Synacor Secures $6.5 Million In Funding From Access Technology Capital, Intel Capital, Rand Capital, And Other Existing Investors

Investment Will Allow Scaling of Synacor’s Premium Content Provisioning Platform to Meet the Needs of the Largest ISPs, MSOs and Telcos

March 25th 2003

BUFFALO, March 25, 2003 — Synacor, the leader in premium content and services provisioning for Internet access providers, today announced that it has secured $6.5 million in Series C funding. New investors Access Technology Capital, LLC, Intel Capital and Rand Capital (NASDAQ: RAND) joined Synacor’s early investors, Walden International Investment Group and Crystal Venture Capital, in the round. Synacor provides ISPs, MSOs and telcos with a complete, private label solution for selling tiered, premium content and services subscriptions along with connectivity. Synacor has announced content sublicensing agreements with FOXSports.com, CinemaNow and Experian Consumer Direct, among others.

Synacor will use the new funding to continue the strategic expansion of its customer base to larger MSOs and telcos looking to leverage the growing market for paid premium content and services. Susquehanna Communications and FairPoint Communications have announced that they will begin offering premium content subscriptions provided by Synacor to their customers in the coming weeks.

“We are seeing a rapid evolution in the Internet marketplace wherein access providers have an opportunity to really "own" their subscribers by providing them with the rich content and services they desire, rather than simply being commodity pipelines,” said Ron Frankel, president and CEO of Synacor. “Synacor enables access providers with a complete solution for quickly leveraging this opportunity. With this new capital we will be able to tailor our product offering to meet the needs of even the largest high speed providers.”

“Today’s consumers want easy access to rich digital media content on their PCs,” said Hassan Miah, managing director of Intel Capital’s media and entertainment investments. “We believe that companies, like Synacor, that provide a range of premium online entertainment content and services, within a framework that enables easy access for consumers, will help accelerate broadband adoption and drive demand for high performance PCs.”

Synacor’s end-to-end solution, Portelus™, includes a wide menu of licensed content, an integration and unification system, and a brandable and customizable portal framework. The Portelus technology platform enables the integration of both video and non-video content and services from multiple providers and enhances the consumer experience by providing unified registration, single sign-on and one monthly bill through their ISP. Using the Portelus platform, access providers can customize their offerings into different subscription tiers and bill for content access along with their monthly service charge, much like the cable TV industry.
Portelus Premium Service Edition™ offers Synacor licensed content and the Portelus delivery platform to access providers who already have a portal in place.

Synacor provides a growing library of content for subscriptions, including Fox Sports videos and online games, content from Walt Disney Internet Group, CinemaNow video-on-demand services and Experian Consumer Direct credit report services, among others. The company also offers basic third-party applications such as search, yellow pages, directions, stock quotes, weather and horoscopes, in addition to Synacor’s messaging and time management applications.

According to analysts, the overall U.S. Internet services market will be driven primarily by value-added services. According to the Online Publishers Association, U.S. consumers paid approximately $1.3 billion for online content in 2002. Jupiter expects that number will grow to $5.6 billion by 2006.

About Synacor
Synacor (www.synacor.com) brings the cable television model to the Internet by enabling access providers to offer basic and premium content subscription packages to their customers in a compelling and easy-to-use manner. The company’s end-to-end solution helps narrowband, broadband and wireless access providers to quickly deploy these value-added services and recognize an immediate positive impact on customer retention and revenues per subscriber. Synacor’s Portelus platform delivers the combined strength of a flexible, brandable Internet portal framework, a robust provisioning engine, a unified back end, and a menu of standard and premium content from the industry’s top providers. With offices in Buffalo, New York and Los Angeles, Synacor powers a national network of customers.

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