CopperGate Secures $14.5 Million in Third Round Led by Carmel Ventures; Leading Supplier of Chips for IP-Based Multimedia Home Networking to Apply Funds for Global Expansion, Customer Support and New Product Development.

TEL AVIV, Israel, NEWARK, Calif. & TOKYO -- CopperGate Communications, a leading supplier of chipset solutions for multimedia home networking, announced today that it reached an agreement to raise approximately $14.5 million in a third round of financing led by new investor Carmel Ventures, with the participation of existing investors Tamir Fishman Ventures and the Challenge Fund. This financing will be used to accelerate the Company's expansion into international markets as well as to grow its product development and customer support capacity. As part of the financing, Carmel Ventures' General Partners, Ori Bendori, who led the investment on behalf of Carmel, and Shlomo Dovrat, will be joining CopperGate's Board of Directors.

"As the telecommunications industry undergoes a rapid transformation given increased competition in delivering 'Triple Play' services, CopperGate's in-home distribution solution is a critical factor in enabling service providers to successfully roll out new multimedia entertainment services to the Digital Home," said Ori Bendori, General Partner of Carmel Ventures. "With CopperGate's solutions, millions of consumers will be enjoying a new, personalized and interactive TV experience."

"CopperGate has developed one of the most innovative and exciting opportunities in the communications landscape in years - the Digital Home," said Shai Saul, Chairman of CopperGate's Board of Directors and Managing General Partner of Tamir Fishman Ventures. "CopperGate's solutions empower 'Triple Play' players to provide a new breed of multimedia services to the consumer through a high-quality and vastly-enhanced interactive user experience. This is about to change the way we watch TV and consume digital content as much as it will impact the way we interact with each other. It will further provide consumers with more alternatives and competitive prices. It is exciting to play a role in this revolution."

CopperGate's CEO, Gabi Hilevitz added, "We are delighted to have Carmel Ventures join our existing investors Tamir Fishman Ventures and the Challenge Fund. As the prime contributor to the worldwide accepted standard - HPNA V3 for high performance multimedia home phoneline networking - we see growing interest in our technology and products from service providers. CopperGate has the right technology, an excellent team and with this new funding, I believe we will continue to see the expanding adoption of our breakthrough solutions."

Founded in 2000, CopperGate addresses the emerging IPTV market with its home networking distribution technology. CopperGate is the pioneer and sole provider of the HPNA V3 standard chipsets, which utilize existing coax cables and telephony wiring in the home. Given the increased competition to offer "Triple Play" services, leading Telco and Satellite TV operators as well as large system and equipment vendors have adopted CopperGate's solutions, which have already been integrated into a multitude of connectivity-requiring residential devices such as residential gateways, TV set-top boxes, personal video recorders (PVRs) and PC peripherals.

About Carmel Ventures

Founded in 2000 by pioneers and leaders of the Israeli high tech industry, Carmel Ventures is one of Israel's leading IT focused funds with $372 million under management. Led by former entrepreneurs and executives of the software, communications and investment industries, Carmel provides active, hands-on support to its Israeli, European and US portfolio of companies. Carmel, headquartered in Herzliya, Israel enjoys a worldwide network of industry, strategic and investment resources. Carmel provides significant capital and support through the growth cycle of its portfolio companies and is recognized as a true company building fund in Israel. For more information, please visit www.carmelventures.com.

About Tamir Fishman Ventures

Tamir Fishman Ventures is a leading Israeli venture capital group committed to building next generation innovative Israeli and Israel-related technology companies through value-added partnerships. Tamir Fishman Ventures invests primarily in early stage companies operating in the communications, information technology and life sciences segments. For more information visit Tamir Fishman's website at www.tamirfishman.com.

About The Challenge Fund - Etgar L.P.

The Challenge Funds are two Delaware limited partnerships focused on equity investments in Israel-related privately held and publicly traded companies. The Funds seek to invest in companies with superior management teams and unique technologies in rapidly growing markets. The Funds invest in all spheres of the Israeli economy including the high-tech sector and related areas as well as traditional industries. The Funds' policy is to work closely with portfolio companies in order to build highly successful enterprises. Investors in the Challenge Funds include a highly distinguished group of American and European investors. For more information visit The Challenge Funds' website at www.challenge.co.il.

About CopperGate

CopperGate Communications develops chipsets designed to revolutionize home networking, providing the only currently available standards-based technology for multimedia networking in the home over existing wires. CopperGate works with the world's leading system manufacturers to deliver the only products that operate over both phone lines and coax cables on a single network enabling consumers to conveniently connect equipment to broadband services throughout the home. CopperGate's products have been field tested and selected by leading service providers as key components for their triple play deployment solutions. Founded in 2000, CopperGate is headquartered in Tel Aviv, Israel, with offices in Newark, California, Taiwan and Tokyo. For more information, please visit www.copper-gate.com.

Reader Contact Information:

North American Office:

CopperGate Communications Inc., 39899 Balentine Drive, Suite 200, Newark, CA 94560, Tel: [phone], Fax: [phone], www.copper-gate.com.

Israel Office:

CopperGate Communications Ltd., 34 Habarzel Street, Tel Aviv 69710, Israel, Tel: [phone], Fax: [phone].

Japan Office:

CopperGate Communications Japan, 5F, Nisshin Bldg., 1-8-27 Konan, Minato-ku, Tokyo, Japan,

Tel: [phone], Fax: [phone].

CopperStream, CopperGate, CopperGate Communications, and the CopperGate Emblems are trademarks or registered trademarks of CopperGate in the U.S.A. and other countries. All other trademarks mentioned herein are believed to be trademarks of their respective owners.