Commerzbank and VenGrowth Investment Fund Invest $US 25 Million in Algorithmics

Toronto, Canada - January 15, 2001 -

Algorithmics Incorporated today announced that Commerzbank AG ("Commerzbank"), one of Germany's largest banks, had joined the ranks of new investors in the strategic private financing first announced in September¹. In addition, the VenGrowth Investment Fund converted the nature of its initial investment from debt to convertible notes. The combined investment is $US 25 Million, increasing the amount raised in the private financing to $US 85 Million in 2000.

"This concludes our private financing with blue chip investors, and the size of the financing demonstrates the confidence these firms have in the Company. We will leverage the development and marketing of our Mark-to-Future based solutions, as we enter a year that will be a turning point in how we help institutions, corporations and individuals manage their risk and maximize their rewards," said Ron S. Dembo, President and Chief Executive Officer of Algorithmics.

The addition of Commerzbank meets a key goal of Algorithmics' management for the financing round, to bring a major European investor in to the round. Commerzbank's participation will provide the Company with additional insight in to the European market, which currently provides more than half of Algorithmics' annual revenues.

About Algorithmics
Algorithmics was founded in 1989 in response to the complex issues surrounding financial risk management for the enterprise. Today, as the leading provider with the largest and most experienced team in the industry, Algorithmics continues to focus its efforts on creating and implementing enterprise risk management software that meets the evolving needs of its customers.

¹The September financing involved four of the world's leading financial institutions: American International Group, Inc. (AIG), Morgan Stanley International Inc., CIBC Capital Partners and Royal Bank Capital Partners, with $US 60 million proceeds earmarked for strategic acquisitions, further development of products and solutions based on the firm's standard for enterprise risk management - Mark-to-Future - and repayment of a portion of existing debt. Morgan Stanley Dean Witter acted as placement agent in that transaction.

About Algorithmics
Algorithmics Incorporated is the leading provider of enterprise risk management solutions that enable financial institutions to effectively understand and manage their financial risk. Algorithmics' clients include more than 150 of the world's leading financial institutions. Its Algo Suite of enterprise risk management solutions are in use in 31 countries by over 50 of the 100 largest financial institutions in the world.

©2001 Algorithmics Incorporated. All rights reserved. ALGORITHMICS, ALGO SUITE, MARK-TO-FUTURE, MtF and the Ai logo are trademarks of Algorithmics Incorporated and/or its affiliates.

Press Contact

Heather Smith
Senior Communications Manager
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email: Heather.Smith@algorithmics.com