Emageon, one of five Alabama companies that will make a presentation at this week’s Southeast Bio Investor Conference, has received $10 million in third-round venture capital funding.

Huntsville’s Southeastern Technology Fund led the investment in the Birmingham firm, which developed technology that allows film X-rays converted into digital format to be viewed over the Internet.

Emageon CEO Chuck Jett said Southeastern, which also has offices in Birmingham and Atlanta, put in about half the money at the beginning of the fourth quarter. Other investors include Paradigm Venture Partners, Harbert Management Co.’s Harbinger/Aurora Fund and Jemison Investment Co. of Birmingham and Delta Capital of Memphis.

All of the firms other than Delta have invested in Emageon previously. A 63-employee info tech company in the health care space, Emageon has now raised $24.5 million since it began commercializing its product in January 2000.

Jett says while such investment has led to “significant dilution” in the shares of stock owned by the company’s original management team, he thinks smaller pieces of larger pies are more valuable in the long run.

“If you’re building a business you anticipate being a major company with national and international reach,” he says, “it’s fundamentally important to have institutional investors starting with venture capitalists who will be with the company through thick and thin as it grows over time.”

Southeastern Managing Partner Paul D. Reaves says his firm thinks Emageon will be one of its “home run” investments.

“These guys solve a problem,” Reaves said. “They have a great technology and a great management team, so we really felt comfortable with this round of financing.”

Jett says increasing revenues are one indicator of his company’s upward momentum; Emageon posted $500,000 in revenues in 2000 and expects $4.5 million this year. Major clients are another important consideration for investors. In Emageon’s case, both Tenet Healthcare Corp. and Kaiser Permanente are clients, and have also made separate equity investments in the company.

While the CEO won’t comment on possible investor exit strategies, saying he’s still focused on serving current clients and growing the business, Reaves has some thoughts.

“With a company growing as rapidly as this one, there are any number of exit opportunities,” he says. “There are many very large players in the radiology space, so I think there are plenty of opportunities for a merger-acquisition, and fast enough growth for an IPO (initial public offering) one day.”

Nineteen companies will present at this year’s Southeast Bio Investors Conference at the Sheraton Birmingham Hotel. Designed to bring biotech companies and potential investors together, last year’s conference in Raleigh, N.C., drew some 400 participants, which is what organizers expect this year. The first conference was held in Atlanta. On the Web: Emageon www.emageon.com Southeastern Bio Investors Conference www.sebio.org