Layer 7 Technologies Adds USD $8.9M in Financing

Business Wire, Oct 26, 2006

Additional Funds to Help Accelerate Sales and Marketing Expansion

VANCOUVER, British Columbia -- Layer 7 Technologies, a leader in XML security and networking appliances, today announced completion of its Series B funding. The new funding comes on the heels of recent sales growth and corporate expansion including the addition of a new CEO, Ed Koepfler. The new funding will help Layer 7 significantly expand its commercial and public sector sales organizations and expand its sales footprint into Europe. The funding was co-lead by BDC Venture Capital, the Working Opportunity Fund, managed by GrowthWorks Capital, two of Canada's largest venture capital firms and Shoreline Venture Management.

"We believe Layer 7 is well positioned to take a large share of the emerging SOA security market and we are pleased to lead this financing," said Joe Timlin, VP Investments, GrowthWorks Capital. "With the recent market growth in SOA and Web 2.0 we see tremendous opportunity for infrastructure that can help secure, simplify and scale Web service deployments."

"This funding represents a tremendous vote of confidence in the company and its growth strategy," added Layer 7 Technologies CEO Ed Koepfler. "With the increasing enterprise focus on XML for enabling service-centric integration and information sharing, the need for XML security and networking infrastructure has never been greater."

About Layer 7 Technologies

Layer 7 Technologies is a leading provider of XML security and networking infrastructure for next generation service oriented and Web oriented integrations. The SecureSpan family of XML appliances and gateway software address the security, complexity, performance and networking issues associated with deploying and maintaining production Web services. To learn more please visit www.layer7tech.com.

About GrowthWorks*

GrowthWorks (www.growthworks.ca) is a recognized leader in venture capital fund management with proven experience in the raising and managing of capital. GrowthWorks[TM] managed funds have $800 million in combined assets and include the Working Opportunity Fund, GrowthWorks Canadian Fund, GrowthWorks Commercialization Fund and GrowthWorks Atlantic Venture Fund. GrowthWorks has a team of skilled and knowledgeable investment professionals with a combined 200 years of experience. The investment team has a proven track record of identifying, analyzing, and structuring investments in emerging sectors.

*GrowthWorks refers to affiliates of GrowthWorks Ltd.

About BDC Venture Capital

BDC Venture Capital is a major venture capital investor in Canada, active at every stage of the company's development cycle, from start-up through expansion, with a focus on technology-based businesses that have high growth potential and that are positioned to become dominant players in their markets. BDC Venture Capital has been involved in venture capital since 1975 and has to date invested in more than 400 different companies. It currently manages over $350 million in venture capital assets and more than 80% of its portfolio is invested in the areas of biotechnology, medical and health related technology, telecommunications, information technology and electronics.

About Shoreline Venture Management

Shoreline Venture Management, LLC is a venture capital firm based in the San Francisco Bay Area. Shoreline was established in 1998 to manage the Shoreline Venture Partners funds (SVP I and SVP II), as well as future investment funds. To date, Shoreline has invested primarily in early stage businesses, having committed capital to several companies, and continues to evaluate new opportunities.