Azure Capital Partners and Bridgescale Partners Complete Buyout of NeoNova Network Services

RALEIGH, N.C., March 12 /PRNewswire/ -- Azure Capital Partners and Bridgescale Partners announced the spinout of NeoNova Network Services from Digitel, Inc. Terms of the transaction were not disclosed. Azure Partner Ray Carey and General Partner Paul Weinstein and Bridgescale General Partners Rob Chaplinsky and Matthew Cowan will join current CEO Warren Lee on NeoNova's board of directors.

NeoNova is the leading Internet service provider serving the U.S. rural telephone and cable service providers. NeoNova provides Internet services, data hosting, email, spam and virus filtering, web design and storage, customer care and billing services to over 60 independent communication service providers.

"With the divestiture complete and the new ownership structure in place, NeoNova is better positioned than ever to expand our product and service offerings to existing customers and to grow our customer footprint nationwide," said Warren Lee, CEO of NeoNova. "We are excited with what we have achieved to date but the prospects for the future are even brighter. Given the experience and investment success that both Azure and Bridgescale have achieved in the telecommunications industry, we are looking forward to the strategic value that they both will add as our business continues its growth."

Lee continued, "We have an unprecedented opportunity to bring a breadth and quality of world-class services to our customers not before seen in this market. We will be able to leverage the experience our new owners have had in serving outstanding companies like Calix, Proofpoint, and World Wide Packets."

Ray Carey, Partner at Azure Capital Partners, who joined the board of directors in conjunction with the acquisition, said, "Warren and his team have done an outstanding job building a fast growing, profitable business. Going forward we see the opportunity to change the game of communications services in much the same way that software as a service has already transformed the enterprise software market. We believe that NeoNova has the platform, the leadership team, and the vision to expand its managed service offerings across multiple customer sets and geographies."

Rob Chaplinsky, of Bridgescale Partners, said, "We are delighted to be investors in NeoNova and look forward to providing the necessary capital, strategic advice, and business relationships into the company so that NeoNova can become the obvious ISP of choice for any independent communication service provider."

Alongside Azure and Bridgescale, Hercules Technology Growth Capital participated in the investment as well.

About NeoNova Network Services, Inc.

NeoNova is a nationwide provider of ISP, ISP back office services, as well as a leading provider of VoIP, IP Engineering, and IPTV integration and managed services. Through innovation and integration, NeoNova strives to provide the tools and services that will enable rural ILECS to conveniently and profitably transform their operations for the IP world of tomorrow. More information is available at http://www.neonova.net.

About Azure Capital Partners

Azure Capital Partners is a venture capital firm with over $650 million under management, headquartered in San Francisco, California. Its goal is to identify, invest in and help build earlier stage information technology companies that are at the forefront of a transformative opportunity for growth -- companies like TopTier Software, VMware, WorldWide Packets and Bill Me Later. Its partners have a long track record of identifying and helping to build some of the most successful companies in communications, software and related technology segments. The Azure team is recognized for industry thought leadership and a unique professional investment approach to venture investing. Its proven methodology and primary research enable it to identify young companies in attractive markets whose business models provide sustainable competitive advantage. For more information, visit http://www.azurecap.com.

About Bridgescale

Bridgescale is a venture capital firm based in Menlo Park, California. Bridgescale invests in scalable technology businesses with an investment focus ranging from venture-backed startups to public and private company divestitures. The Bridgescale team leverages a combination of investing, operating and strategic advisory experience, as well as an extensive network of global contacts, to help its portfolio companies scale. The team has a successful track record having invested in more than 25 companies that went public and 40 companies that were acquired. Some examples of category leaders in Bridgescale's portfolio include Proofpoint, the leading independent messaging security company, and Cortina Systems, to which Bridgescale provided capital for its buyout of Intel Corporation's optical network components business. The Bridgescale team is active across a broad range of technology sectors such as consumer Internet, digital media, semiconductors, communications hardware, software and related services. For more information, please visit Bridgescale's Web site at http://www.bridgescale.com.