Almaz Capital Partners acquires equity stake in Alawar Entertainment

SAN FRANCISCO and MOSCOW, February 4, 2010 - Alawar Entertainment today announced that venture capital firm Almaz Capital Partners, general partner of Almaz Capital Russia Fund I (also known as Almaz Capital/Cisco Russia Fund I), signed an agreement with Finam Investment Holding to purchase Finam’s equity stake in Alawar Entertainment. Under the terms of the transaction, Almaz Capital Partners will acquire a 23% stake in the company, which Finam acquired after several rounds of investments starting August 2007.

According to the Casual Games Association, the international casual games market reached $2.7 billion in annual in 2009, with 30 percent of all new games being created in Eastern Europe. Within this space, Alawar has significantly bolstered its position as the leading distributor of casual games on the Russian segment of the Internet by developing its own Web sites and expanding its partnership network. The company released over 60 new gaming products for various platforms, including PC, Mac, iPhone, Sony PlayStation 3, J2ME and Android. Throughout 2009 Alawar launched its own distribution network for Ukraine, Poland, Germany and Finland. Over the past two and a half years the company’s capitalization has more than quadrupled, while average turnover growth has reached 120% per year in the past three years.

“During our cooperation with Finam we’ve made great progress in the distribution of casual games in Russia and now the company is well-positioned for a new stage of corporate development, which will mainly focus on international expansion. Leveraging the network and experience of Almaz Capital Partners, we plan to enter new markets and extend the reach of our existing and upcoming titles,” said Alexander Lyskovsky, CEO of Alawar Entertainment.

“A key element of our investment strategy is to find innovative companies in Russia that are prepared for dynamic growth in other global markets. Alawar fits perfectly into this strategy. Under the leadership of Alexander Lyskovsky and with the efforts of his talented team, Alawar Entertainment has established a leadership position in the Russian casual gaming market and is poised to expand globally,” said Alexander Galitsky, Managing Partner at Almaz Capital Partners.

“During the time of our work with Alawar Entertainment, Finam Investment Holding has gained precious experience in operations on the fast growing casual games market and generated attractive returns. We teamed up to implement a number of interesting projects, which resulted in Alawar Entertainment achieving a strong market presence in this segment. I am confident that the company will retain a robust pace of growth. We, in turn, plan to finance several new companies on the Russian market in the near future and expand our IT-project portfolio”, Alexei Basov, Director of IT-Investment Department at Finam Investment Holding noted.

Alawar Entertainment, Inc.

http://company.alawar.com

Founded in 1999, Alawar Entertainment specializes in the development, publication and distribution of casual games, reaching audiences in over 60 countries worldwide. The company is the leading distributor of casual titles in Eastern Europe and has published more than 200 casual PC games globally, including some of the industry's leading downloadable series like Farm Frenzy®, Craze® and The Treasures of Montezuma®. Alawar recently extended its offerings onto the iPhone™, PLAYSTATION®3, Nintendo DS™ and Mac® gaming platforms, and in 2010 plans to enter the social games and MMO markets as well as expand onto other leading-edge platforms.

Almaz Capital Partners

Almaz Capital Partners is a venture capital firm that invests in Russian/CIS-related

technology, digital media, and communications companies. The firm has offices in

Silicon Valley and Moscow. Additional information about Almaz Capital Partners can

be found at http://www.almazcapital.com.

Finam

http://www.finamrus.com

Finam Investment Company was established in 1994, and became the hub around which Finam Investment Holding was established. The company was one of the first in Russia to offer services to stock market investors. Finam now provides one of the broadest spectrums of investment services to institutional and individual investors, ranging from public-market funds and trust management services, to full-scale transaction support in the purchase or sale of businesses and capital operations (IPOs, private share offerings, etc.). The holding is actively engaged in direct investments and channeling resources into the acquisition of high-tech projects through such funds as Finam Information Technologies, Russia's first mutual fund for high-tech investments. The holding also acts as a large-scale investor in agricultural projects.

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Contacts:

• Tatiana Chernova, marketing Communications and PR director, Alawar Entertainment, chernova@alawar.com, tel. + 7-913-905-5543;

• Vlad Kochetkov, PR-Director at Finam, kochetkov@finam.ru, tel. +7-495-96


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