An Eircom subsidiary is about to invest £5 million (€6.35 million) in a new venture funded by a founder of Ebeon, another Eircom subsidiary. Vaspeon is 49 per cent owned by C2L, a private venture capital company run by Ebeon director Mr Norman Crowley, following a £1 million seed capital investment earlier this year. The company was set up in January as an Internet commerce service provider and has already reached partnership agreements with two major US companies to fulfil IT hosting requirements here for their clients expanding into Europe.

It is understood Vaspeon will shortly announce a £5 million investment from an Eircom subsidiary, which will account for around 10 per cent of the company's equity. The remaining 41 per cent will be retained by Mr John Farrelly, Vaspeon chief executive officer.

Mr Farrelly previously set up infrastructure-managed service company Wolfe in the Republic. Mr Farrelly refused to confirm the source of the investment, but told The Irish Times Vaspeon had reached a verbal agreement with an Irish-based company for £5 million funding.

Vaspeon has secured an 18,000 sq ft purpose-built facility in west Cork and has received planning permission for a 100,000 sq ft premises in Bray, Co Wicklow.

Mr Farrelly says Vaspeon predicts sales of £3 million by April next year, rising to £10 million the following year.

By the end of year one Vaspeon plans to employ around 60 people.

Vaspeon's initial client base will come from data storage giant EMC and Navisite, an application service provision company owned by CMGI, a major US venture capital company that has incubated well known dot.coms like Alta Vista, PlanetOnline and Books24x7.

EMC currently offers an incubation facility for around 20 start-up companies servicing their IT and bandwidth requirements. Vaspeon plans to fulfil the same function for these companies beyond the incubation phase. It will also target - through its partners and two on-the-ground sales people in the US - US Internet businesses seeking to establish a European presence.

"We see ourselves localising US customers into Europe, harnessing the concept of Ireland as an e-commerce `hub' for Europe. We also envisage C2L will direct new investments towards us for facilities hosting," Mr Farrelly said.

He added that Vaspeon had secured a number of highly skilled senior technology professionals from high profile companies, with announcements expected in coming weeks.