CrossCommerce Completes $20 Million First Round of Financing With DLJ's Sprout Group, Nexus Group and Osprey Ventures.

Business Editors, High-Tech Writers

SAN FRANCISCO--(BUSINESS WIRE)--March 15, 2000

Industry's First E-Merchandising Service

Provider Transforming Content-Focused Sites

into Next-Generation Providers of Online Commerce

CrossCommerce, the industry's first e-Merchandising Service Provider, today announced it has completed a $20 million first round of financing co-led by The Sprout Group, the venture capital affiliate of Donaldson, Lufkin & Jenrette (DLJ), and Nexus Group.

Additional funding in this round is provided by Osprey Ventures. With today's announcement, Robert Finzi, General Partner of The Sprout Group and Dave Leyrer, co-founder and Principal of Nexus Group LLC have joined CrossCommerce's board of directors.

CrossCommerce is establishing the e-Merchandising Service Provider market by completely automating critical e-commerce business practices that include merchandising, product sourcing, transaction processing, fulfillment, and customer service. As a result, the CrossCommerce e-Merchandising Platform will enable content-focused sites to directly offer merchandise that can be integrated with their content down to the page level -- without giving up ownership of the customer relationship to an affiliate merchant. The CrossCommerce solution can be delivered at a fraction of the cost, time, and resources required by existing system integration approaches to developing a commerce-enabled site. To underscore the significance of the CrossCommerce solution, International Data Corporation has reported that the average cost of developing a commerce-enabled site is $5.9 million, and this typically takes between six months to a year to complete.

"CrossCommerce's e-merchandising strategy has the potential to transform content-centric sites into legitimate, next-generation providers of online commerce," said Carl Lehmann, Vice President of Electronic Business Strategies with META Group. "The company is concentrating on high-traffic, top-tier publishing, entertainment, community, and affinity sites. To continue their success, these content-focused sites must supplement their banner advertising and affiliate marketing programs. CrossCommerce adds value by offering these sites a 'commerce for content' approach, enabling them to realize transaction-based revenue through product sales without compromising their primary focus on providing compelling content."

The company is headed by CEO Peter Nordberg, former president of WebLogic, a Java application server company acquired by BEA Systems, Inc. (Nasdaq:BEAS) in 1998. The award-winning WebLogic product family of commerce and application servers, which represented 45% of BEA Systems' top line revenue as of December 1999, enables businesses to rapidly deploy highly adaptable e-commerce solutions with unparalleled scalability.

"CrossCommerce has a real first-mover advantage as the industry's first e-Merchandising Service Provider," said Robert Finzi of The Sprout Group. "The bottom line is that content-focused sites have to find a way to derive significant revenue from their subscriber traffic. If they don't, they're out of business. CrossCommerce is offering these sites a truly revolutionary commerce-enabling solution that not only will help them convert their traffic into meaningful revenue, but will do so without complex, costly, and time-consuming system integration."

"The market opportunity for the CrossCommerce solution is simply enormous," said Dave Leyrer of Nexus Group. "The company is targeting sites that collectively generate in excess of 100 billion Web page views a month. By fully automating the complete spectrum of front-end and back-end business practices required for online commerce, CrossCommerce's solution is enabling content-focused sites to become key providers of commerce that is tightly coupled with their content. This is going to create a fundamental shift in customer brand loyalty from online merchants to content-oriented sites. In a couple years, we fully expect the most profitable sites will be those that seamlessly integrate content and commerce."

Until now, content-focused sites have relied on banner advertising and affiliate marketing programs to "monetize" their traffic. However, as banner ad click-through rates continue a precipitous drop-off and the most successful affiliate marketing programs achieve only a two-percent browse-to-buy conversion rate, content-focused sites face increasing pressure to transform their enormous traffic into an ongoing source of revenue.

"We've been very deliberate in selecting our venture funding partners, not only for their track records in backing highly successful start-ups, but for their strategic relationships as well," said Peter Nordberg, CEO of CrossCommerce. "We're going to leverage this round of financing to make a major statement to the industry that CrossCommerce is changing the way online merchandising will be approached from now on."

