Politzer & Haney, a developer of Internet cash management software for banks and other corporations, has raised $15 million of venture capital.

The Newton, Mass., software firm is 17 years old but had never before accepted outside investors' money. The funding is to go toward accelerating development of its Internet-based cash management software.

The deal was managed by Boston Millennia Partners and Shawmut Capital, a unit of FleetBoston Financial Corp.

Politzer & Haney plans to develop eConnection, a system that would simplify the way corporations use various banking services. It also plans to add a software module called eWork, a self-service tool.

Chris Haney, founder and chief executive officer of Politzer & Haney, said companies are increasingly using cash management services online. "We have to find a better way to set up and support those customers."

The company also will develop eBusinessLink, which would let users make electronic data interchange transactions using the eXtensible Markup Language standard.

Politzer & Haney accepted venture capital but could have held an initial public offering of stock, which carries lower fees than private funding does. As a public company, Politzer & Haney could garner much more attention from the market, acquire other companies, and attract and retain a more valuable pool of employees with the promise of stock options.

Mr. Haney said that once a company goes public, management takes on additional responsibilities and costs and that the attention to shareholder concerns can hurt the core business.

"We have a lot of customers and a long track record, but our focus is not on market capitalization per se. It is actually to do a good job for customers," he said.

The privately held company's revenues are growing by 50% a year, and it was profitable in 1999, Mr. Haney said.

He said the downward adjustment of the market "strengthens our position relative to IPO prospects," because the company would be viewed more favorably by potential investors. People increasingly are discerning which companies have sound business fundamentals, he said.

Participants in the funding included Citizens Capital Inc., part of Citizens Financial Group of Providence R.I.; Allfirst Financial Inc.; and Merrill Lynch & Co., all of which are customers of Politzer & Haney.

Robert Garrow, president of Citizens Capital, said that Politzer & Haney "has the blend and benefits of an established company and is a market leader with a proven cash flow, but it also has all the upside potential of an Internet company."

Bill Murray, a senior vice president at Allfirst, said his bank has used Politzer & Haney's business banking software since the late 1980s. "We wanted to skip the Windows phase and go right to the Internet from DOS, and Chris [Haney] was one of the only guys at the time who was really interested in doing something on the Internet," Mr. Murray said.

Allfirst, a regional commercial bank with about $17.5 billion of assets, has sold Politzer & Haney's cash management browser service to 700 of its corporate customers, or roughly 25% of its total base. It plans to move the rest of its cash management business to browser-based technology over the next 18 months.

"We are giving [corporations] the same information, but just in a different fashion," Mr. Murray said. "Clearly some of the advantages for doing it have become obvious. Those [DOS] support issues are very expensive."

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