Spiceworks Lands $8 Million Series B Funding Round

Business Wire, August 28, 2007

Ravi Mohan of Shasta Ventures and Former Dell Executive, John Hamlin, Join Board of Directors

AUSTIN, Texas -- Spiceworks[TM], Inc., the provider of the industry's first free ad-supported IT management software, today announced that it has closed $8 million in series B financing. The funding round was led by Shasta Ventures with participation from Spiceworks Series A investor, Austin Ventures. The funding will be used to support the rapidly expanding base of more than 120,000 Spiceworks users as well as future software development and sales and marketing efforts.

In addition to securing its recent funding round, Spiceworks announced that Shasta Ventures co-founder and managing director, Ravi Mohan, and former Dell senior executive, John Hamlin, have joined the Spiceworks board of directors. They'll work with current Spiceworks board members, Scott Abel, CEO of Spiceworks; John Thornton, General Partner of Austin Ventures; and Mike Maples Jr., managing general partner of Maples Investments, to help guide Spiceworks as it continues its rapid growth as the first ad-supported business application for a specific vertical - in this case: IT managers at small and midsize businesses.

"The consumerization of the enterprise is happening all around us - especially in the small business market," said Ravi Mohan, general partner of Shasta Ventures. "Spiceworks is a next-generation software company that provides free software that solves the needs of an IT administrator. The quality of the product is evidenced by the rapid viral growth in their user base. We look forward to working with Spiceworks as it continues to innovate in how software is delivered to and used by businesses around the world."

Ravi Mohan has spent his entire career in the software business. Before co-founding Shasta Ventures, Mr. Mohan was a general partner at Battery Ventures where he led eight investments and served on the boards of 12 software and technology-enabled service companies. Previously he built transaction-processing systems at Accenture, sold and implemented packaged software applications for Hyperion Software Corporation, and ran MIC, a software development firm based in India focused on business intelligence. Mr. Mohan also spent time at McKinsey & Company working with consumer packaged goods companies.

John Hamlin is currently the president and managing partner of Bozeman Limited Partnership, an Austin-based private equity firm. Mr. Hamlin was senior vice president of Dell Inc.'s Online Business and Global Brand Marketing until February 2007 and served as the senior vice president of Dell's U.S. consumer business from 2000 to 2005. He joined Dell in 1996 and held a variety of marketing and operations positions both in the U.S. and Japan. Before joining Dell, Mr. Hamlin worked in the venture capital field and served as a strategic consultant with Bain & Company.

"Spiceworks is shaking up the world of business software by redefining how it should be supported financially," said Scott Abel, CEO of Spiceworks. "With more than a 120,000 users in our corner, it's clear that software business models once thought acceptable only for consumers are now ideal for certain business software applications. We are honored to have the support of our customers, top investors and board members as we work toward helping business software users and advertisers make the most of this shift."

In July 2006, Spiceworks delivered the industry's first ad-supported IT management application. In less than a year since its launch, the software - designed for the SMB market - has gained more than 120,000 users in 185 countries around the world. These organizations rely on the Spiceworks IT Desktop to discover, inventory, monitor, track and report on more than 5.4 million hardware devices and software applications that together support 4.2 million employees. The free Spiceworks software is supported by displaying relevant ads on topics that are useful to IT professionals rather than by subscription or software licensing fees.

Over the past year Spiceworks has achieved numerous industry accolades, including receiving the PC Magazine Editors' Choice Award and being named one of five "Next Big Thing" companies by Enterprise 2007, a prestigious annual event run by The Sand Hill Group.

For more information on Spiceworks or to download the free Spiceworks IT Desktop software, visit www.spiceworks.com.

About Shasta Ventures

Shasta Ventures is a venture capital firm formed by three venture capital veterans from leading venture firms. Located in Menlo Park, CA, Shasta Ventures manages a $210 million venture capital fund to invest in early stage technology companies serving consumer and enterprise customers. The fund pursues investment opportunities within the infrastructure, software and technology-enabled service sectors. For more information on Shasta Ventures, please visit www.shastaventures.com.

About Austin Ventures

Austin Ventures has been working with talented entrepreneurs to build valuable companies since 1979. With $3 billion under management, AV is the most active venture capital firm in Texas, and one of the most established in the nation. With a focus on business services, information services, computer and communications hardware, and enterprise software, Austin Ventures invests at all stages of company development, from $100,000 "planned experiments" to $50 million investments in management buyouts. Visit www.austinventures.com for more information.