RADLAN Secures $30 Million in Second Round of Financing from Polaris Ventures and August Capital; RADLAN Gains Momentum in Fast Growing Data/Telecom Router Market.

Business Editors

CUPERTINO, Calif. & TEL AVIV, Israel--(BUSINESS WIRE)--Dec. 11, 2000

RADLAN Computer Communications (www.RADLAN.com), a leading provider of innovative routing software technologies, today announced it has secured $30 million in its second round of funding.

Polaris Venture Capital, the largest venture capital (VC) fund in Israel, and Silicon Valley-based August Capital led the investment. Other investors include HarbourVest Partners, Formula Ventures, UBS Investment Bank and other strategic investors. The funds will be used to expand RADLAN's marketing programs, to accelerate product development and to continue operational expansion in the U.S. and globally.

"We are pleased to have closed our second round with such a high-caliber group of investors," stated Jacob Zankel, president and CEO of RADLAN. "Our investment partners have clearly validated the size of the market opportunity, RADLAN's emerging leadership position in advanced router software technologies and the attractiveness of our business model."

RADLAN, founded in late 1998, has offices in the Silicon Valley and Boston and is headquartered in Tel Aviv, where it employs a team of 80 full-time seasoned engineers with world-class router expertise. During the year 2000, RADLAN successfully secured over $20 million in signed contracts with worldwide data and telecommunications (telecom) market leaders. RADLAN has also signed partnership agreements with the two leading providers of broadband communications and integrated circuits -- Broadcom Corporation and Galileo Technology (NASDAQ:GALT), which was recently acquired by Marvell Technology. Integrating routing software and silicon guarantees fast development and release of customers' data and telecom systems.

"Radlan is the first company to provide a sophisticated routing solution to meet the telecom market's demand, while creating added value for ASIC manufacturers," said Rami Beracha, managing partner for PolarisVenture Capital. "RADLAN offers an ideal solution for the rising market."

RADLAN provides a vital source of intellectual property for advanced and innovative functions in networking and routing for both component and system levels via core hardware and software technologies. RADLAN is the only vendor with system know-how that delivers integrated routing technologies with Layer 2/3/4 and 5 chips enabling its partners to design feature-rich, cost-effective networking solutions with a time-to-market advantage -- effectively cutting system design and software integration by 70 percent to 80 percent.

"RADLAN is the emerging player in the growing data-networking switching software and hardware market, with opportunities for tremendous growth," said John Johnston, partner, August Capital.

RADLAN's flagship product is the Routing Operating System (ROS(TM)), a portable networking software package that works in conjunction with Layer 2/3/4 switching silicon and network processors, which can be adapted to any ASIC. Although each part of the ROS is independent, portable and non-propriety, it can easily be integrated into any chip, CPU and operating system.

About Polaris Ventures

Polaris Venture Capital (www.polarisvc.com) is a leading venture capital company with over $700 million under management investing in Israel-related companies. Polaris specializes in creating long-term partnerships with seed to late-stage portfolio companies. It primarily invests in the dynamic high-growth sectors of communications, Internet software infrastructures, cellular applications and infrastructures and medical devices. The Polaris managers have succeeded in taking an array of companies from the start-up stage to full-grown success. Among them are Audiocodes, Radware, Card Guard, Chromatis and Backweb.

About August Capital

Founded in 1995, August Capital (www.augustcap.com) is a leading information technology venture capital firm that invests in entrepreneurial teams throughout the information technology market spectrum. With more than 50 years of combined venture capital experience and dozens of successful initial public offerings (IPOs) and public company board relationships, August Capital partners have financed technology companies with an aggregate market capitalization of more than one-half trillion dollars.

About RADLAN

RADLAN Computer Communications provides a vital source of intellectual property for advanced networking and routing software for both the component and the system levels via core software technologies. RADLAN is the only vendor with system know-how that delivers integrated core routing technologies with Layer 2/3/4 and 5 chips to be implemented into datacom and telecommunication vendors' boxes enabling its partners to design feature-rich, cost-effective routing solutions with the best time-to-market. RADLAN benefits from more than a decade of experience in design, development and manufacturing of advanced routing and switching technologies. RADLAN is a member of the multi-billion dollar RAD Group of companies with headquarters in Tel Aviv and Cupertino. For more information on RADLAN, visit the company's Web site at www.radlan.com or contact RADLAN at (U.S. 408/996-2121), (Israel +972/3-645-8531) or e-mail [e-mail].

Included in this release are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Although the company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations reflected in such forward-looking statements will prove to have been correct. The company's actual results could differ materially from those anticipated in the forward-looking statements as a result of certain factors including sales levels, distribution and competition trends and other market factors.

Editor's Note: RADLAN and ROS are registered trademarks of RADLAN Computer Communications. All other trademarks are the property of their respective holders.