Richard Irving (Silicon Valley)
(408) 776-3137
richard

January 6^th, 2000 – Pond Venture Partners Ltd., the only Silicon Valley-style venture fund to focus exclusively on early-stage technology investing in the UK and Europe, announced today that it had achieved its first successful exit. Conexant Systems, the world’s largest independent company focused exclusively on providing semiconductor products and systems solutions for communications electronics, today agreed to purchase Pond’s first portfolio company, Microcosm Communications Ltd. The all-stock transaction, which has been approved by the boards of directors of both companies, is valued at approximately $128 million, plus certain payments tied to future performance, for a potential total consideration of up to $180 million. Pond holds approximately 20% of Microcosm stock.

"Considering that Pond’s first fund closed in August 1998, we are delighted to deliver such rapid and sizable returns to our investors in such a short period," said Richard Irving, Chief Executive of Pond. "We also see this transaction as a big win-win for both Microcosm and Conexant."

Microcosm, a leading provider of analog integrated circuits for fiber optic communications, has grown from four to nearly 50 employees since Pond’s initial investment and counts among its customers such leading companies as AMP, Siemens, Lucent Technologies, Hewlett Packard, Sumitomo Electric, Nortel Networks, Matsushita, Mitel, Methode, Uniphase, and Bookham Technology.

"Despite Microcosm's technology leadership, blue-chip customer base and rapidly increasing sales, we were unable to generate any enthusiasm among existing UK venture funds," said Gary Steele, founder, Chairman and Managing Director of Microcosm. "Even our seed capital - apart from the founders’ own - came from Taiwan. When we first heard of Pond bringing the ‘Silicon Valley model’ to the UK, it was clear they would be the way to go. We found an instant rapport. If it had not been for Pond’s investment and advice we would never have been able to continue our approximately 300% per annum growth, nor would we have found such a strong partner as Conexant Systems."

"Early-stage venture capital investment in the UK remains small, yet we continue to see many high quality deals," said Charles Irving, Chairman of Pond. "This and the strong local talent pool convinces us that the UK and other European countries such as Ireland remain ripe for early stage venture investing. Pond intends to hold onto the leading edge of this trend by raising a second fund."

Pond Venture Partners Ltd. manages venture capital funds exclusively targeting early-stage technology companies in the UK and Europe. By working closely with founders and management to add value to its companies, through customer introductions at senior levels, helping establish US and Japanese operations, and managing subsequent venture rounds, Pond is bringing Silicon Valley-style venture capital to Europe. With offices in London, Silicon Valley and Tokyo, Pond has made four UK investments and one in Ireland, and has achieved one exit in less than 18 months of operation. Pond intends to close a new fund focused on early-stage European companies in the first quarter of 2000. Pond is regulated by IMRO. For more information please see our web site at http://www.pondventures.com.