ANDALE SECURES $41 MILLION TO ACCELERATE GROWTH IN WEB'S MOST PROFITABLE ECOMMERCE SEGMENT

New investors, board member, executive team rally around Andale's leadership in the new small business sales channel

Mountain View, Calif. – April 11, 2000 – Andale™, Inc., the company setting the standard with premium web-based business management solutions, today announced that it has closed a $41 million round of financing led by Bowman Capital to help drive the web's most profitable eCommerce segment – small business sales on online marketplaces such as eBay, Amazon.com, Yahoo!, and BigVine.com. Tarrant Venture Partners, a venture fund sponsored by the principals of Texas Pacific Group (TPG), also joins the list of new investors in Andale while existing Andale investors, including Accel Partners, Mohr, Davidow Ventures, Oak Hill Venture Partners and others, increased their investments. This financing reinforces the recent move by investors to back transaction-based business models in industries with proven profitability over those that are advertising or search engine-based.
Andale also announced today a new board member and three executive additions to its management team. Critical Path Founder and Chairman David Hayden, has joined Andale's Board of Directors, while Stephanie P. Schwartz now serves as Andale's vice president of finance and administration; Sharon Knight became vice president of customer service; and Tom Todaro took the role of chief strategy officer. Their charge: to maintain Andale leadership in the new small business sales channel.

"Small businesses selling through Internet marketplaces such as eBay, Amazon Auctions, and business-to-business (b2b) marketplaces such as BigVine are the most profitable businesses on the web right now, not the large web e-tailers," said Munjal Shah, CEO and co-founder of Andale. "That's why investors are rallying around Andale. We have a solid value proposition by offering powerful selling applications, tools and services to small businesses with the sole focus on helping them sell more, faster and with less effort."

Shah continued, "Unlike companies based on advertising or sponsorship driven services, Andale has built a transaction based business model that revolves around enabling small businesses to become even more profitable. The foundation of our business is that only if our customers are profitable, can we be profitable."

The New Small Business Sales Channel
Andale was the first company to identify the impact that small businesses were making on online marketplaces by realizing that 4% of eBay's registered users are responsible for 80% of its sales transactions. Andale discovered that online marketplaces are not consumer-to-consumer garage sales as previously perceived, but one of today's largest and most profitable small business sales channels.

Small businesses selling on Internet auction sites and other dynamic marketplaces is the true sweet spot on the Internet and it remains relatively untapped in terms of applications, tools and services aimed at making this community more profitable. Based upon eBay's Q4 earnings report these 4% of users conducted $2.8 billion in sales last year, up 192% over the year before. Vern Keenan of Keenan Vision, an independent analyst organization that tracks the eCommerce marketplace, predicts that the value of goods and services sold by small businesses over Internet marketplaces will be $1.2 trillion in 2004.

Online marketplaces are not only a large sales channel but also a highly profitable one. According to recent user surveys, Andale's small business sellers are making on average more than 40% gross margins and they are turning online selling into their primary source of revenue in less than three months.

"Clearly, this is one of the fastest growing and most profitable eCommerce segments today, and one that Andale is actively helping to build," Shah added. "Since we made Andale's Auction Business Management Service available to sellers in November 1999, the company has seen phenomenal growth – upwards of 100% per week increases in user base and transaction volume. Our small business sellers tell us that by using Andale, they are selling up to three times the merchandise in a fraction of the time and effort it previously took them."

Investors, Industry Leaders Choose Andale

Bowman Capital, a premier Silicon Valley investment firm, specializes in investing in expansion-stage technology companies.

"Andale's business opportunity is one of the most promising our firm has seen this year," said Matthew Cowan, a general partner at Bowman Capital. According to Cowan, Andale's customers represent the highest-volume small business sellers on the Internet. "Andale already has a strong hold in a small business market that is just starting to take off. This is definitely a company and management team that can go the distance."

Critical Path's Hayden commented, "Once in a while, everything lines up – customer requirements, industry trends, market forces, technology innovation – and a company emerges, almost overnight, that is perfectly positioned for leadership. This is what I see happening to Andale. They are leveraging the tremendous growth of public online marketplaces and eCommerce, and giving small businesses the most direct route to making money in this emerging forum. I am excited to be a part of this company."

