New York -- January 29, 2002 -- Covalent Technologies, Inc., the leader in enterprise solutions for the Apache Web server, today announced it has secured million in third-round funding. The funding round was led by Menlo Ventures, with key participation from former investors Sequoia Capital and Granite Ventures LLC (formerly H&Q Venture Associates LLC).

The new funds will be used to accelerate the company's growth in all business areas, including development of new enterprise management products, and will specifically be used to expand sales and marketing efforts.

In addition to the funding news, the company is also announcing significant new additions to its management team. Mark Brewer joins the company as vice president of field operations, with primary responsibility for sales. Additionally, the company is announcing the promotion of Aleks Rabrenovich to vice president of finance and operations and Jim Harter to vice president of professional services. With these additions, the Covalent management team now contains industry veterans at all key positions.

"We were thrilled to invest in Covalent Technologies," said Mark A. Siegel, general partner at Menlo Ventures. "We see obvious growth potential in their dominance of the Apache market, as well as future opportunity in their next generation products currently in development. They have two strengths that made them an attractive investment: their superior management products in a very large and important part of the Web applications stack and the strength of their management and engineering teams."

Covalent reached significant company milestones during 2001. Most notably the company developed and launched Enterprise Ready Server, a comprehensive enterprise solution that makes Apache more manageable, more reliable and more secure.

"Sequoia Capital is pleased to make a subsequent investment in Covalent Technologies," said Douglas Leone, general partner at Sequoia Capital. "Over the past year Covalent has delivered on the promise we saw at the time of our initial investment. Through their technology and management team they have achieved great customer traction. Covalent is continuing down the path to becoming a world-class enterprise software company."

"We've achieved a great deal over the last year," said John M. Jack, president and CEO of Covalent. "This additional funding from world-class investors will allow us to realize our vision of becoming the dominant software provider for IT operations groups."

Over the past year, Covalent has achieved considerable success selling to many Fortune 1000 enterprise customers. Besides developing Enterprise Ready Server, the company also enhanced its existing enterprise Apache products, partnered with leading software and hardware providers and refined and expanded its support and professional services offerings.

Management Addition

About Covalent Technologies, Inc.