Princeton Optronics, Inc. Secures $25 Million to Scale Production of High-power Tunable Laser

St. Paul Venture Capital, Investor Growth Capital, Technology Venture Partners, Novak Biddle Venture Partners, and Intel Capital Fund Optical Components Pioneer

PRINCETON, NJ. Princeton Optronics, Inc., an innovator in active components for fiber-optic networks, today announced that it has closed a second round of financing in the amount of $25 million.

Co-led by Investor Growth Capital and St. Paul Venture Capital, this latest funding round also includes investments from Technology Venture Partners and first round investors, Novak Biddle and Intel Capital. T his additional infusion of capital will fund the final development stage of Princeton Optronics PowerSweep 2000, a high-power, broadly tunable laser, along with the continued expansion of its world-class manufacturing facility. At the same time, the company will further scale operations in support of its 12.5 Gb/s receiver and modulator driver product lines.

"A bold step for the optical networking industry at large, Princeton Optronics has developed a truly compelling laser technology, said Bill Cadogan, General Partner at St. Paul Venture Capital. "The company s strategy is perfectly aligned with the needs of today s service providers, who are demanding a simpler, smarter network that is more flexible, reliable, manageable and cost effective. In contrast to legacy laser technologies, the Princeton Optronics solution satisfies this demand with a more aggressive cost model, while setting a new standard for performance. This is exactly the kind of breakthrough the industry has been waiting for.

"With its high performance product portfolio, proven leadership team and exceptional product development track record, Princeton Optronics is poised to make a very significant impact within the optical components industry, said Anna Nekoranec, Managing Director at Investor AB. "Over the last year, this team has developed three highly differentiated products. This new round of funding, coupled with more than six years of photonics research and development, solidifies the foundation from which this revolutionary company can flourish.

Leveraging the company s competencies in high-power Vertical Cavity Surface Emitting Laser (VCSELs), Micro Electro-Mechanical Systems (MEMs) and Radio Frequency (RF) technologies, Princeton Optronics offers a complete component product line to address the growing needs of equipment manufactures, who are challenged to deliver increasingly smarter networks in a cost-effective manner.

"We are thrilled to welcome our new investors and very pleased that Princeton Optronics has such a strong investment syndicate behind us, said Chuni Ghosh, founder and president of Princeton Optronics. "As a result, we are now in excellent position to augment our existing product portfolio with the introduction of PowerSweep 2000, the quintessential tunable laser. PowerSweep 2000 effectively addresses the call for high power, broad tuning, integrated wavelength stability and several additional customer requirements. At the same time, this high performance laser is based upon low cost, VCSEL and MEMs technology which enables Princeton Optronics to meet both the performance and cost objectives of today s optical networking equipment providers.

"Princeton Optronics approach to satisfying the needs of the tunable laser market using low-cost, manufacturable technology should give the company a strong position compared to competing solutions, said Christine Mulrooney, senior optical components analyst, Communications Industry Researchers. "If Princeton Optronics can deliver this product in volume the company will surely be a contender.

About Investor Growth Capital

Investor Growth Capital is a private equity advisory group wholly owned by Investor AB of Sweden. Investor AB is the largest industrial holding company in Sweden and was established by the Wallenberg family. Investor AB had net assets of approximately SEK 128 billion as of June 30, 2001. Investor Growth Capital has $1.8 billion in assets under management and offices in New York, Stockholm and Palo Alto. Investments are focused on technology and healthcare companies based in North America and Europe.

About St. Paul Venture Capital

St. Paul Venture Capital is one of the largest early-stage venture capital firms in the United States with $3.0 billion in committed capital and offices in Minneapolis, Boston and Silicon Valley. The firm, founded in 1988, invests primarily in the areas of Communications, Business Applications/Services, Consumer Technology, and Health Care. Additional information can be found at the firm s website at www.stpaulvc.com.

About Technology Venture Partners

Technology Venture Partners, L.P. (TVP) is a venture capital firm investing in early to mid-stage venture capital opportunities in networking, communications, and Internet infrastructure. TVP provides industry experience and strategic advice coupled with capital, expertise and relationships in the networking and communications area. TVP s strategy is to deliver value added insight, knowledge, and commitment to its portfolio companies through its extensive network of technology executives, advisors, and consultants. The principals of TVP have significant industry experience and have been involved in over $3 billion of financing for high growth technology companies. www.tvp.com.

About Novak Biddle Venture Partners

Novak Biddle Venture Partners is a leading early stage venture firm focused on the mid-Atlantic and Eastern Seaboard. Novak Biddle provides equity financing and assistance to the management of young information technology companies, and seeks business situations where the combination of ideas, dollars, experience, and relationships can create long term, sustainable value. For more information, visit www.novakbiddle.com.

About Princeton Optronics

Princeton Optronics, Inc., a privately-held company based in Princeton, N.J., is powering the optical frontier with its high-power VCSEL and RF technologies. Delivering both high-power and high-speed products, Princeton Optronics is positioned to meet the stringent demands of carrier-class service providers at 10 Gb/s and beyond. For more information about Princeton Optronics, please call 609/584-9696 or visit www.princetonoptronics.com.

Formerly incorporated under the name Princeton Electronic Systems (PES), Princeton Optronics originated in 1993 as Founder Chuni Ghosh departed Sarnoff in pursuit of his entrepreneurial ambitions. PES established its roots in RF-microwave engineering through the commercial development of its Voltage Controlled Oscillator (VCO) and Synthesizer product lines.

PES worked closely with organizations such as the Department of Defense, Department of Energy, DARPA and NASA to establish expertise in high performance fiber-optic and microwave technologies through the successful execution of numerous SBI research and development contracts. The company was re-named Princeton Optronics in 2000 to reflect its core contributions in optical component technology.

Contact:

Merritt Group, Inc.
Zail Dugal
703/556-6300 x147
dugal@merrittgrp.com