Ellacoya Networks Raises $52 Million in Second Round Venture Funding.

Business/Technology Editors

MERRIMACK, N.H.--(BUSINESS WIRE)--Dec. 4, 2000

Goldman Sachs leads top-tier firms to support early entry into the

emerging Intelligent Services Provisioning market

Ellacoya Networks(TM), Inc., an innovative company developing next generation data communications equipment for the emerging Intelligent Services Provisioning market, today announced it has raised second-round venture funding of over $52 million, bringing total investment to more than $86 million. The round is led by funds affiliated with Goldman, Sachs & Co. with existing investors from top-tier venture capital firms Lightspeed Venture Partners, Bessemer Venture Partners, Centennial Ventures and Lighthouse Capital Partners making additional investments.

The new funding will be used for continued development, marketing and sales of the company's Service Generation System(TM): a carrier-class solution, comprised of multiple software engines and hardware switching platforms, that simplifies network operations while enabling the delivery of new broadband application and content services. The system leverages the optical/broadband build-out by enabling service providers and carriers to move beyond rapidly commoditizing network access and transport services to a rich set of value driven content and application services.

"As one of the early architects of the Intelligent Services Network, Ellacoya Networks, with differentiated technology and a strong management team, is enabling powerful new business models for service providers," said Joe DiSabato of Goldman Sachs. "We believe this service network harnesses the power of the optical build-out and opens an opportunity in the service provider equipment arena."

The Service Generation System uses a standards-based directory to employ intelligence at the service edge of carrier and service provider networks. It is the industry's first broadband solution to integrate world-class switching platforms, feature-rich application management software, scalable directory services and dynamic portal environments.

The system brings efficiencies to managing subscribers, aggregating broadband IP traffic and deploying network IP services by combining innovative, flexible software functionality with high performance, next generation hardware platforms. In addition, the Service Generation System provides today the only complete solution for enabling automated, personalized content and application services - from dynamically building a personalized Web portal and service selection, through service provisioning and delivery.

"We are pleased to add one of the world's most highly regarded financial institutions to our investor team and view their involvement as validation of Ellacoya Networks' approach to enabling the delivery of highly personalized content and applications. This investment round allows us to continue our aggressive product development and entry into the broadband service equipment market," said Kurt Dobbins, president and founder of Ellacoya Networks. "The optical build-out has generated demand for high bandwidth content and predicated a new service model where personalized content and applications must seamlessly, and automatically, be delivered via simple point-and-click interfaces. We are well-positioned with both our technology and proven team to advance this vision."

About Ellacoya Networks

Ellacoya Networks is an innovative technology company building scalable broadband service platforms for service provider and carrier markets in the New Service Economy. As the first-mover into The Intelligent Services Provisioning market, Ellacoya is creating software-rich equipment platforms which harness the optical bandwidth build-out by enabling the delivery of value added broadband application and content services through its Service Generation System.(TM) Recognized as one of the most promising telecommunications start-ups in 2000 by Telecommunications Magazine, the company is privately held and headquartered in Merrimack, New Hampshire. Ellacoya Networks is helping service providers add value to bandwidth by providing a higher layer, intelligent service environment capable of delivering individualized applications and services. For more information contact us at [phone], or visit us at www.ellacoya.com.

Ellacoya Networks and Service Generation System are trademarks of Ellacoya Networks, Inc.