Computer multinational Intel, financier Mr Dermot Desmond and ICC Venture Capital yesterday emerged as the lead players in a €4 million investment in Irish technology company Magnetic Solutions.

The company announced that it had raised €4 million from a group of new and existing backers in its third round of financing. It did not give a breakdown of how the investment was shared.

However, it is understood that ICC Venture Capital, with 3 per cent of the company before the fund-raising round, increased its stake to close to 15 per cent. Mr Tom Kirwan of ICC Venture Capital will join the Magnetic Solutions board.

Mr Desmond's International Investment and Underwriting (IIU), which originally held 48,000 shares, was another lead investor.

His one-time company NCB acted as adviser on the deal.

Intel Capital became a first-time subscriber for Magnetic Solutions shares. Intel Capital is the strategic investment arm of semi-conductor giant Intel.

It already has a number of Irish interests, including a stake in Wicklow-based Accelerated Encryption Processing (AEP), which is also backed by telecoms millionaire Mr Denis O'Brien.

Magnetic Solutions chief executive Mr David Hurley said Intel's backing would be significant for the company.

The money will be used to fund the manufacture and sale of the company's lead product, a piece of equipment used in the manufacture of so-called M-RAM computer chips, which will be used to power the next generation of mobile and information technology.

The company expects an increase in demand as M-RAM chips are due to go into production this year.

They increase the speed and memory capacity of mobile phones, computers and other devices, but need comparatively little energy, according to Mr Hurley.

Magnetic Solutions has already sold 10 of these machines, which are valued at €1.5 million each. "We have around 85 per cent of the market at the moment," Mr Hurley said.

"We have two competitors, one based in Japan and one based in the US, but we are the dominant supplier."