Optranet Secures $6.7 Million in Venture Funding to Develop Optical Access Equipment for the Emerging MTU Market.

Business Editors/High-Tech Writers

PLEASANTON, Calif.--(BUSINESS WIRE)--Sept. 13, 2000

Seasoned Industry Executives from Redback Networks, 3Com and

Tut Systems Launch MTU Equipment Company

to Globally Network Office Buildings

Optranet, developers of the first end-to-end access equipment designed to enable differentiated, broadband IP services, today announced it closed an initial financing of $6.7 million led by Norwest Venture Partners. Optranet's initial focus for the equipment will be on the commercial multiple tenant units (MTU) market. The company's innovative solution will allow service providers to light up an estimated 10 million miles of existing in-building telephone lines with Ethernet and IP-based broadband services. Recognizing a domestic market opportunity of $2 billion in the MTU market alone and an experienced management team, Norwest funded the round overnight.

"Optranet is initially targeting a largely untapped segment of the networking market and is the first company to design networking equipment specifically for nearly 70 percent of businesses worldwide that reside in MTUs," said Promod Haque, managing partner, Norwest Venture Partners. "Norwest identified a great opportunity in Optranet with its seasoned management team poised to make a huge impact on the market with specialized technology."

"The U.S. market for MTU equipment and services will top $2 billion by 2004," said Mike Wolf, analyst for Cahners In-Stat. "Sixty percent of all businesses in the U.S. are located in MTU facilities and the North American market is not unusual in its MTU concentration. In Europe and the Pacific Rim, as many as 70 percent of all businesses reside in Multi-Tenant facilities."

Optranet's executive management team is comprised of seasoned industry executives from established enterprise networking companies including Redback Networks, Tut Systems and 3Com Corporation. Optranet CEO Darrell Scherbarth is the former vice president of Engineering at Redback Networks and led the rollout of Redback's flagship subscriber management systems. System architect Chris Thomson was a system architect for 3Com's Enterprise WAN Division, and headed the architectural definition and implementation of three generations of enterprise LAN/WAN routers. Craig Stouffer, Optranet's vice president of Marketing was the vice president of Marketing at Tut Systems and led the marketing efforts for Tut's launch of its network access products for the residential MDU market. The Optranet executive team recently expanded to include Dave Lowry, who directed Cisco's IOS WAN efforts, as director of Software, Gihad Ghaibeh, who led the VDSL and HomePNA development efforts at Tut Systems, as director of Hardware and J. Craig Easley, who led the Optivity NMS marketing efforts at Nortel, as director of Product Management.

The funding will be used to develop Optranet's end-to-end optical access equipment designed for service providers deploying converged IP-based broadband networks. Although applicable to a wide range of broadband services, Optranet's products will initially be aimed toward Internet Service Providers (ISPs) and Competitive Local Exchange Carriers (CLECs) developing services for the MTU market, comprised of 118,000 businesses in the United States alone.

"The investment by Norwest Venture Partners gives us the momentum to move into the growing market of MTUs," said Darrell Scherbarth, chief executive officer of Optranet. "By initially developing a product line specifically for the MTU market, Optranet stands alone in enabling building-centric ISPs and CLECs, to deliver differentiated IP-based services to their MTU customers worldwide."

About Norwest Venture Partners

Norwest Venture Partners, founded in 1961, is the premier venture capital business partner for emerging growth IT companies. The firm actively manages $850 million in investments and has raised more than $1,400 million since inception. Norwest Venture Partners has a broad information technology investment focus, including software and the Internet, data communications, telecommunications, semiconductors and subscriber-based services. The firm prides itself on supporting companies beyond the call of duty with the reputation, financial resources, seasoned business experience and network of relationships required for success. The firm has invested in such market leaders as Annuncio Software, Cerent Corporation (acquired by Cisco Systems (Nasdaq:CSCO)), Corio (Nasdaq:CRIO), Extreme Networks (Nasdaq:EXTR), OnDisplay Inc. (acquired by Vignette, (Nasdaq:VIGN)), Siara Systems (acquired by Redback Networks Inc., (Nasdaq:RBAK)) and Verio (Nasdaq:VRIO). Information on Norwest Venture Partners is available on the Internet at www.norwestvp.com or by calling 650/321-8000.

About Optranet

Founded in January of 2000, Optranet develops innovative products for Service Providers addressing the MTU broadband access market. The Optranet product line will enable the delivery of differentiated, broadband services at 10 to 100 times higher performance than today's broadband access solutions while leveraging a simple, "Ethernet-everywhere" service provisioning model. Additional Optranet information is available at: www.optranet.com.