OpenPeak secures $30M Series C

OpenPeak Inc. is expected to announce a $30 million Series C funding on Wednesday that will allow it to begin manufacturing and launch its OpenFrame line of devices.

The new capital comes from existing investors RRE Ventures LLC of New York and Castletop Capital of Austin, Texas, and individual investors John Sculley, former CEO of Apple Inc.; and J. Tomilson Hill III, vice chairman of Blackstone Group LP.

The group backed OpenPeak's two prior rounds, which raised a combined $20 million.

While declining to specify a valuation for the Series D, Dan Gittleman, CEO of OpenPeak, did say that the company's valuation has increased in each of its rounds.

Gittleman said the company's aim is to "transform the home phone into the third screen in your house, so that itÕs basically an Internet and telephony portal."

The Boca Raton Fla.-based company's OpenFrame products are versions of the home phone that include a high-resolution touch screen interface and custom software that provides telephony, access to the Internet and other digital media on a single device.

OpenPeak is betting that with the battle between telecom and cable companies to provide triple-play television, phone and Internet services becoming more heated, they will be looking for devices like OpenFrame that enhance their offerings and might retain customers.

"It's a telephone, but it will also allow you to surf the Web, instant message, in a simple-to-use fashion," said Gittleman. "Since it's an always-on device, if you want to just check the weather or order a pizza from Pizza Hut you can get it in 2 or 3 clicks instead of booting up your computer or going to the TV."

OpenPeak plans to begin rolling out OpenFrame devices in 2008, and has already signed up telecom giant Verizon Communications Inc. as its first customer.

The company will be targeting telecoms, cable providers and large computer companies as its primary customer base, with the devices deployed under a white label.

Other unannounced customers will also begin offering the devices in 2008, according to Gittleman.

"We have a large number of committed orders already as we head into production," said Gittleman. He expects demand for the devices to be strong enough that the company will reach profitability in 2008. Bartlit Beck Herman Palenchar & Scott's Denver office represented OpenPeak in the financing, while the investor group turned to Proskauer Rose LLP of New York.