ClariPhy Announces $24 Million Investment, New Strategic Alliances

Funding, OEM Partnerships Lay Foundation for Rapid Growth in 10G/40G/100G Optical Networking ICs

IRVINE, Calif., May 26, 2010 -- ClariPhy Communications, a leader in ultra high speed mixed signal, digital signal processing (MXSP) integrated circuits for optical networks, today announced that it has secured $24M in series C funding. The financing includes new strategic investors -- Oclaro, Inc., a tier-one provider of optical communications and laser components, and multiple telecom OEMs. All ClariPhy's existing venture investors participated in this round, including Norwest Venture Partners, Allegis Capital, ONSET Ventures, and Pacific General Partners.

ClariPhy will use the funding to deliver a new class of single chip MXSP ICs that significantly increase an optical network's reach and tolerance to impairments (such as chromatic dispersion, polarization mode dispersion and fiber nonlinearity), while reducing cost of ownership for both OEMs and Service Providers. The company's line of 10G, 40G and 100G networking chips are based on advanced MXSP schemes such as Maximum Likelihood Sequence Estimation (MLSE) and Coherent Detection that approach the limits of achievable performance. ClariPhy's implementation of these schemes in 40 nm single-chip CMOS enables equipment designers to reduce cost and power by integrating multiple system functions into customized System on Chip (SoC) solutions.

Driving demand for these MXSP ICs is the growing adoption of a variety of new broadband services from video and social networking to voice-over-IP and cloud computing. With analysts predicting that network traffic will grow by more than 40% annually over the next five years, network operators are rapidly migrating from 10G to 40G transmission rates and beyond.

"We are honored to have such a quality group of investors participate in our financing," said Dr. Paul Voois, cofounder and CEO of ClariPhy. "As transmission rates increase, network equipment designers need low-cost, low-power solutions that extend reach and minimize signal impairment across high performance networks. This funding will enable us to deliver the MXSP technology that addresses their needs. Our new partnerships with Oclaro and others open up exciting opportunities to gain insight into customer problems, integrate our innovative technology into new ASIC and SoC applications, and generate significant new revenue streams."

Strong endorsement

Reflecting the tremendous potential of ClariPhy's MXSP technology, a significant portion of the funding announced today came from the company's new strategic partners. Oclaro, a leading supplier of optical components for 40G regional and metro networks, will use ClariPhy's technology to expand into the 100G Coherent Long Haul and Ultra Long Haul markets. "As optical networks rapidly move toward 100G, the importance of DSP and mixed-signal ICs increases," noted Alain Couder, CEO of Oclaro, Inc. "By investing in and partnering with ClariPhy, we believe we can offer our customers best-in-class electronics and optical technology as a complete solution."

The two firms have a history together. In 2009 Oclaro used ClariPhy's MLSE IC to boost the performance of its TL9000 transponder for 10G networks.

ClariPhy's existing venture investors view this round of funding as a major stepping stone for the company. "The management team's history of consistently delivering market leading ICs and securing blue chip customer strategic support speaks to their ability to solve real problems for their customers," said Robert Abbott, general partner at Norwest Venture Partners. "We believe they have an exciting funnel of products that have the potential to become the industry standard and generate significant revenue."

About ClariPhy -- ClariPhy Communications, Inc. is a fabless semiconductor company developing mixed signal, advanced digital signal processing ICs targeting 10, 40, and 100 Gbps networks in enterprise backbone, enterprise data center and telecom environments. ClariPhy's ICs enable IT and network management to significantly improve network performance and lower cost. ClariPhy's investors include Norwest Venture Partners (NVP), Onset Ventures, Allegis Capital and Pacific General Ventures. ClariPhy is headquartered in Irvine, California with offices in Los Altos, California and Cordoba, Argentina. For more information, please visit http://www.clariphy.com.

About Oclaro -- Oclaro, Inc. is a Tier 1 provider of optical communications and laser components, modules and subsystems for a broad range of diverse markets, including telecommunications, industrial, scientific, consumer electronics and medical. Oclaro is a global leader dedicated to photonics innovation with cutting-edge research and development (R&D) and chip fabrication facilities in the U.K., Switzerland and Italy and in-house and contract manufacturing sites in the U.S., Thailand and China. To support its diverse and global customer base, Oclaro maintains design, sales and service organizations in each of the major regions around the world. For more information visit http://www.oclaro.com.

About Norwest Venture Partners (NVP)

Norwest Venture Partners (NVP) is a global venture and growth equity investment firm that manages more than $3.7 billion in capital. It has offices in Palo Alto, California, Mumbai and Bengaluru, India and Herzelia, Israel. NVP makes early to late stage venture and growth equity investments in U.S. and global companies across a wide range of sectors including: information technology, business services, financial services, technology enabled services and consumer. NVP has actively partnered with entrepreneurs to build great businesses for more than 49 years and has funded over 450 companies since inception. For more information, please visit www.nvp.com.

For more information, visit our website at www.clariphy.com.