VA Linux Systems Secures $25 Million In Equity Funding

SUNNYVALE, Calif., June 21 1999 -- VA Linux Systems (VA), the leading provider of Linux-based systems, service and Internet support solutions, today announced it has completed a $25 million round of private equity funding in a second round of financing. Companies participating in this round of financing include IDG Ventures, Intel Corporation, Lehman Brothers, Presidio Venture Partners, Sequoia Capital, SGI, SMALLCAP World Fund Inc., Sumitomo Corporation and W.R. Hambrecht + Co.

Since its inception, VA has been leading the growing migration of computer users from Windows NT, NetWare, and Unix operating systems to Linux, the award-winning open source operating system, by providing complete, pre-installed Linux computer systems and nationwide service and support. Last month, VA introduced Linux.com, a portal for consumers, business users and programmers interested in Linux. With this new round of funding, VA will be able to extend its implementations into additional systems, service and portal arenas.

"We are extremely pleased to have additional capital from such an established group of investors because it will help us grow to meet the expectations of the growing market for Linux based solutions," said Dr. Larry Augustin, VA president and chief executive officer. "The response from the investment and technology communities continues to be extremely supportive, and we look forward to continued success on their behalf."

About VA Linux Systems

VA Linux Systems is the leading provider of Linux computer systems, support and Internet services. The first and fastest growing Linux systems company in the world, VA is a pioneer in providing high performance workstations and servers to enterprises, service providers and technical computing markets and is at the forefront of the open source revolution. Linux.com, a VA production, is the leading open source portal on the Internet, enabling millions of new users to connect dynamically to the work of the Linux community. Based in Sunnyvale, Calif., the privately held company has gained a reputation for innovation and responsiveness that is making it a leader in full service Linux solutions. For more information contact VA at http://www.valinux.com, 888-LINUX-4U or by sending email to sales@valinux.com.

Note: VA Linux Systems is a trademark of VA Linux Systems, Inc. Linux is a registered trademark of Linus Torvalds. All other trademarks are property of their respective owners.