BackWeb Receives $20 Million in New Financing

GE Pension Trust, Intel Merrill Lynch and Nippon Investment and Finance/Daiwa Invest`

San Jose, Calif., (July 28, 1998) -- BackWeb Technologies, the leading provider of knowledge distribution software solutions for the enterprise, today announced the closing of a $20 million private placement. BackWeb investors include GE Pension Trust, Intel Corporation, Merrill Lynch, Nippon Investment and Finance/Daiwa, and CDC Valeurs de Croissance.

BackWeb will use the funds to expand domestic and international sales and marketing operations. BackWeb will also use the funds to expand the professional services operation in order to provide expertise to customers to extend the impact of the products. This includes the award-winning product, BackWeb Infocenter 4.0, introduced last December, which recently won the Analyst's Choice Award from PC Week and the Stellar Award from Windows Sources.

"Our success to date has been based on our uniquely differentiated business model and our focus on critical enterprise applications, supported by a number of innovations," said Eli Barkat, BackWeb's chief executive officer. "Those innovations include our polite distribution technology which allows large packages of digital information to be delivered to users while avoiding network traffic problems."

All previous major BackWeb investors re-invested, including lead investor GS Capital Partners II, an affiliate of the Goldman Sachs Group, L.P.; BRM Technologies, Ltd.; SOFTBANK Holdings, Trinity Ventures, D.S. Polaris and Evergreen International Investments.

"BackWeb's solution is an excellent match for a market with great potential," said David Weiderecht, Vice President, GE Investments, the investment advisor to GE Pension Trust. "As demand for enterprise knowledge distribution gains momentum BackWeb is well positioned to take advantage of those growth opportunities."

"Intel supports a vision of ‘constant computing' that gives users a more natural and productive work style by providing just-in-time information on existing network infrastructure in enterprises," said Sally Fundakowski, Intel's Director of Business Developer Relations Group. "BackWeb's software is an example of such a technology that makes effective and productive use of system and network resources behind the scenes and provides significant advantages to the enterprise customer."

"Our ability to make our customers, like Schlumberger successful and give them a true competitive advantage is key to maintaining our continued growth," said Barkat. "BackWeb's success in providing industry leading customers return on investment and successful scalable deployments is significantly expanding the market demand for knowledge distribution."

More than 250 corporations throughout the world have deployed BackWeb applications across hundreds of thousands of desktops in their intranets and extranets to get the right information to the right people at the right time. In the first half of fiscal 1998, BackWeb's revenues increased 260 percent over the same period last year.

BackWeb customers include Rite Aid, The National Institute of Health, Compaq, Network Associates, Intel, and Computer Associates. BackWeb has strategic partnerships with Microsoft, Computer Associates, NewsEdge, and Hewlett-Packard.

The BackWeb Infocenter

BackWeb Technologies announced the BackWeb Infocenter 4.2, a client/server knowledge distribution application in June. BackWeb gives corporations using this product the ability to quickly create customized knowledge distribution applications for critical information delivery within their intranets and extranets.

The BackWeb Infocenter 4.2 customizable application enables corporations to ensure that everyone is current with the latest changes in critical software, information, files and videos, politely without affecting the network. Both local and remote users receive content as defined by the designated controllers using the condition based targeting system, customizable Infocenter, policy based publishing package, and programmable connectors

BackWeb's polite distribution technology provides truly scalable, guaranteed delivery of any size electronic package directly to users' desktops and ensures virtually no impact on corporate networks. The polite technology achieves this by downloading information in the background while a user is working and only using the bandwidth that is available.

BackWeb's polite technology is ideal for remote and dial-up users who often have slower Internet connections, with discreet bandwidth availability and who frequently experience Internet service interruptions. It provides differential and interruptible downloads of compressed, byte-level packets, distributing only bytes that contain new information. If a download is interrupted BackWeb simply picks-up the download at the same byte where it left off when the connection is re-established.

BackWeb's attention capture technology allows corporate managers to create a tunnel of critical information that breaks through the noise within the enterprise today and attracts users' attention. BackWeb enable managers to control and set publishing policies as well as make use of multimedia alerts and tickers to draw user attention to critical information

About BackWeb Technologies
BackWeb Technologies is a leading offline Web software company. BackWeb extends the value of technology investments by offering mobile and remote employees offline access to portals, intranets and other Web-based applications and content. The company's products reduce network costs and improve the productivity of an increasingly mobile workforce. At the core of BackWeb's products is its patented Polite® synchronization technology that can distribute large amounts of data even over narrow bandwidth connections. BackWeb® customers include market leaders such as Boehringer Ingelheim, Centocor, Eastman Kodak, GE Healthcare, Guidant, HP, KLA Tencor, Lam Research, Pfizer and more than one hundred other companies. BackWeb also has strategic reseller alliances with software industry leaders: Plumtree, SAP and IBM. The company is headquartered in San Jose, Calif. and Rosh Ha'ayin, Israel. For more information, visit www.backweb.com or call (800) 863-0100.

Statements in this news release, which are not purely historical, are forward-looking statements within the meaning of the U.S. Securities laws, including statements of beliefs, plans, expectations or intentions regarding the future. Examples of these statements include, but are not limited to, the ability of BackWeb software to allow customers to gain mobile, disconnected use of their portals and help increase field sales and field service productivity, the integration of BackWeb software with BEA products will help developers extend portal applications for offline use without changing the way they work, and the ability of the resulting applications to help field sales and service organizations realize maximum productivity, cost savings, and process acceleration gains while disconnected from the network. Actual results could differ materially from those in such forward-looking statements. Factors that could cause actual results to differ materially include unforeseen technological issues related to use of the BackWeb software, deployment issues related to implementation, unforeseen software errors, competitive factors and business and expense factors that may affect the perceived efficiencies from use of BackWeb's products, and the risks and uncertainties detailed from time to time in BackWeb's periodic reports and registration statements filed with the U.S. Securities and Exchange Commission. BackWeb assumes no obligation to update any forward-looking statements contained in this press release.