Teknovus Raises $28 Million In “Oversubscribed” Mezzanine Financing Round

Led By Lightspeed Venture Partners and Includes Crossover Investor Galleon

PETALUMA, Calif. – September 17, 2007 – Teknovus, the leading provider of Ethernet Optical Network (EPON) chips for the deployment of triple-play services in broadband access networks, announced that it has secured $28 million in equity financing. The significant demand for the round by new and existing investors reflects Teknovus’ strong position in the fast growing, fiber access market. New investors in Teknovus include lead investor Lightspeed Venture Partners and the Galleon Crossover Fund, a Galleon Group fund. Other new investors are from Teknovus’ leading Asian markets, including Vision Venture Capital from Taiwan and Technology Alliance Investment and Itochu Technology Ventures from Japan. Teknovus’ existing investors also participated in this round, including USVP, Partech, Focus, Samsung, and Mitsubishi.

“EPON is a rapidly growing market and Teknovus’ position as the leading independent player, matches our profile for growth equity investments,” said Jake Seid, General Partner of Lightspeed Venture Partners. “Fiber is an end-game solution, not a stop-gap one and the Teknovus solution brings innovative services to consumers and businesses and increased revenue to carriers.”

“Teknovus has developed a winning combination of technologies and products, customers, management team and strategies to be the leading global fiber access chip vendor,” said Hans Schwarz, Managing Director at Galleon. “Teknovus is clearly demonstrating its fiber solution leadership with accelerating demand in Japan, Korea and China as well as  other parts of Asia and the US Cable Industry.”

“We are pleased that leading venture, institutional equity and strategic investors continue to acknowledge the strength of the worldwide EPON chip market and our position”, stated Greg Caltabiano, President & CEO, Teknovus. “Their investments in Teknovus are a clear validation of EPON’s momentum in global FTTx networks and our leadership in EPON chips and software.”

The funding will be used to accelerate the company’s roadmap, including 10G EPON, and to expand marketing, sales, and support close to customer deployments. Teknovus chips and software enable true IPTV-based triple-play services on fully loaded 1X64 PONs, without resorting to costly RF overlay. Teknovus’ architecture ensures carrier-grade quality of service at Ethernet price-points, enabling guaranteed SLAs for each customer, service and traffic flow.