Whittman-Hart and USWeb, which completed their $6 billion merger two weeks ago, formed Bluevector, a separate venture capital group that gives the firm a way to invest in promising e-business and technology start-ups.
The combined firm of Whittman-Hart and USWeb provides clients with back-end integration and consulting work as well as front-end Web strategy, development and application hosting services to midsized businesses and Fortune 1000 companies.
Whittman-Hart and USWeb initially will contribute $50 million as well as their existing portfolio of venture capital investments in return for a 50 percent stake in Bluevector. On top of that, Whittman-Hart and USWeb said they will also be the "preferred provider" of professional services to Bluevector's portfolio of companies.
Today's announcement marks the latest move by a professional services firm to take on an investor role. Competitors such as EDS and Andersen Consulting, along with smaller Net services firms like Breakaway Solutions, have all recently launched venture capital groups. In December, Plano, Texas-based EDS announced the formation of the EDS-A.T. Kearney Ventures Fund, a new unit that will focus its investments on Internet and business e-commerce companies over the next five years, taking equity stakes in its Internet-based clients.
Boston-based Breakaway, which offers services such as application hosting, virtual management teams and strategy consulting, recently formed Breakaway Capital to offer minority venture funding to select clients and help start-ups speed through the process leading to an IPO, with a strong focus on business e-commerce start-ups.
Since the completion of its merger, which received a mixed reaction from Wall Street, Whittman-Hart and USWeb have been moving quickly to integrate their two firms, with plans to launch a large advertising campaign soon and announce a new company name.
Bluevector, which will be led by a management team primarily made up of former financial analysts from research firm Credit Suisse First Boston, initially will run its operations from offices in New York and the San Francisco Bay area, the companies said.