Leading VCSEL-Based Transceiver Manufacturer Lands $17M in New Funding - E2O Communications Attracts Top Venture Capitalist, New Enterprise Associates

Calabasas, Calif.--- Feb. 18, 2000 -- E2O Communications, Inc., announced today that it has received $17 million in a second round of venture capital financing. This capital infusion was led by renowned venture capital firm New Enterprise Associates (NEA) (www.nea.com) and also included Windward Ventures, Fortune Consulting Group in Taiwan, Economic Development Board of Singapore, and GAINS Investment Corporation. E2O develops, designs, manufactures and markets optical transceivers for high speed Local Area Network (LAN), Storage Area Networks (SAN), and telecom back plane applications based on its short and long wavelength Vertical Cavity Surface Emitting Laser (VCSEL) technology.

This investment follows E2O's achievement of several critical product development milestones including the completion of its 2 Gbps product family, the successful demonstration of its long wavelength VCSEL close to1.3 micron, and the addition of key highly experienced executives to its team.

"NEA is committed to backing new technology innovators and we believe E2O is well positioned to emerge as a leading player in the optical fiber communications industry," said Richard Kramlich, NEA co-founder. "Consistent with our investment philosophy, E2O's proprietary long wavelength VCSEL technology addresses the needs of a huge and growing marketplace. We also believe strongly in E2O's management team and the collective experience and wisdom of that team."

Said E2O's CEO H.C. Lee, "NEA has a great team of technology savvy people who have been a tremendous source of information, support, and guidance to E2O. They represent their investors well and they challenge us to perform at our very best. In today's Internet economy, time to market is a critical success factor. This NEA-led infusion of capital is helping us to move as quickly as possible towards meeting our customers' needs with new, leading edge VCSEL products."

VCSEL Technology Perfect for Increasing Network Bandwidth

VCSEL transceivers emit light vertically from the surface of a fabricated wafer, converting electrical data into an optical form that can then be re-transmitted over high bandwidth optical fiber networks. VCSELs offer a major cost advantage over conventional edge emitting lasers to enable the fast growing market for short distance interconnects.

About NEA

New Enterprise Associates (NEA) is one of the industry's premier venture capital firms. For 22 years, NEA has practiced classic venture capital by investing in early-stage companies and working with management to nurture and build companies of real and lasting value. NEA is now the leading start-up venture investor in the country.

NEA shares characteristics with other venture firms but differs in many ways including the large number of successful companies it has financed, its geographic reach, the experience and expertise of its partners, and its commitment to its entrepreneurs and their companies. Since its inception in 1978, more than 125 NEA companies have gone public. More than 100 have issued IPOs since 1990.

About E2O

Headquartered in Calabasas, California, E2O Communications, Inc. is a leading global manufacturer of optical transceivers for the Gigabit Ethernet and Fibre Channel markets. Current products in development include serial data links at 10 Gbps, parallel data links, and other single mode transceivers based on E2O's proprietary high-performance long wavelength VCSEL technology platform. Its website is www.e2oinc.com.