Ebookers, the online travel agency, has brushed aside fears that it was heading for a cash crisis by raising $45m (£30m) in a placing of shares with institutional investors.

The company said the money should be enough to fund it through to profitability by early 2002. Finance director Sanjiv Talwar said: "This reinforces the message that we are a real business rather than a paper tiger."

Ebookers is a pan-European travel agency, operating in 11 countries. Although the company is based in London, its shares are listed on New York's Nasdaq and Franfkurt's Neuer Markt. It claims to have the highest transaction value of any online ticketing agent, with customers spending an average of £425 each.

The new money will fund a renewed advertising campaign, predominantly in print media, to convince travellers of the virtues of buying tickets on the net. It will also pay for upgrades in technology and the group has said it wants to make an acquisition to take it into Italy.

Mr Talwar said that assuming the group sticks to its current business plan, it will not need to raise any more cash. However, he added: "Of course, if there are strategic reasons for going in other directions, we will consider it."

The shares were placed at $11. In March, the price reached $35 but subsequently slumped as low as $6, amid rumours that the group was burning cash far faster than expected. Sentiment among investors was affected by the disappointing flotation of Lastminute.com, which also sells air tickets online.

Ebookers' chief executive is Dinesh Dhamija, who previously founded the offline Flightbookers travel agency.

The company announced last week that quarterly sales had reached £20m, with losses up from £660,000 to £6.6m.