Stealth TV
STEVE PERLMAN thinks he can change home entertainment again, and some high-profile investors are betting $67 million that he is right.
That's the amount that the investors -- which include AOL Time Warner, Cisco Systems and EchoStar Communications -- have funneled into Rearden Steel Technologies, a year-old Palo Alto, Calif., company that is Mr. Perlman's newest venture. The 40-year-old entrepreneur is best known for forming WebTV, since purchased by Microsoft, which uses set-top boxes to allow consumers to surf the Web from their televisions.
Once again, Mr. Perlman is attacking home entertainment, though he won't say much more about Rearden, whose name comes from an Ayn Rand novel. But several people familiar with the company's plans say it is developing a more-powerful box that would act as a central server for the home, sending and receiving information from numerous devices including televisions, stereos and computers. For example, the device might take in digital music or movies from a cable or satellite signal and distribute them to any number of devices in the house.
The device, these people said, would also serve as a repository for digital information so that a family could record, organize and store movies, music and television shows. Digital recording systems such as TiVo now store only TV signals, and only for one set. Rearden is working on a box that would store different types of digital information and send it to numerous devices, they added.
"A lot of people are doing incremental things" in these areas, but Rearden is "biting off a lot at once," says one person who's seen some of the company's plans.
The corporate partnerships would tend to support such plans -- AOL Time Warner in media and cable, Cisco in networking hardware and EchoStar in satellite TV. Venture-capital firms investing in the company include Mayfield, Paul Allen's Vulcan Ventures and the Barksdale Group, Jim Barksdale's venture group.
All Mr. Perlman will say is that he is developing hardware and software for home entertainment. And, oh yes, he says, "the stuff that we're doing is really revolutionary."
Watch the Money
ANOTHER television-related company, MetaTV Inc., is bringing in more cash and talking about what it is doing. The company is announcing today that it has raised $28 million in a second round of financing that was led by two cable television companies, Cox Communications and Comcast. Early investors Redpoint Ventures and Rosewood Venture Group also put money into the company in this round.
The Sausalito, Calif., company sells software that translates Web content into a format that is easy to see and navigate on a television, using a remote control rather than a keyboard. MetaTV says its software lets cable operators roll out interactive services to their users so that they could buy a book or request a traffic report from the television.
Samuel Schwartz, a managing director at Comcast's venture unit who is taking a seat on MetaTV's board, says the technology is a boon for cable operators who hope to make their systems more enticing to new viewers. MetaTV "has developed technology that will allow cable operators to bring interactive television services to market quickly without a lot of incremental capital investment," he says.
Way-Out Money
WHERE ARE elusive telecom profits buried these days? Perhaps in out-of-the-way settlements such Walla Walla, Wash., and Chico, Calif. At least, that's the approach of New Edge Networks, which is getting $40 million from investors that include Goldman Sachs Group, Crosspoint Venture Partners and Accel Partners.
The Vancouver, Wash., company sells digital subscriber lines and other networking connections to businesses in 350 second- and third-tier cities in 29 states. First Union is also contributing $37.5 million in additional debt funding. That brings the 22-month-old firm's total debt and equity raised to $380 million, which New Edge says will last until it reaches operating profitability at year-end 2002.
Wireless World
TWO COMPANIES working on creating wireless networks are announcing new rounds of funding today.
Atheros Communications, a maker of chips for wireless devices, has raised $66.8 million in a round of financing led by mutual-fund giant Fidelity Management & Research. That brings total investment in the Sunnyvale, Calif., company to just over $98 million. Atheros is developing chips that let all sorts of devices -- from PCs to laptops to hand-held computers -- talk to each other and the Internet wirelessly.
Meanwhile, Mobilian of Portland, Ore., is announcing that it has raised $35 million in a round led by venture firm Jafco America Ventures and Dell Ventures, the investing unit of Dell Computer. Mobilian develops software and hardware that can be used to allow devices to interact wirelessly.