Gracenote Closes $13M Round of Funding, Led by Bessemer Venture Partners

Market Wire, 20050229

Gracenote®, the worldwide leader in information services for digital music and media, today announced that it has closed its series D round of funding totaling $13 million. Led by Bessemer Venture Partners, existing investors Sequoia Capital, Scott Jones and Steve Simon also participated in the round. The funding will be used to accelerate product and infrastructure growth for the company in several key areas, including staff and new product development. It will enable the company to meet the growing needs of its existing blue-chip customers and to capture the many opportunities presented by the digital entertainment market. Simultaneous to this funding, the company appointed Jeremy Levine, Principal for Bessemer Venture Partners, to Gracenote's Board of Directors.

"Several factors indicate that Gracenote is closing-in on a tremendous opportunity: The growth of the Company's core business, an accelerating interest in digital media in every major market in the world, and the increasing number of applications for Gracenote's patented technology, products and services in the digital media marketplace," stated Jeremy Levine, Principal for Bessemer Venture Partners. "Given its market leadership, one-of-a kind technology and intellectual property portfolio, the timing is perfect for Gracenote to play a major role in the future of digital entertainment -- one of the fastest growing markets globally."

"This is an important milestone for the company that will enable us to take our business, infrastructure and technology offering to the next level; positioning us to best serve our market-leading customers and to capitalize on exciting trends in the digital music industry," stated Craig Palmer, president and CEO for Gracenote. "We're extremely pleased to add Jeremy to our board -- giving Gracenote one of the oldest, most established VC firms as a partner."

"This is a strategic investment that will strengthen and build on Gracenote's core products and assets, assuring the company a position of growth and success in the burgeoning digital entertainment market," said Sameer Gandhi, Partner for Sequoia Capital.

Gracenote's technology was developed to make digital music and entertainment easier to enjoy by providing fundamental metadata services, such as music identification, automatic file formatting and cleaning, automatic playlists and links to related content. These products provide critical functionality for several, multi-billion dollar industries: Home, car and portable entertainment products; mobile entertainment and data services; digital music services, and PC media software. Gracenote estimates its products were included in over 150 million shipped units in 2003, growing to over 200 million in 2004. Earlier this year, the company launched Gracenote VideoID to provide metadata services for creating, organizing and enjoying DVD libraries.

About Gracenote

Gracenote® is the worldwide leader in information services for digital music and media. Headquartered in Emeryville, California, with offices in Tokyo and Berlin and reseller agreements in Seoul and Paris, Gracenote provides a suite of integrated software and services that enable consumer electronics manufacturers and software developers to provide the best in digital entertainment. Globally, over 30 million users each month rely on Gracenote to provide an enhanced music listening experience.

Gracenote's information services are used by leading consumer electronics manufacturers including Alpine, Clarion, D&M Holdings, Digion, Fujitsu Ten, JVC, Gibson Audio, Kenwood, Matsushita, Onkyo, Panasonic, Philips, Pioneer, RCA, Rockford Fosgate, Samsung, Sanyo, Sharp, Sony , TDK and Yamaha; as well as leading media players including AOL's WinAmp, Apple's iTunes and RealNetworks' RealPlayer. For more information about Gracenote, go to www.gracenote.com/corporate/.

About Bessemer Venture Partners

Bessemer Venture Partners carries on one of the longest-standing private venture capital operations in the country. With more than a billion dollars under management, BVP has almost a century's experience of investing in and helping to build innovative, high-growth companies. Many leading innovators, including Parametric Technology, Ciena, VeriSign, Staples, Sonus Networks, and Gartner, selected BVP as their early-stage venture partner. BVP has offices in the nation's top technology markets -- California, Massachusetts, and New York.

Media Contact: Kathryn Shantz P: 510.547.9680 Ext 302 C: 415.350.3518 kshantz@gracenote. com