Nasdaq listing the next step for Eontec

A Dublin-based banking software company which recorded revenues of less than $1.5 million (€1.6 million) last year says it plans to seek a listing on the US Nasdaq stock exchange by mid-2001.

Eontec, which this week raised $10.4 million in funding from a team which includes entrepreneur Mr Denis O'Brien, has spent the last six years developing banking software based on Sun Microsystem's Enterprise Java technology.

Company founder and chief executive officer, Mr Jim Callan, says Eontec is now on target for sales of $17 million this year. The latest round of funding has placed a $100 million valuation on the firm.

The 38-year-old took a gamble on Sun's Java technology when he set up Eontec in 1994. The programming technology - which operates on the mantra "write once, run anywhere" - was sceptically viewed by the Microsoft dominated IT industry at the time.

Now Mr Callan says Eontec no longer has to adopt an "evangelical" approach to convince customers of the benefits of Java-based software. "In the early days we relied on massive support and fostering from Sun Microsystems. But now the technology is in fashion, it has taken on a different momentum of its own."

Mr Callan holds an estimated 40 per cent shareholding, while Eontec directors Mr Kieran Collins and Mr Colin Piper each hold 8 per cent.

ICC Software Partners took an early-stage 33 per cent stake in Eontec and was also involved in the latest round of funding, which includes investment by Mr Denis O'Brien, private clients of Davy Stockbrokers and New York based investment bank Allen & Company. Between them they now share an estimated 8 per cent stake.

Three per cent of Eontec's equity has been set aside for a share option pool for the company's 140 employees based largely in Dublin, but also in offices in India, the US and the UK.

It says it is the first company to develop a range of Java-based products for the banking industry. Its BankFrame technology comprises more than 200 processes, and provides a basic component infrastructure for banking software developers, which allow banks to operate new processes across a range of differing IT systems and channels.

Mr Callan says: "The entire banking component software market is just beginning to open up. Software used to be assembled by writing large programmes, now it operates more like lego with different bits of software layering on to build new systems. This is a market that is only starting to develop."

Mr Callan says he was spurred to set up an indigenous software company after completing the Irish government management graduate training programme in Washington in 1987. Afterwards he worked in a number of UK and Irish banking roles culminating in the entire installation project of ACC bank's high street retail banking systems in 1991.

All of Eontec's product components are designed in Dublin, and shipped to Delhi in India for development. Mr Callan envisages Eontec will gradually open a number of product development centres worldwide. "The idea from the outset has been to take the company global and follow the example of Irish companies like Iona Technologies and Baltimore."

Eontec's revenue model is based on software licensing, similar to that of enterprise software giant, SAP. The products are installed among Eontec customers through systems integration companies like Andersen Consulting, Cap Gemini and Perot Systems.

Because the company is still at an early stage, services account for roughly half of its activity, but Mr Callan says over time he sees Eontec being primarily product focused.