SmartStream, the banking back-office specialist, is set to become the most valuable software company to float in London since the heady days of the dot-com boom.

The group plans to raise £100 million when it lists on the London Stock Exchange's main market next month. The deal is set to value the company at up to £300 million, the highest achieved in London since the float of Innovation Group in June 2001.

SmartStream is pushing on with its initial public offering despite the recent turmoil in the market, which it argues actually underscores the value of the services it offers.

The company specialises in "hands-off, straight-through" processing of trades of assets spanning foreign exchange, equities and derivatives. Its software processes deals automatically and aims to identify and cut out "fat finger" and other manual errors.

Recent surges in trading volumes amid fears of a global credit crunch have sparked concerns that the back-office systems of the world's largest banks are being stretched to breaking point. In particular, sudden increases in the trade of complex instruments such as credit derivatives and credit default swaps are thought to have put a massive strain on the City’s clearing systems, a situation that SmartStream says it stands to profit from as institutions turn to more computerised processes.

Ken Archer, the chief executive, said: "Amid the volumes and volatility seen recently our proposal becomes even more important."

Last year’s 80 per cent increase in the volume of sophisticated over-the-counter derivatives products, which can take several days to confirm and clear, has also upped the pressure on back-office staff. Backlogs of trades have already led to calls from regulators in the US and UK for action. IDC, the analyst, expects the global market for transaction process management to grow 60 per cent, to about £900 million, within four years.

One big US bank is recently understood to have fallen a week behind in confirming trades. Others have been forced to order credit derivative staff to work weekends to ensure business can be resumed on a Monday morning.

SmartStream is 80 per cent owned by TA Associates, the private equity group, which bought it from 3i. It has around 1,000 customers, including more than 75 of the world's top 100 largest banks.

In the year to year to June 30 the company posted an operating profit of £13.9 million before depreciation, amortisation, share-based payment expense and exceptional items, on revenues of £46.5 million.

The company’s financial advisors on its IPO are Citi, Landsbanki and Close Brothers Corporate Finance.

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