Axerra Networks Secures $10 Million in Second Round Financing; Investors Cite Company's Clear...

Business Editors/High-Tech Writers

BOCA RATON, Fla.--(BUSINESS WIRE)--Sept. 3, 2002

Axerra Networks announced it has closed a $10 million second round of private financing.

The latest round of funding will fuel Axerra's drive to become the leader in Multiservice over

The current funding round represents the commitment of both new and existing investors, with half of the financing coming from external investors. Participating directly for the first time and leading the second round is TLcom Capital Partners Limited, a pan-European venture capital fund specializing in communications and information technologies. The TLcom management and advisory team represents over 60 years combined experience in finance and strategy for the communications industry in Europe and Silicon Valley.

"Observing Axerra over the last two years, we concluded that it is one of the very few telecom technology start-ups that is well positioned to succeed in this very difficult market," said Mauro Pretolani, a General Partner at TLcom, who will join Axerra's Board of Directors. "Operators need Axerra's unique technology, either to enlarge their service offering by selling more services over existing IP Networks, or to cut cost by unifying networks over the Internet Protocol. They are ordering Axerra equipment for investment projects today, because they have extraordinarily short payback time, even below six months. This proven technology, coupled with the exceptional strength of the management team and the initial market traction already obtained, makes us confident of the capabilities of Axerra to succeed."

Axerra will use the funds to augment its existing revenues, accelerating major carrier initiatives and further enhancing its award-winning AXN series of Multiservice IP Concentrators. The company has generated revenue since the end of its first year of operations, leveraging a rare combination of ground-breaking technology along with a focused business discipline.

"This round of financing proves the strength and potential of Multiservice over IP," said Gil Biran, President, CEO and Founder of Axerra Networks. "Only the best visions and most promising vendors are able to raise funding in this environment of reduced service provider capex. It is particularly gratifying to be able to attract new investors during the worst economic time in the history of communications. Just like in the days before the bubble, companies today have to prove themselves based on realistic investment levels. We know how to do this and intend to show that we will be a long-term player in this industry."

"Axerra's vision for Multiservice over IP is exactly what is needed by service providers in today's financial environment," continued Mr. Biran. "Our vision and our company continue to change the business equation for service providers leveraging IP, MPLS, and IP-Metro network deployments, allowing providers to unlock the power of their IP networks."

About TLcom Capital Partners

TLcom Capital Partners Limited, established in 1999, is a London-based venture capital firm investing in communication technologies and services companies. TLcom manages Euro 185M for investments mainly in European and in US-Israeli start-ups. TLcom Capital Partners is IMRO registered and FSA regulated. For more information, visit http://www.tlcom.co.uk

About Axerra Networks, Inc.

Established as Axerra Networks in November 2000, and located in Boca Raton, Florida, the Company develops, manufactures and markets products for the emerging market of Multiservice over IP. Axerra's Multiservice IP Concentrator is the only product on the market that gives carriers the ability to unlock the power of their IP networks by integrating legacy services, such as Frame Relay, ATM, and Leased Line, together with emerging IP services over unified IP, IP/MPLS, and IP-Metro networks. For more information, please contact: info@axerra.com.