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Akonix Raises $11 Million in Second Round Funding

Akonix Raises $11 Million in Second Round Funding

Business Editors/High-Tech Writers

SAN DIEGO & MENLO PARK, Calif.–(BUSINESS WIRE)–Dec. 9, 2003

Series B Investment Confirms Leadership in Securing and Managing

Instant Messaging; Appoints Menlo Ventures Managing Director, Founder

to Board

Akonix Systems Inc., the leading developer of enterprise-wide, real-time communications management software, has closed its second institutional round of equity financing in an oversubscribed $11 million round led by Menlo Ventures. Akonix’s total funding to date now exceeds $21 million.

H. DuBose Montgomery, who founded Menlo Ventures in 1976, joins Akonix’s Board of Directors. Mission Ventures, Palomar Ventures and Windward Ventures, who provided Akonix’s series A financing all participated in the round.

The funding follows a record third quarter for Akonix, where it added over 50,000 licensed customer seats and achieved a greater than 100% increase in revenue over Q2. Growth has been driven by further demand for instant messaging (IM) management and security solutions across a variety of industries, in addition to the initial IM logging and compliance demands for financial services customers.

“The use of IM in corporate networks is growing rapidly, and therefore the need to operate IM in a secure and managed environment has never been greater. Akonix has already delivered their products to major financial services, technology and other companies, and is well positioned to take advantage of this great business opportunity,” said H. DuBose Montgomery, founder of Menlo Ventures. “Akonix offers a real-time management platform with broad enterprise capabilities. This sets it apart from its competitors and is the driving factor behind its success.”

“We were impressed by Akonix’s large, diversified customer base, the vision behind the product strategy and the quality of the management team. We have committed ourselves to making this investment in Akonix to help it build and maintain its market leadership position,” added Montgomery.

In Q3, Akonix expanded its customer base across multiple markets and rolled out some of the industry’s first large-scale IM management deployments providing advanced real-time management for IM across the enterprise. The company’s products have been adopted by Global 2000 customers spanning the media, financial services, healthcare, telecommunications and technology sectors.

“There are now almost 65 million business users of instant messaging worldwide, and those numbers will increase dramatically over the next few years,” said Paul Ritter, senior analyst for collaboration research at the Yankee Group. “Enterprise IM is expected to post a compound annual growth rate of more than 150% through 2005. Most corporate IT managers now realize that securing and controlling IM is a critical business need. Scalable IM management solutions like Akonix’s L7 Enterprise are becoming essential for managing real-time communications, and Akonix Systems is emerging as a strong player in the enterprise-wide IM management space.”

“This is a very significant investment and powerful endorsement for Akonix. We value the experience that Menlo Ventures and DuBose Montgomery bring to Akonix,” said Peter Shaw, CEO of Akonix. “The additional funding follows Akonix’s best quarter and strong growth throughout 2003. Organizations are just beginning to allocate resources to address the need to manage the use of IM for legal, security and productivity reasons. Our solution is a highly-scalable real-time communications management platform that enables enterprises to use IM in a safe, secure fashion through real-time usage policies, IT management capabilities and advanced logging and archiving capabilities.”

Akonix will use the new funding to continue its growth, focusing on investment in sales, marketing, customer service and product development.

About Menlo Ventures

Menlo Ventures has spent the past 27 years helping visionary leaders turn technical innovations into world-class companies. Menlo has over $2.7 billion under management in nine venture capital funds, and currently focuses their investments in the areas of communications, software, Internet, semiconductors and computer hardware. The Menlo Ventures team is a group of investment professionals with hundreds of years of collective experience in technology, marketing, sales and general management. Their combined knowledge and expertise support emerging growth companies in achieving their maximum potential. For more information, please visit http://www.menloventures.com.

About Akonix

Akonix Systems Inc. is a leading provider of enterprise-class software solutions that help companies secure and manage the use of instant messaging (IM) and other real-time communications technologies.

The company’s offerings help organizations prevent unsanctioned use of both consumer IM and P2P file sharing, while providing security, management and control for authorized IM usage. Akonix’s award-winning solutions address industry and government compliance requirements (SEC, NASD, HIPAA, Sarbanes-Oxley).

Akonix’s solutions are in use by over 100 customers, with enterprise-wide deployments across a wide range of industries. Akonix is privately held and venture capital funded by Mission Ventures, Palomar Ventures and Windward Ventures.

For more information and access to free software downloads and trials visit www.akonix.com.

Akonix is a registered trademark of Akonix Systems, Inc. All other trademarks, tradenames, service marks, service names and images mentioned and/or used herein belong to their respective owners.

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