McGrath said Squixa had already signed up 40 customers, and was able to scale quickly due to its infrastructure being hosted in the cloud by US-based Amazon Web Services.
The capital raising will be used to fund new monitoring technology to allow customers to better study their website performance.
"Investors are reacting very well, there are some that haven't understood the technicalities, but those that do are keen," he said.
"There has been a bit of a trend for investors to look for the next big consumer or social idea that they think will go gangbusters overnight. However we see ourselves as selling shovels in the fresh dotcom goldrush rather than the seams."
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