Exam on Demand (EoD) has received money to prove that cheating at school does not pay.

The company, which is based at the Sussex Innovation Centre in Brighton, has secured £200,000 of private investment to develop what it claims is a revolutionary product that ensures the integrity of PC-based online examinations.

Although the technical details of the product are confidential because EoD has a patent pending, it is confident it has no direct competition and was over-subscribed when it sought further investment to finance product development.

It expects to be cash positive in less than a year.

EoD was formed after business development director David Russell was approached three years ago to come up with an online English language course.

He said: "At the end of the course there was no way of taking an exam so I searched to see if there were any existing exam solutions. I found that, although there were lots of online assessments, they were easy to cheat."

Mr Russell spent the next 18 months developing a new system, teaming up with managing director Mark Robinson, who realised the product could be used for far more than just English exams.

Mr Robinson said: "We did a round-the-world trip to see what competition there was. What we found was a gap in the market because everyone seemed to be concentrating on the exam content rather than how to provide it."

The company is establishing affiliates in the USA, Brazil, Hong Kong, Australia and southern Africa.

Mr Robinson said there were also opportunities in the domestic market. The company inquired about the cost of SATS exams taken by 600,000 schoolchildren and found each exam costs £7.50, excluding the costs of preparing and mailing the papers.

Mr Russell said this was a clear market opportunity for a company with a secure online examination system.

He played down concerns that the new product could fundamentally change the examination system, saying: "We're talking about evolution not revolution. Organisations can use it to reproduce existing exam systems or do something more innovative with it."

www.examondemand.co.uk