Linuxcare, First Pure Play Linux Services Firm, Completes $32.5 Million Round of Funding

A Resounding Validation of Linuxcare's Enterprise Services Business Model By Investors

San Francisco, December 14, 1999 -- Linuxcare, Inc., the premier provider of Linux services to the enterprise, has received $32.5 million in its second round of funding from leading venture firms and strategic corporate partners, led by Patricof & Co. Ventures.

"We are extremely pleased with the group of investors who are backing Linuxcare," said Fernand Sarrat, President and CEO of Linuxcare, Inc. "The investment community has delivered a clear vote of confidence for the Linux services business model, and Linuxcare's leadership role in the enterprise Linux services category."

The lead investor, Patricof & Co. Ventures, Inc., is an international private equity investment firm that together with its international affiliates, Apax Partners, manages over $5.5 billion on behalf of major institutional investors in the U.S. and abroad. Both Apax Partners Europe and Integral Capital Partners participated in the round. Paul Vais, Managing Director in the firm's Palo Alto California office, will join the Linuxcare Board of Directors.

"Linuxcare is the first company in the Linux space to embrace the fact that the true value-add is customer service," said Vais. "They've built a state-of-the-art, highly scalable technology infrastructure for service delivery. We're pleased to work with Linuxcare to enable expansion of their infrastructure to address the global opportunity for enterprise Linux services."

Strategic corporate investors include Dell Computer Corporation, Sun Microsystems, Inc., Oracle Corporation, and Motorola, Inc. Existing investors Kleiner Perkins Caufield & Byers, who were the lead investors in Linuxcare's first round of funding, also participated in this round.

Unlike other companies in the Linux space, which derive the majority of their revenues from the sale of packaged Linux software, or from hardware with Linux pre-installed, Linuxcare focuses exclusively on customer service for enterprise Linux environments. This focus has enabled the company to build the world's leading suite of Linux services-including technical support, professional services, education, and product certification-and has resulted in high-level strategic partnerships and customer relationships with companies such as Dell, Sun, KPMG, IBM and others.

The series B financing will be used for expansion of Linuxcare's IT capabilities, worldwide sales structure, strategic business units, international business, and marketing programs.

About Linuxcare, Inc.
 
Linuxcare, Inc. is the leading provider of customer services for enterprise Linux environments, including technical support, professional services, education, and product certification. Linuxcare supports all major distributions of Linux, leading Open Source software solutions, and Linux-based enterprise database applications, on all major hardware platforms.

With funding from Kleiner Perkins and others, Linuxcare counts Dell Computer, IBM, and Sun Microsystems among its strategic partners. The company hosts http://www.linuxcare.com/ the world's leading online technical support resource for Linux.

Founded in 1998, Linuxcare is headquartered in San Francisco. The company can be reached at +1-415-354-4878. Japanese information regarding Linuxcare services is now available through jpinfo@linuxcare.com.

Linuxcare and Linuxcare logo are service marks, and "At the center of Linux" is a trademark of Linuxcare, Inc. Linux is a registered trademark of Linus Torvalds. All other trademarks are acknowledged.