NEW YORK – Arthur Andersen LLP became one of the latest professional services firm to join the venture capital fray, in January launching its first VC fund, the $500 million Arthur Andersen Ventures LLC.
The vehicle will back business-to-business e-commerce, new media and Internet services companies worldwide, focusing on areas where Arthur Andersen already conducts business such as the United States, United Kingdom, Germany, France, Brazil, Argentina, Singapore and Japan, said Mathew Verghese, a managing director of the fund.
Arthur Andersen joins The Yankee Group and other professional services firms as new entrants into venture investing. Arthur Andersen sees value in providing services in exchange for equity in new companies, and the firm’s wide range of expertise can be of value to portfolio companies, Verghese said.
Arthur Andersen Ventures fund, whose sole limited partner is its parent company, will focus on business-to-business companies, specifically those “that will shape new markets and redefine existing ones,” Verghese said. Typical initial investments will range between $500,000 to several million dollars, and the fund is expected to be fully invested within five years, said Verghese, who could not estimate the number of companies the vehicle would back.
Arthur Anderson Ventures at press time had made one investment in an intellectual property Internet start-up, the name of which had not yet been released. The firm will leverage its wide network of contacts and expertise to assist the growth and success of its portfolio companies.
The accounting and consulting giant has formed a formal working relationship with Menlo Park, Calif.-based U.S. Venture Partners. The venture firm, which focuses on early-stage technology investments, will refer investment opportunities to the new fund, and in exchange, Arthur Andersen will offer the firm’s portfolio companies access to its global network of contacts.
Verghese and nine other managing directors with varying areas of expertise and geographic focus will manage the vehicle. Prior to working with the fund, Verghese was a partner in Arthur Andersen’s information technology consulting practice.