SAN FRANCISCO (Reuters) - The way WebTV co-founder Steve Perlman sees it, digital entertainment is too complicated for couch potatoes, something he plans to change with a new company backed with $67 million in venture capital.
After 15 months in development, Perlman's Silicon Valley-based Rearden Steel Technologies Inc. made its official debut on Monday, announcing a large round of first-round funding.
Investors included AOL Time Warner Inc. (NYSE:AOL - news), Cisco Systems (NasdaqNM:CSCO - news), EchoStar Communications Corp. (NasdaqNM:DISH - news), Washington Post Co. (NYSE:WPO - news) and Macromedia Ventures, the venture capital arm of software developer Macromedia Inc.(NasdaqNM:MACR - news). AOL Time Warner led the round of investing.
Also joining the financing, one of the largest first-time funding rounds for a start-up this year, were the Mayfield, Vulcan Ventures and the Barksdale Group venture firms.
Perlman told Reuters that investors were attracted to Rearden Steel, which will design hardware, software and networking products, for its plans for streamlining digital entertainment.
Perlman, who founded Rearden in January 2000 and is chief executive and president of the firm, said that consumers today must contend with too many devices, too many remote controls and too many wires linking too many systems in explaining the need to simplify the standard.
``If you look at home digital entertainment today, there are a lot of interesting possibilities,'' Perlman said. ``But none of these things have really taken off.''
Perlman said that digital home entertainment products today -- such as hard drives for recording and playing video -- are at a similar stage of development as early handheld devices a decade ago.
And like early handheld devices, digital home entertainment needs breakthrough products to really become widely accepted by consumers.
``You've got to reduce the complexity,'' Perlman said.
With 38 patent applications filed, Rearden Steel is on track to meet that goal, Perlman said, noting that many of the start-up's backers also are strategic partners.
``We feel we've changed views of what can be done in the home,'' Perlman, a former scientist at Apple Inc., said.
More investors are likely, because Rearden Steel's first funding round was over-subscribed and the start-up had to ask some prospective investors to hold off until future financing rounds, Perlman said.
Perlman's reputation in the consumer electronics marketplace was critical to the start-up's raising so much money in a tight venture financing environment. Rearden Steel's focus and string of patent applications also helped, investors said.
According to Kevin Fong, managing partner at Mayfield, a ''vision to solve real consumer problems'' and a ``solid patent portfolio'' helped the start-up earn the attention of investors.
Palo Alto-based Rearden Steel has about 100 employees, including hires from Microsoft Corp. (NasdaqNM:MSFT - news), Apple Computer (NasdaqNM:AAPL - news), TiVo (NasdaqNM:TIVO - news), ReplayTV, Cisco and Sun Microsystems Inc (NasdaqNM:SUNW - news).
Rearden Steel, which also named two new members to its board -- including Fong, already operates a digital film technology studio in San Francisco.
Rearden Steel, which also named Paul Bosco, vice president and general manager of Broadband Products and Solutions at Cisco to the board, now has five directors. Bosco does not have voting status.