July 14, 2003
Native Networks raises $11.5 million in third-round funding
Infinity and JVP lead third round of financing for Native Networks, raising
$11.5 million

Maidenhead, UK: July 14, 2003: Native Networks completed a third round of financing, raising a further $11.5 million. Leading the round were venture capital firms Infinity and JVP. Other existing investors taking part in the round were Alta Berkeley Venture Partners, Anschutz Investment Company, Apax Partners, Delta Capital Investments, Israel Seed Partners, SkyPoint Capital Corporation, and Soros Private Equity Partners.

Native Networks offers flexible and efficient Metro Ethernet services over existing and planned fiber infrastructure. Native Networks provides advanced carrier-class connectivity platforms, designed for deployment in "first-mile" metro access infrastructure. These platforms transport and aggregate Metro Ethernet packets alongside legacy circuits/TDM services in their "Native" form over existing SDH/SONET infrastructure, in a transition-friendly solution. Native Networks' solutions enable carriers and service providers to increase differentiation and profitability by delivering a service bundle, including advanced layer-2 Metro Ethernet services such as Virtual Private LAN Service (VPLS).

Founded in 1999, by Gilad Goren and Menahem Kaplan, Native Networks raised a total of $28 million in its first two financing rounds. Native is targeting established carriers through its OEM strategies by partnering with leading vendors worldwide. In February this year Native announced it's first OEM partnership with Alcatel Telecom.

Commenting on the funding round, Rami Hadar Native Network's CEO said:" The successful conclusion of the round was enabled by a combination of leadership demonstrated by JVP, Infinity and the strong support of our series A and B Investors. Native Networks now has the runway to ramp up revenues based upon its joint product with Alcatel and in parallel complete the development of its Next Generation Add Drop Multiplexer the EMX3600 series". He went on to add "Ethernet is becoming ubiquitous, SONET/SDH infrastructure is immortal, and Native bridges the gap by enabling an evolutionary upgrade of existing infrastructure to allow carrier-class Ethernet delivery in Metro networks. Our products enable value added services such as Virtual Private LAN Services, Video Distribution and emerging storage-over-IP services"

Avishai Silvershatz, managing partner at Infinity, which co-led the current financing round said "We chose to invest in Native Networks because we found a mature company with a product that meets the requirements of the market, strong management and sound relationships with leading manufacturers worldwide. Native Networks operates in a market segment, which is now showing signs of a revival after the battering that so many players in the communications market have taken in recent years. We believe that Native has a good chance of boosting its sales to tens of millions of dollars a year in the near future and that this, together with continued building of relationships with strong market players make it a highly attractive investment."

"In an environment where communications companies continue to struggle for survival, Native Networks has developed a cost-effective platform that addresses carriers' immediate needs," said Laurel Bowden, general partner at JVP. "Native's technology allows incumbent carriers to migrate their existing infrastructure from voice to data enabling them to create Virtual Private Networks without needing to build a new data infrastructure."

About Native Networks

Native Networks' - The Metro Ethernet Access Company's innovative solutions enable carriers to offer differentiated Metro Ethernet services, more flexibly and efficiently over existing and planned infrastructure. These advanced carrier-class connectivity solutions, designed for deployment in "first-mile" metro access infrastructure, transport and aggregate Metro Ethernet packets alongside legacy circuits/TDM services in their "Native" form over dark fiber, existing SDH/SONET infrastructure or DWDM, in a transition-friendly solution. They enable carriers and service providers to
increase differentiation and profitability by delivering a service bundle, which includes advanced layer-2 Metro Ethernet services such as Virtual Private LAN Service (VPLS). The technology is founded on an advanced, patent-pending multiplexing scheme and unique traffic management technology to provide optimal use of optical or SDH/SONET infrastructure with guaranteed QoS per customer and the ability to engineer to strict SLAs. Native Networks has developed a unique family of intelligent, data-aware Metro Ethernet solutions: including the EMX3600 series of Add/Drop
statistical Multiplexers.

The company is headquartered in Maidenhead, UK and retains extensive research and development facilities in Petah Tikva, Israel.

Further information about Native Networks can be found at http://www.nativenetworks.com/

About JVP

JVP is a leading international venture capital firm focusing on investments in early stage companies in the enterprise software & networking, semiconductors & components and communications & mobile infrastructure sectors. With over $670 million under management, and offices in NY, London, Jerusalem and Tokyo, JVP leverages its international presence, vast expertise and substantial capital base to build companies with the potential to shape and dominate global markets. Through thirteen successful exits including Chromatis (acquired by Lucent Technologies), Precise Software Solutions (acquired by Veritas), Netro (NTRO), T.sqware (acquired by Globespan), Scorpio Communications (acquired by US Robotics) and Fundtech (FNDT), JVP continues to attract top tier institutional and strategic investors worldwide. To learn more about JVP, visit: www.jvpvc.com

About Infinity

Infinity manages around $200 million in funds for investment. Last year it invested in the start ups, BrainsGate and Iomai, and is on the verge of completing several more investments.

At the beginning of 2003, Infinity took over the private venture holdings of the Clal Industries Group. The new portfolio includes around 25 companies out of which the most prominent are Saifun Semiconductors, Magink, Smartlink and Nanomotion.

Infinity was founded in 1997, to continue the activities of the Nitzanim Fund (originally formed in early 1994). The principal investors in Infinity are the founders of Nitzanim, the Rind/Butler Group, Clal Industries, GE Asset Management, American investment bank Friedman Billings Ramsey (FBR) and Banque Nationale de Paris of France.

The fund is managed in Israel by Amir Gal Or, Avishai Silvershatz and Robert Bash with Marshall Butler and Ken Rind heading up the management team in the U.S. To date Infinity has invested in around 50 start-ups among them DealTime, Shellcase, Galil Medical, Proneuron Biotechnologies, Orsus, Aprion Digital and VisionCare Opthalmic Technologies.

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