Narus Secures $30 Million in Expansion Financing

Narus, Inc. recently announced that it has secured $30 Million in expansion financing. This financing includes $20 Million in equity and a $10 Million revolving line of credit. The equity component will be led by American Capital Strategies Ltd.. This financing includes participation from existing investors including Mayfield Fund, Pacven Walden Ventures, J.P. Morgan Partners and NeoCarta Ventures. The funding will be used primarily to develop the next generation of award-winning NarusInsight products, and to accelerate the company’s global channel initiative to support the worldwide adoption for its products.

“Narus is the pioneer in the emerging growth market for the protection and management of carrier networks,” said Greg Smitherman, Managing Director at American Capital Strategies. “American Capital is extremely excited about the unique opportunity to invest in a company that has achieved market leadership through both superior technology and a proven business model.”

Narus has experienced strong growth over the past three years, driven by innovative products, tier 1 customers, and the successful implementation of its global channel initiative. In 2006, Narus filed seven patents, introduced the world’s first carrier-class security algorithms based on information entropy, and developed the industry’s first algorithms to classify encrypted IP traffic such as Skype. NarusInsight, the industry’s most powerful IP traffic processing system has garnered several awards over the last two years including the Red Herring Top 100 for shaping the future of technology, the AlwaysOn AO100 Private Company award for the leadership in emerging technology, and the 2006 Tomorrow’s Technology Today award for its superior network security capabilities.

Narus’ 2006 channel highlights include the achievement of Industry Optimized status in IBM’s PartnerWorld Industry Networks, a broadened relationship with NEC in Japan and Brazil, expanded footprint with Giza Systems in the Middle East and a new partnership with CommVerge Solutions in China, Korea, Thailand, Brunei, Malaysia and the Philippines.

“The dreams of securing and monitoring the overall network has been held by carriers, enterprises, and Governments for years,” said Albert Lin, Co-Head Director of Research, American Technology Research. “It’s not surprising to see a company like Narus attracting investors to accelerate the deployment of the necessary technologies to make these dreams materialize as fast a possible.”

“Narus is widely recognized as an innovation leader in the security and management of carrier-class IP networks,” said Greg Oslan, CEO of Narus. “This additional financing is a testament to the potential that investors see in the market, our business plan, and our intellectual property. We are extremely pleased that American Capital has chosen to be part of our team, and we look forward to working together with them and the rest of our investors to guide Narus through the next stage of our growth.”