Smooth-Stone Secures $48 Million to Complete Development of Semiconductors for Servers, Data Centers

Unique Syndicate of Chip Industry Leaders and Venture Capital Firms Back Smooth-Stone, Help Company Take Data Center Performance to New Heights with Cell Phone-like Power Consumption

Austin, TX, August 16, 2010 – Smooth-Stone today announced it is raising $48 million from a unique syndicate of investors comprising industry leading venture capital firms and semiconductor innovators. The capital will be applied directly to the final development and market delivery of high performance, low power chips that will change the server market and the makeup of data centers. Smooth-Stone funding partners include ARM, Advanced Technology Investment Company (ATIC), Battery Ventures, Flybridge Capital Partners, Highland Capital Partners and Texas Instruments Inc.

“This kind of investment, the amount, and the strength of this syndicate is a strong endorsement for the innovation we are bringing to market,” said Smooth-Stone CEO Barry Evans. “We look forward to taking advantage of the insights and know-how of these industry-leading investors.”

Power consumption matters more than ever. Smooth-Stone will bring the low-power virtues of mobile phone technology to servers and data centers. Its semiconductors and software will provide a solution for companies where energy consumption by servers has become a constraining and expensive issue by increasing the density of computer resources while significantly conserving energy, cooling and space in the data center. Smooth-Stone customers will have new, unseen options as they plan their future server deployments.

“Our goal is to completely remove power consumption as an issue for the data center. Imagine that change for companies with a large presence on the Internet,” added Evans. “They all deal with the reality that as the mass of information grows daily, so does their power consumption. Every day these companies are thinking about managing their data center sprawl. We want to make sure that space and power are not constraining their potential.”

“The necessity of finding more energy efficient server solutions for data centers has created an enormous and truly revolutionary opportunity for the industry,” said Battery Ventures General Partner, Ken Lawler. “As a firm, we recognized from the beginning that Smooth-Stone had the innovative technology, the customer value proposition and the engineering and management capability to disrupt the web server landscape. Working with management, we’ve put together a unique investment structure and syndicate of both strategic and traditional venture capital investors that gives the company what it needs to succeed in this highly competitive market. Smooth-Stone has a very bright future and we’re thrilled to be part of this investment.”

Semiconductor investment has traditionally required a unique skill set and discipline, the importance of which has only been amplified by the recessed economy. The Smooth-Stone investor syndicate offers a strong collection of previous successes in the semiconductor industry including companies such as Advanced Analogic, Cimaron, Ikanos, MaxLinear, PA Semi, Sigmatel and SiTera and will actively support the company in its mission to redefine the server market and data center performance.

“ARM invests in companies that are taking innovative approaches to solving industry challenges. Smooth-Stone’s approach of bringing low power technology into the server domain made them a perfect fit for our investment model,” said Bruce Beckloff, vice president of corporate business development, ARM. “There is a strong market need for a new class of data center platforms that offer a significant improvement in performance from both the energy and density perspectives, and ARM is excited to support Smooth-stone’s efforts to develop innovative chip solutions for this new class of platforms.”

With this investment, ARM continues its seat on the Smooth-Stone board of directors, along with Evans and an independent, Howard Bubb. The three VCs, Battery Ventures, Flybridge Capital Partners and Highland Capital Partners, and ATIC, also join the board.

The Smooth-Stone board now comprises:

Smooth-Stone, Barry Evans, CEO

• ARM, Tom Lantzsch, Executive Vice President, Corporate Development
• ATIC, Daniel Durn, Executive Director
• Battery Ventures, Ken Lawler, General Partner
• Flybridge Capital Partners, David Aronoff, General Partner
• Highland Capital Partners, Sean Dalton, General Partner
• Howard Bubb, semiconductor industry executive

About Smooth-Stone

Founded in January 2008, Smooth-Stone brings unseen performance density to the data center on a very attractive power foot print by leveraging ultra-low power processors as used on mobile phones, as a foundation for its revolutionary technology. Smooth-Stone will make it possible for data center managers to increase the density of their computer resources while significantly reduce need for power, space and cooling. At the same time, Smooth-Stone technology will contribute to the reduction of the CO2 footprint of the data center in a significant way. More about Smooth-Stone can be found at www.smooth-stone.com.

About ARM

ARM designs the technology that lies at the heart of advanced digital products, from wireless, networking and consumer entertainment solutions to imaging, automotive, security and storage devices. ARM’s comprehensive product offering includes 32-bit RISC microprocessors, graphics processors, video engines, enabling software, cell libraries, embedded memories, high-speed connectivity products, peripherals and development tools. Combined with comprehensive design services, training, support and maintenance, and the company’s broad Partner community, they provide a total system solution that offers a fast, reliable path to market for leading electronics companies. Find out more about ARM at: www.arm.com.

About ATIC

The Advanced Technology Investment Company (ATIC) was created in 2008. A technology investment company wholly owned by the Government of Abu Dhabi, ATIC is focused on making significant investments in the advanced technology sector, both locally and internationally. Its mandate is to generate returns that deliver long-term benefits to the Emirate of Abu Dhabi.  ATIC seeks to leverage the unique advantages it enjoys as an investor from the Emirate of Abu Dhabi to identify and realize long-term investment opportunities in the highly competitive and capital-intensive advanced technology sector. These advantages include significant and reliable capital, a patient investment philosophy, and a subsequently long-term investment horizon.  For more information visit www.advancedtechnologyic.com

About Battery Ventures

Since 1983, Battery has been investing in technology and innovation worldwide. The firm partners with entrepreneurs and management teams across technology sectors, geographies and stages of a company’s life, from start-up and expansion financing, to growth equity and buyouts. Battery has supported many breakthrough companies around the world, including: Advanced Analogic Technologies (NASDAQ: AATI), Lara Networks (acquired by Cypress Semiconductor) MaxLinear (NYSE: MXL), Sigmatel (NASDAQ: SGTL). Its current portfolio includes emerging and more established firms such as Amalfi Semiconductor, Angie’s List, Anobit, Bazaarvoice, Exact Target, GreenBytes, Groupon, Opscode, Optichron, ITA Software and Zenverge. From offices in Boston, Silicon Valley and Israel, Battery manages nearly $4B in committed capital, including its current fund of $750M. For more information, visit www.battery.com.

About Flybridge Capital Partners

Flybridge Capital Partners is an early-stage venture capital firm whose mission is to assist entrepreneurs in growing innovative, global companies. With $560 million under management, the firm is focused on investing in consumer, energy, healthcare and information technology markets and is led by a team with domain expertise and more than half a century of combined experience in venture capital. www.flybridge.com.

About Highland Capital Partners

Highland Capital Partners was founded with the mission of helping great people build great companies. For over twenty years, the firm has taken a sector-focused approach to investing in exceptional healthcare, internet & digital media and technology companies. With $3 billion of committed capital and offices in Boston, Silicon Valley, Shanghai and Geneva, Highland has invested in and worked to create such firms as Ask Jeeves, Avid Technology, CheckFree, Conor Medsystems, lululemon athletica, Lycos, MapQuest, Navic Networks, New York Times Digital, Ocular Networks, P.A. Semi, Quattro Wireless, Quigo, Staples.com, Starent Networks, Sybase, Telica and VistaPrint. For more information, visit Highland’s web site at www.hcp.com.

About Texas Instruments

Texas Instruments (NYSE: TXN) helps customers solve problems and develop new electronics that make the world smarter, healthier, safer, greener and more fun. A global semiconductor company, TI innovates through design, sales and manufacturing operations in more than 30 countries. For more information, go to www.ti.com.