DirectAg.com, the leading business-to-business Internet site serving the $260 billion U.S. agricultural industry, Tuesday announced the completion of a $12.6 million round of private financing led by Sutter Hill Ventures.

The company also announced that Greg Sands, managing director at Sutter Hill Ventures, will join the DirectAg.com board of directors. Sands was a member of the original management team at Netscape, where he was instrumental in launching Netscape's suite of Internet server software and building that company into an Internet industry leader.

Tuesday's announcement represents the second round of private financing completed by DirectAg.com since its founding in early 1999 and brings the total amount of capital raised to date to $15.1 million. Joining Sutter Hill in the current round was Advanced Technology Ventures, as well as prior investors St. Paul Venture Capital and Upper Lake Growth Capital.

Launched in August, DirectAg.com is the Internet's only comprehensive information source, community forum and marketplace expressly for farming businesses.

The site features ag-specific news, weather reports, commodity pricing and other information, while also offering farmers the ability to interact with their peers; pose questions to online agronomy experts; and compare, finance and purchase products online.

"This new capital will solidify our leadership position by fueling new strategic alliances with leading agribusiness suppliers, accelerating management and staff additions and funding aggressive sales and marketing programs,'' said Kip Pendleton, DirectAg.com founder and chief executive officer.

"The Internet is quickly changing the way the American farmer accesses knowledge and conducts business. We intend to make DirectAg.com the online destination for the nation's commercial producers by providing them swift, easy access to a wide array of product choices and in-depth information to make knowledgeable decisions.''

According to statistics released last July by the Department of Agriculture, 77 percent of U.S. farms with annual sales over $250,000 have access to a computer, and 52 percent have Internet access. Overall, 47 percent of the nation's more than 2 million farms have access to a computer, and 29 percent have Internet access.

"DirectAg.com is taking advantage of an enormous opportunity to bring efficient, new distribution channels to the agriculture industry,'' said Sands. "With great partners and an outstanding management team of well-respected agriculture industry veterans, it is the clear leader in its space.''

The DirectAg.com senior management team has more than 100 years of combined agribusiness experience. Pendleton founded the company following a distinguished 18-year career with three seed industry leaders: Pioneer Hi-bred, Northrup King and Mycogen. Don Jacoby, vice president of customer relations, has more than 30 years of agribusiness experience with Novartis Seeds, Northrup King and Case/International Harvester.

Actively involved in agricultural associations, Jacoby is currently an officer for the U.S. Grains Council. Steve Baker, vice president of business development, is the former head of marketing, research and development for AgriBank, where his team launched MainStreetUSA.com and FarmCredit.com.

Jim Nesmith, chief information officer, previously served as head of technology integration for Monsanto Global Seed and has been honored by the Smithsonian Institute for his technology leadership.

"The experience and reputation of their management team allows DirectAg.com to attract top-tier financial and strategic partners and truly sets them apart from many other business-to-business Internet companies,'' said Michael Gorman, general partner at St. Paul Venture Capital and a DirectAg.com board member.

"This new round of financing is validation of DirectAg.com's solid position as the vanguard in a dynamic, growing vertical market.''

DirectAg.com, founded in 1999, operates an online e-commerce resource designed to help farmers grow their business. DirectAg.com has partnered with leading content providers like Farm Progress, a division of Rural Press, the world's largest agriculture publishing company, and AgriGrowth, the premier U.S. independent agronomic consulting firm.

The site allows farmers to access unbiased, ag-specific news and information and order products 24 hours a day, seven days a week. Major seed company brands will be sold via the site beginning this month, and DirectAg.com plans to expand into other areas, including ag chemicals, farm equipment, parts, animal health and financial services. The company has headquarters in St. Paul.

Sutter Hill Ventures has been a leader in financing technology-based companies since 1962 and has more than $400 million available for promising new companies. Sutter Hill invests in early-stage companies that pioneer products or services in growth markets, primarily in information technology and health care.

Sutter Hill Ventures works in partnership with management to solve the financial, recruiting and strategy problems that confront growth companies.

St. Paul Venture Capital is a leading national venture capital firm focused on early-stage technology-driven businesses. With more than $1.5 billion under management, St. Paul Venture Capital brings extensive resources, experience and contacts to bear in partnership with outstanding management teams.

St. Paul Venture Capital has offices in Silicon Valley, Boston and the Twin Cities.

Advanced Technology Ventures is a leading venture capital firm focusing on opportunities in information technology and health care. ATV's management experience, technology expertise, global network of industry contacts and collaborative style have helped more than 100 companies navigate from inception to IPO and beyond.

With more than $300 million currently under management, ATV's investment philosophy centers on
collaborative, active participation with the management teams of its portfolio companies. For more information,
visit www.atvcapital.com.

Company news release
N2166