Rearden Steel Technologies, the Palo Alto start-up led by tech guru Steve Perlman, has received $67 million in venture funding -- a large amount of money in a market where most young companies aren't getting any cash at all.
The company, which takes its name from a fictional, government-phobic firm in the Ayn Rand novel ``Atlas Shrugged,'' remains shrouded in secrecy: The doors at its offices are locked, and incoming traffic is closely monitored.
Now the buzz is likely to increase, given the caliber of new investors. Led by America Online, they include Cisco Systems, EchoStar Communications, Mayfield Fund, Vulcan Ventures, Barksdale Group, Washington Post and Macromedia Ventures.
Perlman has allowed only that Rearden Steel is a ``consumer-electronics company, creating solutions for home entertainment,'' and that it is developing hardware and software products.
The 40-year-old Perlman is co-founder of WebTV and creator of an advanced modem that allows consumers to play games over the Internet. It is Perlman's fourth start-up. He previously worked at Catapult, General Magic and Apple Computer. In an interview, Perlman said the Rearden Steel products won't be unveiled for at least several months.
Perlman made selected leaks when the company was launched in January 2000. Then, he giddily described it as a combination of business incubator and playground for lovers of state-of-the-art technology. As the market tanked, however, Perlman has scrambled in several directions in search of a more focused business model.
It took him a while to fold several ideas into one focused strategy, he said: ``It has evolved from a non-traditional incubator to this start-up,'' he said. And before that, it took a few years of searching. ``There were some wild, hairy things I tried doing that didn't work,'' he said.
A year and a half ago, he shelved an idea to develop holographic glasses that would receive 3D images from an emitter, to create the impression for the wearer of being in another room.
Perlman said Rearden Steel has already filed 38 patents.
While most companies that receive funding these days are taking several months to scrape it up and have to lay off workers, Rearden Steel drummed up so much interest when it started looking for money about three months ago that it was overwhelmed with offers, Perlman said.
``We were oversubscribed. That says something about what people believe is a great business opportunity and also about the barriers to entry,'' he said.
The company employs 110 people, up from 12 people last year. Before the funding, Perlman had been running the firm on his own money. He said the management retains full control of the firm, and that it gave away far less than half the firm's shares to the investors.
There's still a lot of work to go. ``We have a long way to go in terms of putting everything together,'' he said. Though he wouldn't pledge that it would be ready within the next year, he did rule out that it would take ``years.''
The company said Kevin Fong, managing partner at Mayfield, and Paul Bosco, a vice president at Cisco, had joined as board members. They join Perlman; Gary Moore, a partner at law firm Cooley Godward; and Bill Keating, Rearden Steel's chief operating officer.