ChannelWave Raises $26.5 Million In Capital.

Business Editors

CAMBRIDGE, Mass.--(BUSINESS WIRE)--Aug. 6, 2001

Major Investment From SOFTBANK Venture Capital, ABS Capital

Partners, Lazard Technology Partners and Ironside Ventures

Demonstrates Strong Support for Partner Relationship Management

Leader

ChannelWave Software, Inc., the leader in Partner Relationship Management (PRM) solutions, today announced that it closed a $26.5 million round in venture financing. Led by SOFTBANK Venture Capital (SBVC), this most recent round includes increased investments from ABS Capital Partners, Lazard Technology Partners (LTP) and Ironside Ventures LLC. Capital raised in this round brings total ChannelWave financing to $59 million.

ChannelWave will use the new capital to bolster its sales and marketing programs, increase customer service and support, broaden its product line and strengthen product development efforts for its market-leading PRM solutions, and bring the company to profitability in 2002.

"Raising this amount of capital in today's economic environment is a great testament to ChannelWave's ability to deliver powerful and mission-critical solutions to our customers," said Chris Heidelberger, president and CEO of ChannelWave. "These blue chip investors have talked to our customers and conducted a tremendous amount of due diligence and have validated ChannelWave's capacity to help companies increase revenues and reduce costs by optimizing the performance of their indirect sales channels. This additional financing enables us to accelerate our market penetration and expand the capabilities offered through our proven enterprise software solution."

"ChannelWave has made great strides in helping enterprises realize the revenue potential that exists through effective channel management," said Bradley Feld, principal managing director, SBVC. "Because over 60 percent of revenue flows through indirect channels in many industries, even small percentage increases in performance can deliver an enormous impact on a company's bottom line. ChannelWave has established itself as the leading provider of Partner Relationship Management solutions, with a seasoned executive team, and we are very confident in the company's long-term success."

ChannelWave's Web-based PRM solution allows enterprises to reduce costs and increase revenues by optimizing their business partnerships. By automating and scaling best practices among vendors, partners and customers and enabling highly collaborative and complex partnerships, ChannelWave helps organizations to dramatically improve the effectiveness of their indirect sales channel to gain competitive advantage.

Technology and financial analysts have recognized PRM as a fast-growing software category. According to Gartner Group's Partner Relationship Management: MQ Evaluation Criteria, PRM market investments grew 43 percent in 2000. The Yankee Group recently forecast channel management solutions as a $1.25 billion market by 2004.

"Channelwave extends traditional PRM capabilities by enabling highly collaborative, many-to-many relationships among vendors, partners and customers to improve communication, sales performance and visibility across the demand chain," said Sheryl Kingstone, program manager, The Yankee Group. "This significant financial investment supports the Yankee Group's belief that PRM technology from companies like ChannelWave will be widely recognized as a mission-critical solution for organizations that sell through multiple channels."

Major Financial Investors

Financial investors participating in this funding round include:

SOFTBANK Venture Capital works with the best entrepreneurs to create the most powerful companies of the Internet economy. SBVC has $2.5 billion under its management, over 150 leading Internet companies in its portfolio, and an unparalleled investment team of former CEOs and entrepreneurs, technology pioneers, senior executives from major technology corporations, and leaders from the investment banking community. Companies in its portfolio include Art Technology Group, ChannelWave, E*TRADE, Interliant, iPrint.com, Net2Phone, PeoplePC, Preview Systems, Support.com and TeraBeam Networks. For more information, please visit www.sbvc.com.

ABS Capital Partners (www.abscapital.com) was founded in 1990 to invest in mid- to later- stage companies with scalable, sustainable business models that create long-term value. The firm's investment strategy focuses on companies providing software, services and infrastructure to Global 2000 corporations, healthcare enterprises and media/communications companies. ABS Capital leverages over 100 years of combined experience among its partners, and considers a range of investment structures, including expansion financings, management buyouts and recapitalizations for growth companies. ABS Capital's extensive knowledge of equity capital markets allows them to provide strategic guidance to companies and establish them as significant market leaders. With $1.4B under management, ABS has seven investing partners and offices in Baltimore, San Francisco and Northern Virginia. Over the past ten years, ABS Capital has invested in over 60 portfolio companies.

Lazard Technology Partners (LTP) is a venture capital fund dedicated to providing investors with superior returns through early-stage investments in information technology. LTP is managed by principals who collectively have over 80 years of experience in the information technology industry. This team brings together a combination of successful venture capital investment experience, CEO-level operating experience and in-depth knowledge and long-standing relationships in the technology industry. As an affiliate of Lazard Freres & Co. LLC, LTP takes advantage of the relationships and expertise of Lazard's worldwide network of advisory and capital markets services. For more information about LTP, please visit www.lazardtp.com.

Ironside Ventures LLC is a Boston-based venture capital firm making multi-stage equity investments in rapidly growing companies participating in the communications infrastructure and information technology industries. Ironside currently has approximately $150 million in assets under management The firm is managed by a core team of highly experienced professionals who have strong backgrounds in developing, underwriting and distributing private equity investments and structured finance products. For more information, please visit www.ironsideventures.com.

About ChannelWave

Founded in 1997, ChannelWave develops market-leading Partner Relationship Management (PRM) solutions that help organizations to reduce costs and increase sales revenues and profits by improving the loyalty and effectiveness of their business partnerships. By automating and scaling business processes between vendors and selling partners, ChannelWave enables businesses to effectively manage multiple sales channels and foster collaboration among partners to better market, sell and service end-customers. Backed by leading venture capital firms including ABS Capital Partners, Blue Rock Capital, Lazard Technology Partners, Ironside Ventures and SOFTBANK, ChannelWave's growing customer roster includes 3Com, AT&T, BEA, Hewlett Packard, Honeywell, Motorola, Nortel Networks, PTC, Toshiba and Qwest. ChannelWave is headquartered in Cambridge, MA, and has offices in San Jose, CA and Toronto, Canada. More information is available at www.channelwave.com or by calling (800) 862-5596.

ChannelWave is a registered trademark and Partner Loyalty System is a trademark of ChannelWave Software, Inc. All other logos, company and product names may be trademarks or registered trademarks of their respective owners.