Norwest Venture Partners has made a $3 million first-round investment in Market-Touch, a marketing automation upstart that claims to have developed an arsenal of Web-based sales and marketing tools for the sales professional.

It is not Norwest's first investment in a marketing automation company, nor is Norwest the only venture capital firm betting on the still-fragmented front-office space.

Norwest recently closed a $250 million fund to boost investments in the communications and browser-based enterprise systems space. The venture capital firm says it attracts deals by offering startups introductions and prospective partnership deals with its top portfolio companies. The best way to ink an agreement with Annuncio, Vantive (VNTV), PeopleSoft (PSFT), or Documentum (DCTM) is to join the Norwest keiretsu, according to the venture capital firm.

"Market-Touch is thrilled to be backed by Norwest Venture Partners. The firm has extensive experience in the sales force and marketing automation markets," says CEO Corey Sommers. "They have already introduced us to a number of their portfolio companies, so we are hoping something will come of that."

Market-Touch is just one of a number of small front-office companies to recently attract venture capital backing. Fellow front-office startup FirePond has just raised a $20 million mezzanine round of funding from Technology Crossover Ventures, Lehman Brothers, and General Atlantic Partners. Meanwhile, MarketFirst, backed by The Sprout Group and some prominent angels in the enterprise software space, is currently closing a round of funding with investment from two new venture capital firms.

REAL CUSTOMERSFront-office software automates sales, customer service, marketing, and other functions that touch a company's customers. The biggest names in the space include public companies like Siebel Systems (SEBL) and Vantive, but startups developing new applications are beginning to attract attention -- and customers.

So far, five companies have signed up for Market-Touch's technology. Sales staff can punch in customized data about a product, potential buyers, and the competitive landscape, and the program will automatically create a document relevant to the particular sale.

"At the root we are a product comparison engine, designed to provide relevant and responsive information to buyers," says Mr. Sommers.

Market-Touch, founded in San Francisco last year, will use the venture capital to complete its executive team and to bring its solution to market.

OUT IN FRONTWhile most private front-office companies have emerged in the past few years, FirePond has been building what it calls "interactive selling" technology since 1983. In 1997 it hired Klaus Beiser, former CEO of SAP America, as CEO and took a first-round funding from General Atlantic to segue the company from a professional services firm to a pure product play.

FirePond has developed software that allows sales and marketing staff to generate product comparison, financing options, and quotations through the Web. Until now it has focused on the verticals of transportation, telecom, and health care, but it will expand into other categories with the recent round of funding.

Like Market-Touch, FirePond's technology is designed for selling expensive and complex products that require sophisticated selling tools. "You wouldn't use this technology to buy a commodity," Mr. Sommers explains.

OUT OF MANY, ONEMarketFirst solves a different part of the sales and marketing automation problem. Founded in 1996, it was one of the first companies to launch a software product that allows marketing departments to plan, design, execute, and measure complex marketing programs automatically, for old and new media.

MarketFirst and Market-Touch have recently signed up with Clarify (CLFY) to offer a more integrated marketing solution. MarketFirst automatically generates a marketing plan, tools from Clarify help track customers and generate quotes, and Market-Touch creates documents to help close deals.

According to Mr. Sommers, that combined offering goes head-to-head with Siebel, which boasts an integrated solution. While Mr. Sommers concedes the advantages of dealing with just one vendor, he argues that they are often unable to do all the pieces well. He believes it's better to have multiple vendors and one good systems integrator.

FirePond also relies on partners in the U.S. and internationally to provide complementary applications and services so that it can offer integrated solutions to customers such as General Motors, Blue Cross, and IBM (IBM).

Analysts say the front-office space remains fragmented and the argument over a single vendor providing all functionality versus multiple vendors providing best-of-breed functionality remains unresolved.

"Honestly, I don't know what the answer is," Mr. Sommers admits. "I guess we'll have to wait and see." Until then, front-office startups will continue to emerge with new technology and more venture capital financing.