"Andale has identified and developed a unique approach to enabling small businesses to manage their online sales," said Gene Frantz, partner at Tarrant Venture Partners and Texas Pacific Group. "As more small businesses recognize that auction sites and other dynamic online marketplaces truly represent the new sales channel, the demand for Andale's services will grow dramatically. We are excited to support Andale in their next phase of growth and look forward to participating in the company's future success."

New Andale Executives Take Charge

Three new additions to Andale's management team focus on helping Andale serve the most successful eCommerce segment on the web – small businesses selling on online marketplaces.

• Stephanie P. Schwartz, Vice President of Finance and Administration
  Schwartz is responsible for all business activities, transactions and events related to Andale's revenue growth. In one of her first assignments at Andale, she has been instrumental in securing this latest round of financing. Prior to joining Andale, Schwartz served as vice president and corporate controller for Informix Software, where she was part of the management team that helped restore Informix to financial health. She also held a variety of senior financial positions at Tandem Computers where she helped multiple functions optimize their business models.
• Sharon Knight, Vice President Customer Service
  Knight is charged with ensuring Andale continues to provide high levels of customer service and stellar customer programs, designed to maintain and expand the current loyal customer base. Before joining Andale, Knight led customer services for Microsoft's WebTV division. Prior to Microsoft she held numerous leadership positions for top technology companies including Lotus Development Corporation and Hewlett Packard, where she played a key role in the development of these companies' customer service and customer management programs.
• Tom Todaro, Chief Strategy Officer
  Todaro is responsible for helping Andale continue to differentiate its service offering and uncover new and innovative ways to help small businesses become even more profitable. Previously, Todaro was founder and vice president of corporate development at Hardware.com, the top Internet destination for home improvement solutions, where he was instrumental in establishing the company's leadership. He has also served as CEO and president of Targeted Growth, Inc., an agricultural-biotech company.

Shah added, "Andale welcomes its new investors, new executive team members and David Hayden, a true Internet visionary, to our Board of Directors."

About Andale

Andale (Ahn-du-lay) app.vendio.com is the first Web-based Auction Business Management service for online sellers that makes it possible to sell twice as much merchandise, on multiple markets such as eBay™, Amazon.com™ Auctions, Yahoo!™ Auctions and others, with half the amount of time and effort. Andale offers a best-of-breed resource for automating and managing all aspects of online selling – from product merchandising, to inventory and financial management, to customer communications and supplier sourcing – on multiple Net markets. Andale has received financing from Bowman Capital Management, Texas Pacific Group's (TPG) Tarrant Venture Partners, Accel Partners, Mohr Davidow Ventures, Oak Hill Venture Partners and other angel investors. For more information call, 1-800-450-7515 or visit app.vendio.com.

About Bowman Capital

Bowman Capital, a premier Silicon Valley investment firm, specializes in both public and private technology growth companies. The firm currently manages more than $5 billion in assets. Bowman Capital's investment philosophy is based on intensive, fundamental research on companies in the semiconductor, enterprise software, communications, networking industries and the Internet. Bowman Capital's private equity portfolio consists of more than 47 companies, including Arrowpoint Communications, Asera, Broadbase Software (BBSW), Ventro Corp (VNTR) and Sycamore Networks (SCMR). Bowman Capital was founded in 1995 and is based in San Mateo, California. For more information visit www.bowmancapital.com.

About Tarrant Venture Partners

Tarrant Venture Partners, L.P. is a venture fund sponsored by the principals of Texas Pacific Group, a private equity investment firm founded by David Bonderman, James G. Coulter and William S. Price, III in 1993. Texas Pacific Group and its affiliated partnerships have aggregate committed capital of more than $7.0 billion. Tarrant Venture Partners has completed over 25 investments in technology and telecommunications. Texas Pacific Group investments in technology and telecommunications companies include: Convergent Communications, Inc., Interlink Group, Inc., DoveBid, Inc., FirstWorld Communications, Inc., Gemplus S.A., Star One, Advanced TelCom Group, ON Semiconductor, GlobeSpan Inc., and Zhone Technologies. Additionally, Texas Pacific Group has made significant investments in a broad range of other industries, including consumer products, healthcare, airlines, food and beverage, and oil and gas.