Crescendo Ventures Leads Investment in Verimatrix; Verimatrix Plans to Expand into New Markets and Extend Global Lead; Existing Investors Siemens and Mission Ventures Participate

Business Wire, June 22, 2006

SAN DIEGO -- Today Verimatrix announced the closing of an $8 million investment round led by Crescendo Ventures and included Mission Ventures and strategic investor Siemens Venture Capital GmbH. Verimatrix develops Pay TV content protection and access control systems, which include the industry's first user-specific forensic watermarking technology, VideoMark(TM). Today, Verimatrix's solution is the most widely deployed IPTV content protection system within tier one operators around the globe.

"We are excited to lead this investment round in Verimatrix," said Peter van Cuylenburg, general partner of Crescendo Ventures. "Verimatrix has its finger on the pulse of Hollywood studios, linear broadcasters, and pay TV operators, and on the direction of the industry on a global basis. When we looked closely at the digital content protection market, it became clear that Verimatrix is the leader from a technology and market penetration perspective. Globally, Verimatrix is positioned for rapid growth, with a first class network of partners and highly satisfied customers."

Verimatrix designed the Verimatrix Content Authority System (VCAS) as a software-based content security solution that enables digital video content on devices and systems within media delivery networks to be encrypted and authenticated in order to identify security breaches and unauthorized network users. The company's patent-pending VideoMark, an available feature of VCAS, is the industry's first robust and invisible content tracking solution that enables forensic, user-specific marking of individual video copies to track piracy to the individual set-top box and other CE devices.

Because Verimatrix products allow piracy to be traced back to the source, and not just to the network operator, content owners are ensured a far higher protection level than with other distribution methods, such as DVDs and VHS tapes. Forensic watermarking can also be deployed as an effective way to prevent illegal content sharing. Prosecuting piracy and copyright infringement provides a strong deterrent and alters the general perception on the legalities of copyright abuse.

"This round of financing is important not only because it enables us to expand our technology into new markets, but because it demonstrates the conviction these major players have in Verimatrix's success," said Tom Munro, CEO of Verimatrix. "The additional capital combined with our advanced features in VCAS 2.0 will allow us to aggressively enter new markets and further secure our leadership position."

The Series B funding round includes follow-on investments from Siemens Venture Capital GmbH (SVC), a subsidiary of Siemens AG, and Mission Ventures, a venture capital firm dedicated to building leading technology companies in Southern California.

About Verimatrix

Verimatrix is the leading provider of digital content protection solutions with a global customer base including leading telecommunications providers in Europe, North America and Asia. Verimatrix offers provider-approved, carrier-class solutions specifically for today's bi-directional Pay TV. Through the seamless integration of patented digital watermarking technology into its best-of-breed encryption solutions, Verimatrix protects content and revenue streams, as well as detects digital piracy wherever it occurs within the distribution chain. Verimatrix has developed excellent relationships with the major Hollywood studios by providing valuable anti-piracy solutions for the fight against rampant digital piracy. For more information, please visit www.verimatrix.com.