SugarCRM Receives $18.77 Million in Series C

Investment Further Develops CRM Solution

Cupertino, CA (October 17, 2005) - SugarCRM Inc. today announced that it has secured $18.77 million in Series C funding that will be used to continue development of Sugar Suite, its market-leading commercial open source customer relationship management (CRM) solution. The lead investor in the round is New Enterprise Associates (NEA), a venture capital firm that has funded over 500 companies since 1978 with a focus on early-stage investments. Previous SugarCRM investors Draper Fisher Jurvetson and Walden International also participated.

The size of the round reflects SugarCRM's status as the most successful open source enterprise application in the industry. The company's Sugar Open Source Edition has been downloaded more than 350,000 times since its introduction in July 2004, while Professional and Enterprise editions with advanced features and technical support have attracted over 300 commercial customers.

SugarCRM products have also been translated into 21 languages, and the company has received broad industry attention for successfully pioneering a new software business model that is challenging traditional methods of developing and selling software. Advantages include lower total cost of ownership and open access to the source code for seamless integration with other enterprise applications. As lead investor in the current round of funding, NEA shares SugarCRM's broader commercial open source engineering roadmap complemented by a depth of experience in the software space. Funds received in the current round will finance ongoing software engineering for SugarCRM's application and infrastructure enhancements to Sugar On-Demand. The funds will also expand the SugarCRM support and services organizations.

"SugarCRM encompasses a successful business model which has generated impressive results in the last 18 months," said Scott Sandell, NEA General Partner, who has been appointed to the SugarCRM board. "NEA supports SugarCRM's vision and strategy and wants to accelerate SugarCRM's development."

"Although we were not actively looking to raise additional capital, we were impressed with NEA's common vision and depth of experience," said John Roberts, CEO of SugarCRM. "We ultimately felt that by adding Scott Sandell and NEA as a firm to our board of directors we could more rapidly execute on our broader commercial open source applications engineering roadmap." SugarCRM received $2 million in Series A financing in August 2004 and $5.75 million in Series B funding in February 2005.

About SugarCRM
SugarCRM is the world's leading provider of commercial open source customer relationship management (CRM) software for companies of all sizes. SugarCRM's Sugar Suite easily adapts to any business environment by offering a more flexible, cost-effective alternative than proprietary applications. SugarCRM's open source architecture allows companies to more easily customize and integrate customer-facing business processes in order to build and maintain more profitable relationships. SugarCRM offers several deployment options, including on-demand, on-premise and appliance-based solutions to suit customers' security, integration and configuration needs. For more information, call (408) 454-6900 or 1 87 SUGARCRM tollfree in the US, email contact@sugarcrm.com, or visit http://www.sugarcrm.com.

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