formed fund led by John Doerr and Brook Byers, Kleiner Perkens Caufield & Byers venture capitalists who have backed companies including Intuit (INTU), Netscape, Sun Microsystems (SUNW), and Amazon.com (AMZM). Adding further dimension to the funding structure is Draper Triangle Venture Fund, a Pittsburgh fund that is affiliated with the California-based venture capital firm Draper Fisher Jurvetson, which has backed companies such as Hotmail, eFax.com (EFAX), and Four11.

"This diverse group of supporters validates the 15 years of research and 10 years of field testing behind our technology-based curriculum that is teaching kids to learn," Longo said.

Tom Flood, CEO of Naples, Fl.-based Collier Investments, said that proprietary technology developed by Carnegie Mellon, coupled with an experienced management team, made Carnegie Learning an attractive investment. "Lots of money has been spent installing computer hardware in our schools, but it doesn't seem that enough attention has been paid to the development of software that actually helps teachers to teach and kids to learn. Carnegie Mellon has been working on this issue for more than 15 years, and we think Carnegie Learning represents a giant step in the right direction."

Core Learning Group, founded in 1998 by San Francisco-based SPO Partners & Co. and led by co-CEOs Susan Harman and Barbara Kurshan, made Carnegie Learning its first investment. "We have set a goal at Core Learning of bridging the best of traditional approaches in education with field-tested research and technology. We believe Carnegie Learning meets that goal," said Harman.

Kim Smith, founding President of New Schools Venture Fund, commented, "New Schools is improving K-12 education by supporting a growing community of education entrepreneurs. We plan to invest in 10 to 20 of the most promising, scalable education ventures in the country and we believe that Carnegie Learning is one of these."

As a Pittsburgh-based company, Carnegie Learning will benefit from local support provided by Draper Triangle Venture Fund, a Pittsburgh fund co-managed by Triangle Capital and Draper Fisher Jurvetson. "Carnegie Learning is one of our most impressive homegrown technology companies," said Jay Katarincic, principal with Draper Triangle. "It's important to have local support for such an exciting venture," he added. The fund's strategic partner is PNC Equity Management. Its limited partners include Mellon Ventures, National City Ventures, The Pennsylvania State Employees Retirement System and several other prominent organizations and individuals. Principals Don Jones and Jay Katarincic bring extensive expertise in Internet business to the fund.

Mark Coticchia, director of technology transfer at Carnegie Mellon, said, "We have helped Carnegie Learning grow from a research project to a curriculum making significant strides with kids, to a company that is one of our region's major technology players. Today's news about Carnegie Learning is an excellent addition to the university's tech transfer tradition, which includes companies such as Lycos (LCOS)."

"This is a very exciting time for Carnegie Learning," Bob Longo said. "The fact that four savvy investors have decided to participate in this first round is a terrific show of confidence in our business proposition, our products, and our team. They are all committed to making a measurable difference to learning in the United States," he added.

About Carnegie Learning

Carnegie Learning, Inc. is the only results-based, educational technology company that develops and markets Cognitive Tutor curricula that enable "learning by doing" through real-world problem solving. Unlike supplemental educational software, Carnegie Learning's Cognitive Tutor curricula are the first comprehensive curricula for algebra and geometry that unite students, teachers, technology and text into results-based curricula built around personalized learning (cognitive) models. In addition, the program's highly sophisticated intelligent tutoring system allows for a student to use multiple problem solving strategies and provides several levels of "just in time" instruction to assist them in achieving a successful result.

The company's first products, Cognitive Tutor Algebra I, Geometry and Algebra II, are supported by 15 years of research and are targeted for students in middle school through four-year colleges. Schools and teachers across the country have already embraced the highly inclusive math programs, used in more than 150 public and private schools from Alaska to Florida. The United States Department of Education recently selected the Cognitive Tutor Algebra I program as one of five "exemplary" curricula.