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Press ReleasesCapella Raises $20 Million for Corporate Expansion Leveraging the Success of its Wavelength Management SubsystemsSAN JOSE, CA – March 15, 2007 – Capella, the leading provider of Wavelength Selective Switches (WSS) for use in reconfigurable optical add/drop multiplexers (ROADM) applications, today announced the completion of $20 million of equity and debt financing. The round was co-led by Levensohn Venture Partners and Rustic Canyon Partners and included funding from Formative Ventures, as well as participation by existing investors. Square 1 Bank provided the banking and debt facilities. As part of the transaction, Kip Sheeline from Levensohn Venture Partners and Michael Kim from Rustic Canyon Partners will join Capella’s Board of Directors. Capella will use the funds to accelerate shipments to existing customers and to expand its product lines to serve additional markets. Larry Schwerin, CEO of Capella commented, “We are excited to add a new group of top-tier investors who share Capella’s vision. Having their support validates our business model and enables us to meet the high-level of customer demand for our products. It is critical that we take advantage of our momentum domestically and internationally by expanding Capella’s product family and market opportunities and by further scaling our manufacturing operations at Fabrinet. This capital also enables us to more effectively support our strategic relationship with Furukawa, and to ensure complete customer satisfaction during a period of rapid growth.” According to Jeffrey Osborne, Equity Research Analyst at CIBC World Markets, "Telecom carriers are in the midst of upgrading their networks to support new IP-based services such as faster broadband networks, video, business Ethernet services and wireless backhaul. We see wavelength selective switches, such as Capella’s next generation technology, being very well positioned to capitalize during this period of network transformation." Kip Sheeline, Managing Director, Levensohn Venture Partners added, “We are very excited about the Capella investment. The company has an outstanding team, a best-in-class family of products and an excellent value proposition for its customers. It is the clear industry leader in delivering next-generation WSS solutions. As bandwidth demands on metro and long-haul infrastructure grow world-wide, the performance and flexibility of our solution lends itself to a large and growing number of carrier and MSO network deployments." Michael Kim, Partner, Rustic Canyon Partners, commented, “Delivering rich media content services requires cost-effective network flexibility and scalability. Capella provides tremendous value to its customers, enabling them to provide optimized, reconfigurable networks to meet the demands of this broadband-intensive services rollout. This round of capital provides Capella with the resources to meet its customer demand.” Formative Ventures’ General Partner, Dino Vendetti, noted that, “Capella is already making a meaningful difference in a rapidly-growing and critical market. We are very excited to have the opportunity to help the Company as it builds on its technical and strategic edge.” Ram Orenstein, Associate VP for Optical Product Line Management of ECI’s Transport Networking Division stated that, “With the deployment of advanced broadband and IPTV services globally, next-generation WSS technologies such as those from Capella significantly reduce capital and operating expenditures of the services operators. Capella’s solutions offer dynamic wavelength provisioning capability that eliminates the multiple, manual touch points in the network, and offers real time optical performance monitoring to guarantee the best QoS for all services. Capella is at the forefront of this evolution.” Capella will feature a live demonstration of its products at its OFC/NFOEC Booth #3713 at the Anaheim Convention Center, Anaheim, California, March 25-29, 2007. About Capella About Levensohn Venture Partners About Rustic Canyon Partners About Formative Ventures About Square 1 Bank
Contact: Capella Stepping Out Communications
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