SANTA CLARA, CALIF. — July 23, 2001 - Sanctum, Inc., the established leader in Web application control and security software, today announced it has secured $30 million in financing, which will be used towards continued product development, sales outreach, global expansion and operations. New investors include Dell [NASDAQ: DELL], Fidelity Ventures, Gemini Israel Funds, First Union eVentures Group [NYSE: FTU] and Hitachi, Ltd. [NYSE: HIT]. These companies join a strong list of existing investors, led by Sprout Group, with Mofet Israel Technology Fund and Walden Israel, which have reinvested in the current round. This round increases Sanctum's total funding to over $54 million since May 1997.

Additionally, Sanctum announced that John Dillon, CEO of Salesforce.com, will become chairman of the board. Simon Davidson, principal of Fidelity Ventures, and Tali Aben, general partner, Gemini Israel Funds, have also been named directors of Sanctum.

"We are pleased that this round of funding includes a number of outstanding strategic partners from across key industry segments," said Peggy Weigle, CEO of Sanctum, Inc. "It's a solid endorsement for the company and its prospects. New government regulations, increased sophistication of hackers and their tools, and the dire lack of skilled security professionals are all fueling the need for companies to bolster current security measures. Sanctum is the only company providing comprehensive, automated solutions for application-level security, helping to ensure compliance with both external regulatory bodies and internal standards. Companies that are leaders in securing their applications are deploying Sanctum's world-class solutions."

The ability to secure additional funding in a tight market highlights Sanctum's three-year record of impressive growth and sustained momentum. Since closing the last round of financing in December 1999, Sanctum has established the leadership position for Web application security solutions. Increased awareness of application-level attacks, new government regulations such as Gramm-Leach-Bliley, and an increased sophistication of hackers and their tools are all driving forces fueling the need for increased application security. It is estimated that 75 percent of all security breaches occur at the application layer-Sanctum's AppScan and AppShield solutions provide automatic enforcement of intended business processes, ensuring protection of core information and data.

"Security is one of the fastest growing markets within the high-tech landscape and Sanctum continues to be a stand-out among private companies in the space," said Rakesh Sood, general partner of Sprout Group. "Sanctum's track record, solid management team and demonstrated commitment to deliver the best application security products available make it a distinguished leader in the category and a solid investment."

"Protecting customer information is critically important for companies providing services via the Internet," said Simon Davidson, principal of Fidelity Ventures. "Sanctum's solutions can be an integral component of a company's overall security architecture and the firm's potential in the marketplace made it attractive to us from an investment perspective."

"In just a few years, Sanctum has become the established leader in application security, delivering the most comprehensive security solutions for protecting a company's core information and data," said Tali Aben, general partner, Gemini Israel Funds. "We view Sanctum as a promising investment, as the only company in the application security space providing Global 2000 companies with software to make applications more secure, safeguard corporate data, reduce development cycle time, maximize resources and deliver a solid return on investment."

Sanctum Poised to Meet Exponential Market Growth
Forrester Research predicts that the amount of money U.S. companies will spend to combat computer attacks will rise from $5.7 billion today to about $19.7 billion in 2004. Additional metrics demonstrating company growth include:

• Annual growth projected at 300%
• A portfolio of more than 100 customers and partners using Sanctum solutions-six of the top 10 financial institutions in the U.S. use Sanctum solutions today
• A 33% increase in revenue in Q2 '01 over the previous quarter
• Commitment to innovation and intellectual property leadership demonstrated by one patented and five patent-pending technologies
• Global expansion through partnerships with Hitachi Information Network (HINET) and TechMatrix to distribute its flagship products, AppShield and AppScan, to the Japanese market

About Sanctum, Inc. (www.SanctumInc.com)
Founded in 1997 and headquartered in Santa Clara, Calif., Sanctum, Inc. is the recognized leader for Web application security solutions. Sanctum software solutions provide automatic enforcement of intended business processes, ensuring the protection of core information and data. By detecting and defending against any unauthorized behavior, Sanctum protects customers against malicious cybercriminal activity-from theft of intellectual property and customer data, to e-commerce fraud and Web site defacement-even if a site has unknown security holes or flaws. Sanctum's solutions complete a company's security infrastructure, assure regulatory compliance, and create sustainable ROI. Sanctum's customers include industry leaders in finance, retailing, healthcare, government and telecommunications. Privately held, Sanctum is funded by blue-chip venture capital firms and industry leaders including Sprout Group, Dell, Gemini Israel Funds, Fidelity Ventures, First Union eVentures Group, Mofet Israel Technology Fund and Walden Israel. For more information, visit www.SanctumInc.com or contact the Company directly at (408) 352-2000.

For Immediate Release
Contact:

Tara Dugan or Elizabeth Holwerda
Schwartz Communications, Inc.
(415) 512-0770
[email protected]