Damballa Raises $12 Million In Funding To Fight Botnets

PRESS RELEASE

ATLANTA –February 11, 2011 – Damballa Inc., the company transforming the fight against cyber threats, announced today that it has received $12 million in new equity funding to further extend its technology leadership position and capitalize on the growing global demand for its solutions for advanced malware and targeted cyber attacks.

The new investor, Paladin Capital Group, is joined in this new equity round by existing investors Sigma Partners, Palomar Ventures, InterWest Partners, GRA Venture Fund, Imlay Investments, and Blumberg Capital,each adding to their equity stake in the company. Philip Eliot, Principal, Paladin Capital Group, will join the Damballa board.

“The advanced and persistent nature of recent targeted cyber attacks has outpaced all existing security defenses for most private and public sector network security teams,” said Eliot. “Damballa is the clear leader in cyber threatsecurity solutions for enterprise and service provider networks and has experienced rapid growth due toits innovative solutions and world-recognized threat research team. We are excited about the significant growth potential for Damballa in its existing markets and its innovative plans to protect cloud and public sector networks from cyber threats and abuse. We are proud to join the dynamic and experienced executive management team that Damballa has assembled.”

Damballa provides cyber threat solutions for enterprise, ISP and telco networks. Damballa solutions detect and terminate criminal activity associated with targeted attacks, as well as botnets and advanced malware that conduct fraud, engage in industrial espionage, and steal corporate data and customer credentials.

“We are excited about the proven investment track record and public sector exposure Paladin brings to Damballa,” said Val Rahmani, CEO of Damballa. “Our customers are among the largest, most respected brands in their industries, and the advanced protection they count onfrom Damballa has resulted in a 100 percent renewal rate. As more network activity shifts to mobile devices and the cloud, Damballa is leading the market in protecting these networks from cyber attacks and targeted threats. This latest round of funding will help us capitalize on the enormous growth opportunity and global market demand for our solutions,and enable us to expand our research and engineering efforts to extend our leadership position.”

About Paladin Capital Group Headquartered in Washington, D.C., Paladin Capital Group is a leading multi-stage private equity firm providing capital for growing companies whose principal business centers on products and services that address homeland security issues and needs. Paladin has over $950 million dollars of committed capital across multiple funds and 36 portfolio companies. http://www.paladincapgroup.com

About Damballa Damballa is a pioneer in the fight against cybercrime. Damballa provides the only network security solution that detects the remote control communication that criminals use to breach networks to steal personal and intellectual information, and conduct espionage or other fraudulent transactions. Patent-pending solutions from Damballa are platform and system-agnostic, protecting networks with any type of device including PCs, Macs, smart phones, as well as mobile and embedded systems. Damballa customers include Fortune 1000 companies, Internet and telecommunications service providers, government agencies and leading universities. Privately held, Damballa is headquartered in Atlanta. http://www.damballa.com