Atlas Venture and Benchmark Capital announce £10.3 ($15) million funding for Nexagent

~ funding will be used to prepare the commercial launch of Nexagent's network peering architecture and collaborative commerce platform, and for
international expansion ~

Nexagent (formerly InterProvider) has secured £10.3 million in series A funding co-led by Atlas Venture and Benchmark Capital. Also investing in the round were Quester Capital, Lago Ventures and the angel investment network iGabriel.net.

Nexagent has already received an initial £6.3 million tranche of the series A funding and will receive a second tranche of £4 million once it has met specific performance milestones.

Nexagent, co-founded by Charlie Muirhead, who previously founded Orchestream (LSE:OCH), and Chris Gare, formally Director of Advanced Services at Cable & Wireless, has developed a network peering architecture and collaborative commerce platform for the telecommunications industry. Nexagent’s platform enables, for the first time, service providers and telecom carriers to work together to deliver cost-effective, performance guaranteed, managed IP services internationally to all their enterprise customers.

Today, enterprises of all sizes depend on Information Technology for many business critical processes and must create an IT infrastructure to deliver a wide range of applications (e.g. CRM, ERP, email, etc.) across multiple geographic sites, either internally or externally, with their trading partners, suppliers and customers. In order to deliver these applications in a constantly changing business environment, all enterprises are looking for cost effective, international Wide Area Network (WAN) connectivity between their geographic sites which is flexible, reliable and offers end-to-end visibility of service performance.

For voice services, it is possible to make a call to anywhere in the world reliably and cost effectively, regardless of which carriers the callers are connected to. This is only made possible through a standardised, open partnership model where all carriers leverage their respective networks by sharing the delivery of each call, and each getting paid for the usage of their network along the way. The regulation of the voice market forced the industry to adopt this model and it has taken over 20 years of research and development to deliver the seamless experience all customers expect today.

The data communications industry, on the other hand, has not been regulated, so carriers have not been forced to partner. Instead, on the back of forecasts of massive demand and cheap financing, nearly all elected to extend their own international capability through a combination of network build out, mergers and acquisitions and strategic alliances. Despite an estimated $600 billion of global investment, these solutions have not delivered a cost-effective international service with reliability, flexibility and end-to-end service performance visibility for all enterprise customers to all locations. Enterprises who have turned to the Internet for an answer have found that, while the Internet offers flexibility and international reach, it is not considered reliable for many business-critical and commercially-sensitive applications.

Recent research by Analysys (April 2002) revealed an estimated $7 billion untapped global opportunity in 2003, rising to $12 billion in 2006, from delivering WAN services with performances guarantees. This number excludes revenues from advanced services such as Voice over IP (VoIP).

Nexagent, identifying this untapped opportunity, has developed a network peering architecture and collaborative commerce platform which will make an open partnership-based solution (comparable to the model in the voice industry) available to the data communications industry. Nexagent’s platform enables, for the first time, service providers and telecom carriers to work together to deliver cost-effective, performance guaranteed, managed IP services internationally to all their enterprise customers.

The unveiling of Nexagent’s collaboration platform and services follows 18 months of intense research and development carried out in stealth mode. Nexagent is now finalising agreements for commercial pilots with a limited number of telecoms carriers and plans to launch its commercial service in the second half of this year.

Nexagent founder and CEO Charlie Muirhead said: “This is great news for Nexagent. The amount of money we have raised and the pedigree of the VCs who have been involved is testament to the strength of Nexagent’s collaborative commerce proposition. We will be using the funds to help grow the business by supporting us through the commercial pilots so that we are well prepared for commercial launch”.

Gerry Montanus, Senior Principal at Atlas Venture, said: “Collaboration is key to leveraging network assets. Telecoms carriers can no longer expand their networks by building new facilities, as investment in this area has all but dried up. Therefore, they need to seek alternative ways of expanding geographic reach, cost effectively and reliably, and generating new revenues. Nexagent’s collaborative commerce platform allows them to do exactly this and will fundamentally change the telecoms model from being ‘network-centric’ to ‘customer-centric’.”

Barry Maloney, General Partner at Benchmark Capital, said: “With Nexagent, service providers and carriers can generate new revenues without having to make additional capital expenditure, invest in new facilities or allocate internal resources. It’s a win/win situation and will provide a massive boost to an industry which is going through tough times at the moment. It will also stimulate the roll out of advanced network services, bringing enormous benefits to enterprises and service providers alike.”

In March 2001, Nexagent raised £3 ($4.4) million in first round funding which was led by angel investment fund iGabriel.net, and included investments from Esther Dyson, chairman of EDventure Holdings; Andrew Smith, co-founder of Extreme Networks, Martin Velasco, former non-executive director of Telefonica and co-leader of McKinsey Worldwide Telecommunications Group; Greg Lock, former worldwide general manager at IBM; Tony Morris, a leading emerging IT and Internet investor; and Mike Reilly, Managing Director at JPMorganChase.

