SEPATON Secures $15.5 Million Funding Round Led by Focus Ventures

MARLBOROUGH, MA — April 6, 2009 — SEPATON, Inc., the leader in enterprise-class VTL and data duplication solutions, today announced that it has closed a new round of funding, securing $15.5 million in series F financing.  New investor Focus Ventures led the round while existing investors, Jerusalem Venture Partners (JVP), Menlo Ventures, Valhalla Partners, and HarbourVest Partners all participated.

"Today's challenging economic environment makes deciding which companies to invest in more difficult than ever," said Kevin McQuillan, general partner and cofounder at Focus Ventures. "We've been closely watching the growth of enterprise-ready, data protection and SEPATON is well positioned as the market leader. We are impressed by SEPATON's revenue traction, unique product architecture, broad market appeal, and unwavering dedication to product excellence and customer success."

SEPATON's strong support by the investment community comes as it has experienced record performance across the board in all functional and financial areas of the company, exiting 2008 with the best quarter in the company's history.

The financing will be used to position SEPATON for continued growth as the leader in meeting the challenges of protecting the world's most data intensive enterprises. With over 1300 customers and 100PB under management, SEPATON solutions deliver maximum value to solve the critical business problems of data protection, enabling significant IT cost savings, and capital efficient scalability with the industry's most impressive ROI results.  SEPATON's unique scale-out architecture allows efficient capacity and performance growth, protecting up to petabytes of data in a single system. SEPATON's S2100®-ES2 virtual tape library with DeltaStor® deduplication software offers the fastest backup and restore rates in the industry, unparalleled manageability, and industry-leading data deduplication.

"We are especially pleased under the current market conditions to have secured a new favorable round led by such a quality venture firm like Focus Ventures.  Reinvestment in the company from the existing investors also demonstrates their continuing support in our team, technology, business vision and the overall market opportunity for serving enterprises with large data volumes and complex backup environments," said Mike Worhach, president and CEO, SEPATON, Inc. "SEPATON is the only disk-based, data protection company with a scale-out architecture built to exceed the performance and scale requirements of the most data intensive organizations."

"SEPATON's ability to raise such a substantial round in the current climate validates its dominance in the data protection space," said Erel Margalit, founder and managing partner of JVP, SEPATON's lead investor.  "I believe that under Mike's leadership and with the support of Focus and the existing investors, SEPATON is poised to become one of the most significant emerging companies in the storage space," he added.

SEPATON's funding round comes at a time when overall venture capital financing is slowing down dramatically due to the economic downturn.  SEPATON, however, has attracted a new top-tier investor with participation from all previous parties with a compelling, straightforward value proposition for using scalable, high-performance software to drive down the overall cost and risk of protecting enterprise data.  Now more than ever, businesses are making only the most prudent IT purchases and are turning to solutions that reign-in costs and provide immediate and measurable value.

About SEPATON, Inc.
SEPATON helps enterprises reduce risk and improve operational efficiency in the data center with the industry's fastest, most scalable virtual tape library and data deduplication solution. Built on our patented ContentAware architecture, SEPATON products enable enterprises to consolidate and protect information by deduplicating, backing up and restoring petabytes of data at wire speed without disruption to their existing infrastructure. We combine these products with proven methodologies and in-depth services expertise to deliver a measurable return on investment. For additional information call 866-SEPATON or visit http://www.sepaton.com.

Contact:
Beth Winkowski
SEPATON, Inc.
978-649-7189
bwinkowski@sepaton.com

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SEPATON, SRE, S2100, DeltaStor, Site2are registered trademarks of SEPATON, Inc. ContentAware and Scale-Out Deduplication are trademarks of SEPATON, Inc.  All other brand and product names are or may be trademarks of their respective owners.

1 Profitability is measured on a non-GAAP pro forma basis.