N2 Broadband is making moves to solidify its place in the burgeoning video on demand marketplace after closing a $10 million financing round that included funds from AOL Time Warner.

Venture firm Highland Capital Partners led the investment, with follow-on participation from AOL Time Warner Ventures. The Atlanta-based company has now raised $17 million from strategic investors, including private investors such as Primedia's Paul Kagen of Kagen World Media.

The investment helps the Atlanta-based N2 Broadband position itself as a major interactive technology provider as the cable and entertainment industries race to get interactive delivery platforms in place.

N2 Broadband helps design and implement of large-scale video distribution networks, including network management, billing and security components, for content providers.

The company works with film studios and entertainment companies to help them automate the distribution of digital content such as video on demand across cable systems.

Among its specialties is its MediaPath asset distribution product, a plug-and-play platform that helps cable operators manage, store and serve interactive content while tackling interoperability issues with other providers along the way.

It has also been working with AOL Time Warner and other cable industry vendors to gain industry acceptance of the Interactive Services Architecture, a protocol for open standards cable and interactive TV companies.

The company has more than 90 installations of its MediaPath asset distribution system, including four major cable providers. Two others are kicking the product's tires.

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Dan Nova, Highland's managing general partner, also took a seat on N2's board of directors.

"N2 Broadband's solutions have been validated by major customer commitments in the burgeoning video on demand (VOD) market. This early success will enable the company to grow revenues and achieve near term profitability," he said.

In addition to Kagan, other investors in the company include Jeff Arnold, CEO of The Convex Group and former founder/CEO of WebMD; and by Eric Gleacher, Chairman and CEO of Gleacher & Co.