Six-month-old Irish telecommunications company, Openet Telecom, has received $2.7 million (€2.67 million) in venture capital funding. The investment, made by Cross Atlantic Technology Fund (XATF), represents a 13-per-cent stake in Openet.

XATF has also retained an option for an additional 2 percent stake worth $540,000. The investment places an initial value on Openet of $22 million, even though it has just done £500,000 worth of sales in its first quarter.

According to Openet managing director and former head of the National Software Directorate, Mr Barry Murphy: "We believe we have three years to become a major player and capture 10 per cent of new business coming into this market. Over this time we plan to go from zero revenues to a $50 million a year position."

Openet does not expect to be profitable for the next three years while it focuses on research and development, and amassing a strong customer base. Mr Murphy says the company will initially target Germany, but from July 2000 it will focus on the US. Further funding of around $6 million will be sought next year to fuel the global expansion.

The company has developed a product which will allow providers of communications services identify and bill customers according to the type of services they are using.

Described as Internet Protocol (IP) mediation, it differs from traditional telephone billing which is simply based on time and distance. IP mediation requires a more complex mechanism which allows transaction information to be gathered from multiple data devices across a network.

Openet's "middleware" technology acts as a layer between communications networks and the multiple applications which sit on them. Its software operates between the two, identifying relevant information required by different billing systems.

Openet's technology will also allow it amass useful and valuable information about network activity and bandwidth requirements. Clients may potentially use such information for customer profiling.

IP mediation has been identified as the fastest growing area of the telecoms billing market. This market is currently estimated to be worth around $100 million, and is expected to grow to between $4 billion and $5 billion by 2003. Openet is also actively involved in the IP Data Record (IPDR) standards body which is currently working on developing a standard application program interface for IP billing.

The company is an offshoot of Openet International. The company chairman and founder, Mr Declan Conway, holds a majority stake of more than 50 percent. Co-founder, Mr Aidan Doyle holds a 5.5 percent stake, company executives hold 15 per cent, while remaining staff hold 10 per cent of the stock.

Openet currently employs 18 staff, and plans to bring this number to 50 over the next six months.