Cambridge-based Featurespace, which makes software to analyse customer behaviour, has attracted £1.5 million from investors led by AIM-quoted Imperial Innovations Group.

Mike Lynch, a non-executive director of Featurespace and the former CEO of enterprise software company Autonomy, contributed to the round alongside existing investors Nesta, Cambridge Angels and Cambridge Capital Group. Imperial Innovations contributed £750,000 to the funding round.

The business was founded by non-executive director Bill Fitzgerald, a professor at the University of Cambridge, and chief executive David Excell, Fitzgerald’s former PhD student who has worked as a research engineer and self-employed IT consultant.

Excell comments, ‘We are already gaining good customer traction with our technology, and this investment enables us to further build our team and sales capability to support our growing business through the next stage of our development.’

Featurespace’s software processes streams of data and aims to identify, predict and influence customer behaviour. In addition to marketing analytics, the company is also applying its technology to fraud detection.

Its customers include online gambling company Betfair and financial derivatives specialist IG Group.

The business intelligence market was estimated by IT research firm Gartner in 2010 to be worth $10 billion (£6.5 billion), and the fraud detection market $270 million.

Imperial Innovations originally invested in spin-outs from Imperial College London, but now supports technology from Cambridge University, Oxford University and University College London as well. It has a portfolio of 78 companies and invested £35 million in 23 ventures last year.