El Segundo-based software company iRise Inc. has received $15.8 million in late-stage funding from Morgan Stanley Venture Partners.

IRise makes products that allow custom software applications to be simulated and tested before clients make decision to invest in the expense and time commitment of actually writing the software code.

The closely held company does not disclose revenues or profitability numbers, but managed to raise $28 million in funding from 2001 to 2004. Its 100-customer portfolio includes Sprint Corp., Boeing Co., Bank of America Corp., AIG and Home Depot. Morgan Stanley Venture Partners is its first institutional investor.

Gartner Inc. research director Matt Light said he expects the Morgan Stanley investment to spur other similar deals.

“You see a substantial investment like this, and there will be a flurry of other small companies following on the heels of innovators like iRise,” Light said.

He points out, though, that iRise has competitors including IBM Rational’s RequisitePro and Rose, Sweden’s Telelogic DOORS, and Toronto-based Sofea Inc.

iRise has a staff of 90 in El Segundo, San Francisco and New York, and sales people throughout the U.S.

The company’s 37-year-old chief executive, Emmett Keeffe, said he sees a potential market of $30 billion.