Venture fund in $6m IT deal

By ROB O'NEILL

Publicly listed venture capital fund IT Capital has struck a $6 million deal with Ernst & Young to deliver business-to-business e-commerce solutions to local companies.

Details of the structure of the venture and of potential clients, however, remain sketchy.

As part of the deal, IT Capital will provide $3 million in cash, technology know-how, local implementation skills and overseas contacts while Ernst & Young will provide managerial and business services to the value of $3 million and access to its international network.

The alliance will aim at small to mid-size businesses, but the scope of the project is broad. Companies wanting to introduce e-commerce systems into existing businesses will also be targeted, as will technology developers who have already built up a "head of steam" but who need professional services to extend their businesses.

Ernst & Young will forgo immediate payment for its services in some cases for equity or "risk and reward" returns on future revenue.

Ernst & Young partner Wayne Jackson said yesterday that the structure of the venture was yet to be determined.

"But we certainly aren't investing in IT Capital," he said.

"The alliance will focus on partnering the best-of-breed providers of e-business solutions in the United States and marrying these with local business-to-business companies."

IT Capital managing director Keith Phillips said his company would use its international network to match local and overseas technologies where "the sum is greater than the parts."

One of IT Capital's associates, Terabyte Interactive, would provide web development expertise.

"Bringing in pre-formed solutions accelerates deployment time and reduces risk," said Mr Jackson.

Ernst & Young has also included Exonet, a New Zealand-developed business-to-business e-commerce system in which IT Capital has invested, among the portfolio of products it takes to its clients.