ITXC Closes $15M in 2nd Round of Funding

Business Wire, March 8, 1999

PRINCETON, N.J.--(BUSINESS WIRE)--March 8, 1999--

Investors Include: Chase Capital Partners, Flatiron Partners, Intel

Corp., Polaris, Spectrum Equity, and VocalTec Communications

ITXC Corp (www.itxc.com), a Tier 1 carrier of Internet telephony, today announced the closing of a $15 million second round of venture capital financing.

The investors include Chase Capital Partners, Flatiron Partners, Intel Corporation, Polaris, Ltd., Spectrum Equity Investors, and VocalTec Communications, all of whom also invested in ITXC's first $10 million round.

ITXC currently operates a global Internet telephony network with 132 PoPs and a hub in New York City. The new funds will be used for additional hubs in Los Angeles (Spring 1999) and other U.S. locations, as well as at select locations in Europe and Asia to further expand the worldwide termination footprint.

The company will also use the funds for further development of its specialized QoS tools and to increase its worldwide marketing activities.

ITXC was founded in July 1997 by Tom Evslin, formerly Vice President at AT&T where he was responsible for building and running its WorldNetsm Service. Before that, he was General Manager, Server Applications at Microsoft Corporation. Evslin is ITXC's Chairman and CEO.

The management team also includes COO John Musci, formerly Senior Vice President of Wholesale Markets - Switched Services at Qwest Communication Corp., and CFO Edward Jordan, formerly CFO of Dialogic Corp.

ITXC board members include Evslin, William Collatos, Managing General Partner of Spectrum Equity Investors; Fred Wilson, Managing Partner of Flatiron Partners; Elon Ganor, Chairman Of VocalTec Ltd., and company executives Musci and Jordan.

ITXC Corp (Internet Telephony eXchange Carrier) manages a network of 132 Internet telephony PoPs in 28 countries and 54 cities and sells wholesale Internet telephony call completion worldwide to PTTs, new competitive carriers, prepaid calling card companies, other resellers, and Internet Telephony Service Providers (ITSPs).

The service provides best value routing - consistent quality at low prices for international calls, especially to developing countries. Use of the Internet helps keep costs low while massive redundancy provides reliable quality.

"This additional funding by our existing investors enables us to accelerate our international buildout and ramp traffic even more quickly than we had originally planned," said CEO Tom Evslin. "Internet telephony is one of the first applications on the Internet to have a market beyond `just computer users.' We have now proven that the service is commercially viable and have taken a lead in this market."

"Intel supports ITXC's efforts in deploying interoperable products based on the ITU H.323 standard," said Ali Sarabi, Director of Broadband and IP Telephony Lab in the Intel Architecture Labs. "Activities such as iNow provide a forum for IP telephony vendors to work together toward standards-based interoperability, and can help accelerate broader deployment of products and services."

"Spectrum's interest in ITXC is a function of its experience in financing communications companies with a proprietary perspective in networks and the

evolution of traditional telephony and services in an IP dominant world," said Bill Collatos of Spectrum Equity. "The convergence of traditional communications with data solutions and applications provides an exponential leap in network economics and value added services."

A select group of gateway operators provide termination for ITXC around the world. These suppliers, who have demonstrated that they can meet ITXC's quality standards, benefit from traffic originated well beyond their marketing areas but routed to them by ITXC. The company has recently announced relationships with Bell Atlantic and Japan Telecom.

Global TechVentures Magazine recently chose ITXC as one of its ten best "global" or "cross-border" start-ups of the year. The company was also featured in Red Herring's list of the top 100 private and public companies in digital technology, detailed in the publication's September 1998 issue.

ITXC received the Red Herring recognition for "being a leader in the Internet telephony industry and the industry's exchange carrier with the largest international IP network of certified Affiliates." ITXC was also recently chosen as one of 10 finalists for the Entrepreneur of the Year (1998) Award by the Harvard Business School Club of New York.

About the Investing Organizations

CHASE CAPITAL PARTNERS (www.chase.com), with over $5 billion of invested capital, is one of the largest private equity investment firms in the world. Chase Capital Partners is an affiliate of Chase Manhattan Corp. The firm has operations in New York, London, Singapore and Sao Paolo.

Chase Capital Partners is a leading private equity investor in the technology, media, consumer, medical and retailing industries and a leader in private equity investing in Latin America.