Network Optimization Leader Expand Networks Announces $25 Million in Financing.

Business/Technology Editors

ROSELAND, N.J.--(BUSINESS WIRE)--Oct. 11, 2000

Weiss Peck & Greer, America Online and Comcast Interactive Capital

Invest in Enterprise Caching Technology Pioneer

Expand Networks, a new leader in optimizing enterprise network performance, today announced that it has secured $25-million in third-round financing from several top communications and Internet companies, investment banks and venture capital firms. Expand Networks is the pioneer of the innovative Enterprise Caching Technology solution and the ACCLERATOR suite of products, which have helped companies realize over 400 per cent improvement to network performance.

Participating in this round of financing are the investment fund of Weiss Peck & Greer, America Online, Inc., and Comcast Interactive Capital. Other new investors include the Kaufman Fund, the investment bank Dain Rauscher Wessels, West Coast venture capital firm Pioneer Internet Fund as well as the Israeli-based VCs Challenge and Tamir Fishman. Current investors, including Kentech Ventures, Ophirtech Investors, Eurocom Holdings, and the Emicom Group have also invested in this round.

"We have developed a suite of world class products designed to address one of the most pressing issues of the Internet economy--bandwidth constraint. In a study conducted by the Tolly Group, the ACCLERATORs outperformed competitive technology from networking giant Cisco. The robustness of the Enterprise Caching technology coupled with this funding will allow us to quickly move forward with our strategic growth plan," said Zohar Pearl, CEO of Expand Networks.

"This round of financing, from some of the top players in the Internet economy, is a clear vote of confidence in Expand Networks and our suite of ACCELERATOR products," said Talmon Marco, Co-founder and President of Expand Networks. "Our sales to leading organizations like Texas Instruments and the Department of Defense validate that Enterprise Caching as a method of maximizing network performance is being embraced by the market."

"We see great potential for Expand Networks' technology," said Ron Peele, Vice President, AOL Investments. "Network capacity is a constant challenge for businesses and Expand's technology offers companies a way to significantly improve performance from their existing networks without investing in costly new infrastructure."

Dr. Raj Mehra, a Managing Director with venture capital firm Weiss Peck & Greer, noted that Expand Networks has an aggressive sales strategy and has already achieved a network of more than 40 VARs worldwide. "Through its direct sales channel, Expand Networks has penetrated an impressive number of FORTUNE 500 companies. With the recent introduction of its Frame Relay product offering and the combination of its stellar direct and indirect sales channels, Expand Networks is well positioned to rapidly increase its global market presence."

Samuel Schwartz, Managing Director of Comcast Interactive Capital, commented, "Expand Networks' growing management team has displayed a firm understanding of both the technology and its role in the market. This expertise is a critical element for rapidly developing the company's customer base."

Expand Networks' Enterprise Caching solution has already been deployed by FORTUNE 1000 corporations and major government agencies. This technology is the result of three underlying algorithms: Selective Caching; Vertical Data Analysis and Adaptive Packet Compression. Enterprise Caching analyzes data in all levels of the protocol stack. It applies Vertical Data Analysis for "header optimization" and Selective Caching for the caching of repeatedly transmitted data such as HTML, JavaScript, Citrix, and SQL. Adaptive Packet Compression applies compression algorithms for the acceleration of data that is not part of the header or data that has not been cached.

Expand Networks' United States headquarters is in Roseland, New Jersey with employees also situated in a number of locations in the U.S. and Europe. The Research & Development center is in the Company's International headquarters in Tel Aviv, Israel.

About Expand Networks

Expand Networks' (a)Enterprise Caching solution provides broadband-level performance that protects and optimizes existing network infrastructure investments. Through its ability to cache enterprise networks, Expand Networks extends the performance benefits of caching beyond Web traffic to all enterprise data. The result is 100- 400+ percent network performance increase that supports the deployment of bandwidth-intensive applications such as ERP, CRM, Thin Client and Web Applications (visit www.tolly.com for unbiased third party testing by the Tolly Group). For more information about Expand Networks, please visit our Web site at www.expand.com, or call [phone].

Expand Networks, ACCELERATOR 4000, ACCELERATOR 2700, and Expand-OS 3.0 are trademarks of Expand Networks, Inc. All other trademarks are the property of their respective owners.

(a) 2 patents approved, 4 patents pending approval