CommTouch Software Ltd. –

SANTA CLARA, Calif. – CommTouch Software Ltd., a global provider of email and messaging services, went public on July 13. The company offered 3.3 million shares of common stock at $16 each, within its $15 to $17 filing range.

U.S. Bancorp Piper Jaffray, Prudential Securities and Warburg Dillon Read L.L.C. underwrote the initial public offering, which left 14.19 million shares outstanding. Concurrent with this offering, CommTouch will sell an additional 1,344,086 million common shares to Go2Net Inc. and Vulcan Ventures Inc.

HarbourVest-Evergreen, Israel Growth Fund, Gemini Israel Fund and Concord Group were venture backers.

CommTouch offers customizable software solutions that allow both large and small companies to provide Web-based email services, which enhance corporate brands, promote Web site usage and generate additional revenue from on-line advertising and marketing programs. Customers of CommTouch include, Excite, LookSmart and Nippon Telephone and Telegraph.

Along with the funds raised from the concurrent private placement, the estimated $48 million in proceeds from the IPO will be used for sales and marketing programs, research and development, international expansion and working capital.

Yitfah Atir, managing director of Evergreen, joined the company’s board in January 1996. Allen Barkat, managing director of Apaz-Leumi Partners Ltd., the investment advisor to Israel Growth, and Yoseph Sela, an executive vice president of Gemini Capital, have served on the board since February 1996. Yair Safrai, managing partner of Concord, joined the board in January. Upon completion of the offering, Thomas Camp, an executive with Go2Net, will join CommTouch’s board of directors.

CommTouch Software – Selected Financial

(in thousands, except per share data)

Year Ended December 31, Three Months Ended March 31,

1996 1997 1998 1998* 1999*

Total revenue 3,134 899 389 32 346

Net loss -1,282 -3,473 -4,351 -919 -2,311

Net loss per share -0.66 -2.40 -3.00 -0.63 -1.50