NOTES TO EDITORS

About Nexagent
Nexagent is a global leader in collaborative commerce for the telecommunications industry. Headquartered in Reading, UK, it was founded in July 2000 by Charlie Muirhead, who previously founded Orchestream, the telecoms software company, and iGabriel.net, the angel investment network; and Chris Gare, formally Director of Advanced Services at Cable & Wireless.

Nexagent has developed a network peering architecture and collaborative commerce platform enabling service providers, for the first time, to work together to deliver cost-effective, performance-guaranteed, managed IP services internationally across multiple telecom carriers. Nexagent is now finalising agreements for commercial pilots with a limited number of telecoms carriers and plans to launch commercial services in the second half of this year. For more information on Nexagent, visit its Web site at www.nexagent.com.

About Atlas Venture
Atlas Venture is the leading international, early-stage venture capital firm investing in life sciences, communications and information technology companies. With offices in Boston, London, Menlo Park, Munich, Paris, and Seattle, Atlas Venture's investments are split between the United States and Europe.

Founded in 1980, Atlas Venture has organized six international funds, and currently manages over $2.5 billion in committed capital, including a $967 million fund raised in April 2001. The Atlas Venture investment team is comprised of seasoned operating executives and career venture capitalists who have been deeply involved in the formation and development of more than 300 companies worldwide. For more information, visit the Atlas Venture Web site at www.atlasventure.com.

About Benchmark Capital
Benchmark Capital was founded in 1995 with the mission of helping talented entrepreneurs build major technology enterprises focused on long-term growth. Benchmark takes a labour-intensive, team-oriented approach to venture investing in order to deliver a superior level of service to its portfolio companies. Benchmark's portfolio includes franchise companies such as Ariba Technologies (Nasdaq: ARBA), Broadbase Software (Nasdaq: BBSW), CacheFlow (Nasdaq: CFLO), Critical Path (Nasdaq: CPTH), eBay (Nasdaq: EBAY), Handspring (Nasdaq: HAND), Juniper Networks (Nasdaq: JNPR), Kana Communications (Nasdaq: KANA) and Red Hat Software (Nasdaq: RHAT). Managing more than $2.3 billion in committed venture capital, Benchmark focuses on early-stage investing in markets where the partners have direct, relevant experience. In Europe, Benchmark Capital manages a $750 million fund. For more information on Benchmark, visit its Web site at www.benchmark.com.

About Quester Capital
Founded in 1984, Quester is an independent venture capital company specialising in unquoted growth companies and has more than £300 million under management. The company focuses on investments in two areas – information and communications technologies, and healthcare and life sciences.

Quester manages institutional venture capital funds on behalf of international investors, funds from academic institutions including Oxford, and Bath and Bristol Universities, four listed investment trusts, and an e-commerce fund for CGNU, the major insurance group. Both its institutional funds and its investment trusts have strong track records.

Quester Web site: www.quester.co.uk.

About Lago Ventures
Lago Ventures is a venture capital firm, founded by Nadim Nsouli, focused on investment opportunities in the technology sector. Lago Ventures was formed to invest in and support highly focused entrepreneurs to help them build great companies. Our support surpasses that of funding alone. We provide the capital, strategic support and network required to achieve these goals quickly, efficiently and globally. We actively work with our portfolio companies to provide developmental guidance, assistance in leveraging Lago’s regional and global network, and in accessing high-quality people. Lago Ventures focuses primarily on European based investment opportunities. However, we also co-invest in US based companies looking to expand into Europe.

About iGabriel.net
IGabriel.net is a network of connected and innovative private investors with access to funds valued at over €12 million. We provide high-risk, early stage capital. Our investee companies are mainly UK-based, high-potential start-ups, which have been both endorsed and financially backed by individual network members. Founded by Charles Muirhead (founder of Orchestream plc), iGabriel.net members include Esther Dyson, Chairman of EDventure Holdings, Greg Lock, former Worldwide General Manager of IBM, Etienne de Villiers former Managing Director of Walt Disney International and Paul Myners, Chairman of Gartmore Trust.

For further press information about Nexagent, including photography, please contact George Coleman at Mantra PR:
Tel: +44 (0)20 7072 2300 Fax: +44 (0)20 7072 2301
Email: gcoleman@mantra-pr.com Web: www.mantra-pr.com

For further press information about Benchmark Capital, including photography, please contact Melissa Morris at Mantra PR:
Tel: +44 (0)20 7072 2300 Fax: +44 (0)20 7072 2301
Email: mmorris@mantra-pr.com Web: www.mantra-pr.com