About CrossCommerce

Formed in 1999 as the industry's first e-Merchandising Service Provider, CrossCommerce is transforming content-centric sites into next-generation providers of online commerce. The company enables these sites to quickly monetize their traffic and maintain direct ownership of the customer relationship without disrupting their primary focus on creating compelling content and services.

By providing a sophisticated Web-based application to access its e-Merchandising Platform, CrossCommerce automates core e-commerce business practices, which until now have required expertise in merchandising, product sourcing, transaction processing, fulfillment, and customer service. As a result, content, community, entertainment, and affinity sites can now offer targeted commerce to their audiences without complex, expensive, and lengthy system integration and product sourcing.

The company's co-founders -- Peter Nordberg, Raj Sarasa, and Jim Oliver -- are industry veterans with backgrounds from leading companies that include Sun Microsystems, WebLogic, Apple Computer, and Hewlett-Packard.

Privately held with blue-chip investors that include The Sprout Group, Nexus Group, and Osprey Ventures, CrossCommerce is headquartered in San Francisco, California. For more information, visit the company's Web site at www.crosscommerce.com or call 415/315-1000.

About the Investors

The Sprout Group is one of the oldest and largest sources of private equity capital for growing companies. Established in 1969 as a venture capital affiliate of Donaldson, Lufkin & Jenrette (DLJ), the company has managed 12 major investment partnerships totaling nearly $2 billion in committed capital. 26 investment professionals manage the company's most recent investment partnership: Sprout Capital VIII, an $860 million fund that makes early stage, growth, mezzanine, and buyout investments primarily in the datacom and telecom, e-commerce, software, e-health and life science product industries. Sprout is one of only two venture firms in the country affiliated with a leading investment bank. This unique relationship provides access to a broad spectrum of resources and complements the company's activities as a venture capital investor. Recent investments include Rhythms NetConnections Inc (Nasdaq:RTHM), Globespan (Nasdaq:GSPN), SDL (Nasdaq:SDLI), Torrent Networking Technologies, Avici Systems, Verifone, OmniSky Corporation, Captura Software, CheMatch.com, FEN, FogDog Sports (Nasdaq:FOGD), Quintus (Nasdaq:QNTS), MySimon, netLibrary.com, Skila, Spotfire, Cephalon (Nasdaq:CEPH), Lynx (Nasdaq:LYNX), Nanogen (Nasdaq:NGEN), Keravison (Nasdaq:KERA), among others.

Nexus Group LLC, founded in 1996, is a private technology multi-stage venture capital and investment firm based in San Francisco whose limited partners are exclusively technology industry entrepreneurs and executives. Nexus Group LLC serves as the General Partner of Nexus Capital Partners I, LP, Nexus Capital Partners II, LP and Porcelain Partners, LP. The former two are technology venture capital funds; the latter a public/private technology-oriented crossover hedge fund. Representative Nexus investments include PeoplePC, Object Switch, enCommerce, net.genesis, Commerce One (Nasdaq:CMRC), Phone.com (Nasdaq:PHCM), Asia Online, Service Metrics (acquired by Exodus Communications), Broad Daylight, and Evoke, among others.

Osprey Ventures, L.P. invests primarily in early- and expansion-stage companies in the business and consumer technology marketplaces. Osprey's investors include forty technology and Internet industry "insiders" including founders and executives of NBCi, Ariba, VerticalNet, eGain, Cisco Systems, Intel, Microsoft and more. This unique combination of investment strategists provide proprietary insights into market opportunities, management teams, products, and acquisition interests. Representative Osprey investments include BuyDirect (sold to Beyond.com), Productopia, Cybergold (Nasdaq:CGLD), and Internet Wire.

NOTE TO EDITORS: In the contact company name Dave Communications, LLC noted in this news release, there is an accent over the "e." This symbol may not appear properly in some systems.