Softco, a Dublin-based software and document management firm, has completed a £4 million (€5.1 million) funding round and has announced several new contracts.

The investment was organised by Dolmen Corporate Finance and led by Oyster investments, the venture capital firm set up by Smartforce chairman Mr Bill McCabe.

Several private investors also contributed to the funding with Oyster. Together the parties have taken a 7 per cent stake in the firm.

Mr Jim Coffey, chief executive and co-founder of Softco with his sister, Ms Susan Spence, said he was delighted to secure the funding in an extremely difficult market.

He said the 10-year-old firm would return to profit this quarter unless a decision was taken to dramatically step up investment.

In the past 12 to 18 months, Softco has invested heavily in the US marketplace where it is targeting the healthcare market.

The firm announced yesterday it had won a contract to install its Remit product in one of the largest hospital chains in the US state of Iowa.

Remit manages the accounts receivable process between US hospitals' financial systems and the health insurance companies.

The company also announced deals for DHL Germany and Ellko, a private marketplace for the food and drinks industry in southern Europe.

Like many other firms in the sector, Softco has suffered a major drop in valuation over the past year.

The company said yesterday it was worth £55 million, while in January 2000 it claimed to be worth £200 million.