Belfast telecoms software firm Aepona has completed one of the biggest funding rounds in Ireland in recent years, attracting investment worth $20 million (€15.25 million) and offering several long-term shareholders an exit from the business.

Under the deal, US venture capital firm Polaris Ventures will take a significant stake in the business.

Two of the firm's existing venture capital backers, Dublin firm Trinity Venture Capital and the British firm Amadeus Capital Partners, also invested in the round, which will enable Aepona to significantly increase its sales and marketing operations in the US and Asia.

It will also spend about £2 million (€2.9 million) on research and development activity this year, according to Michael Black, chief finance officer at Aepona, who negotiated with the venture capital firms on the funding contract.

"No one can say there is a lack of funding around at the moment, but we offered Polaris really big name customers that are already spending money on our products," says Mr Black. "Many of our deals are worth £1 million plus."

Two mobile phone operators, Orange and the German company E-plus, are customers of Aepona, which supplies them with a software platform to introduce a range of new services.

Its core software product, Causeway, is a carrier-network operating system - a type of common gateway through which firms can deploy services in a much more efficient manner than previously possible with proprietary systems. The system is based on a common open standard called Open Service Access (OSA), which enables programmers to easily develop new applications such as call completion services, says Liam McQuillan, chief executive of Aepona.

Aepona has also concluded deals with international partners such as Microsoft, Oracle and Hewlett Packard in recent months.

All of these firms embed technology into broader solutions that they are selling to the telecommunications industry.

Aepona's operating system software is applicable in both the mobile phone and the traditional fixed line telecoms worlds, widening the potential customer base for the product.

Eircom is an Aepona customer, and is using its software to deploy a new internet call waiting service that will enable the firm to offer dialup internet customers a service that tells them when a caller is trying to ring them on their line.

"These types of new services enable telecoms firms to generate additional revenue, even when a call is not completed," says Mr McQuillan, who previously served as vice-president of engineering of Aepona's parent company, Aldiscon.

Aldiscon developed SMS technology for mobile operators, and is one of the biggest success stories in Northern Irish business. It was sold to Logica in the late 1990s for $100 million.

Mr McQuillan then moved to become chief operating officer of an Aldiscon spinoff, Apion, which developed WAP gateways for the mobile industry. This firm was later sold to the US firm Phone.com - which subsequently changed its name to Openwave - for $250 million.

This successful history and management were crucial factors that influenced the Dublin firm Trinity Venture Capital to back Aepona, says Brian Caulfield, a Trinity Venture Capital partner.

"They have an exceptionally strong management team, which is the same team that was responsible for Apion and Aldiscon," he says. "We also see a particular strength in Northern Ireland in developing software for the telecoms industry, with the likes of BT and Fujitsu in the market."

A focused management team was a key factor behind Polaris Ventures' decision to invest in Aepona, according to Polaris Ventures partner Bob Geiman, who will join the board of Aepona.

"Our investment reflects the fact that Polaris provides funding to companies with sound and well-executed business plans Aepona Causeway represents a compelling way forward for telecoms operators."

The presence of two of Northern Ireland's most successful entrepreneurs, Gilbert Little and Joe Cunningham, on Aepona's share register is also of huge value.

Mr Little founded Aldiscon as a software services company in Dublin in 1988, and Mr Cunningham joined a few months later. Mr Cunningham now sits on Aepona's advisory board and Mr Little is chairman of the firm.

Mr Little, Mr Cunningham and the firm's management own about 40 per cent of Aepona's shares. The remainder is held by the venture capital companies that have invested in the software firm.

"We follow the same model," says Mr Cunningham. "We set up a services business and then develop a product around it. This enables us to be close to our customers and decide what type of products will become really important... It was the same for Aldiscon and Apion, and it is now the same for Aepona."

Mr Little and Mr Cunningham's connections in the telecoms and finance industry open doors that few small companies in Belfast or Dublin have access to, enabling Aepona to compete with the big players in its market sector, Alcatel and Ericsson.

Aepona, which employs 140 people, generated about £5 million in revenues last year from sales of its software. It generated about £2 million from its consulting and services business, a legacy of its spinoff from Apion.

Some existing investors in Aepona have been bought out through the cash injection. These include several former staff members of Aldiscon.

One of Aldiscon's first investors, the Gibraltar firm Mayfair Venture Capital, which is controlled by millionaire businessman Jay Murray, was bought out through the latest investment, which will be formally announced today.

Aepona has raised about £20 million since it was founded in 1995. It has not ruled out a future initial public offering on the stock market, according to its chief financial officer.

"We believe we have the breadth of products to be a future candidate for an IPO. We are a multi-product company," says Mr Black. But he says management is not considering selling the business any time soon.

"I don't see any grand design to put the company on the market, as this would not be consistent with building shareholder value," he says. "Our investors are for the medium to long term."

With the telecoms industry in recovery mode after years of stagnation, few would bet against a multimillion euro payday for two of Northern Ireland's most successful entrepreneurs.