FlexLight Scores $17M

ATLANTA -- FlexLight Networks, Inc., an optical access pioneer delivering the industry's first Gigabit Passive Optical Networking (GPON) solution for the last mile, today announced it has raised $17 million in its third round of venture capital funding. The Series C financing secures new outside investment from St. Paul Venture Capital, Accel Partners and Applied Materials Ventures, in addition to continued investment support from existing investors, Concord Ventures and Coral Ventures.

The company also announced the appointment of Bill Cadogan, General Partner with St. Paul Venture Capital, Joe Golden, General Partner with Accel Partners and Fahri Diner, General Partner with Applied Materials Ventures, to FlexLight's Board of Directors.

"FlexLight's innovative technology provides a robust and scalable platform for overcoming bandwidth bottlenecks in the last mile," said Bill Cadogan of St. Paul Venture Capital. "This, combined with the cost savings the solution offers, will prove to be a highly compelling proposition to operators and service providers."

"FlexLight has continually exceeded corporate and technical milestones and is now well positioned to become a leading long-term player in the optical access market," said Joe Golden, General Partner, Accel Partners. "There is growing customer interest in FlexLight's solution and Accel's investment is indicative of our belief that customer traction will increase and enable FlexLight to further its market leadership."

FlexLight's Optimate suite of GPON products is currently in trials and deployment with large service provider customers around the world. The products are based on the new ITU-T GPON standards known as G.984.x, and economically deliver Ethernet and TDM access solutions for Fiber To The Building (FTTB) applications traditionally served by SONET / SDH or point-to-point fiber solutions.

"FlexLight is a pioneer in its marketplace and its strong management team has the relevant experience to lead the company to long-term success," said Fahri Diner, General Partner, Applied Materials Ventures. "We are very confident that FlexLight will play an important role in the optical access market now and in the years ahead."

The Passive Optical Network Equipment market is estimated to reach over $1 billion in 2004, according to CIBC World Markets Estimates. A recent report from Probe Group, LLC, states that 80 per cent of global PON equipment revenues through 2008 will be for Fiber to The Building (FTTB) deployments.

"This round of investment will allow us to expand our sales, marketing and R&D efforts in order to further our market leadership," said Gary Lee, CEO, FlexLight Networks. "As the leader in GPON, FlexLight shipped its initial GPON solutions last quarter for revenue, and we are looking forward to the exciting prospects that lie ahead."

FlexLight Networks Inc.