Danger, and its IPO

Updated again

It’s dangerous to predict your IPO. Hank Nothhaft, chief executive of Danger, the Palo Alto company providing the software for the T-Mobile Sidekick, said confidently back in 2004 that Danger had raised its last round of venture capital. An IPO was in the cards for 2005, he said.

But that’s history. Danger has just raised $10.3 million more in funding. It plans to top it off for a total new injection of $12.3 million fifth round of capital, according to a regulatory filing — and it comes at a time of increasing competition.

Redpoint Ventures, Mobius and T-Mobile Venture Fund were among the backers. (Update: We’ve heard from the company, and turns out the investors mentioned are incorrect. This is more likely money from a strategic investor; we’ll be confirming this and other details about the amount — which may also be wrong — next week).

The company had already raised $114 $134 million. We requested comment early this morning, but still haven’t heard back from the company. Increasingly the software it provides (it doesn’t provide the hardware) appears headed toward commodity status.

Berggi, a Houston start-up, is just the latest to try to “make dumb phones smart,” having raised $3 million from investors like Adara Venture Partners, to offer a download that bundles email, IM and texting capabilities, at $9.99 per extra month, according to GigaOM. (With Berggi, your phone needs to be data-enabled. It doesn’t work over Verizon or Nextel networks.)

You could argue that the device that goes with Danger’s software (called the “hiptop” by Sharp, and the “sidekick” by T-Mobile) is unique, but the effective bundle of services its offering is no longer as unique as it was back to years ago.

Update II: We’ve since talked with Hank Notthaft, and clarified a few things.
–He maintains that he never set a timeline for the IPO. We didn’t say he did, but did say he said in 2004 that it was an option for 2005. He says we over-interpreted that earlier conversation.
–The company raised $10.3 million from an undisclosed company that is a Danger customer, and thus this is not a VC round — and so Hank is still living by his word in 2004 that he wouldn’t raise another VC round. The $12.3 million total number referred to above includes $2 million in extra stock the company has allocated for various deals Danger signs; partners often request a portion of payment in stock, he said.
–The company is experiencing considerable demand, so much that it is hiring engineers aggressively, which is why it keeps opening more offices, most recently in Mass. and Atlanta. While the company is not yet profitable, it will be shortly, Hank said. “We’re not declaring victory, but we’re certainly happy with the way things are going,” he said.
–As for our Berggi comment and the threat of commoditization, Hank disagreed. He said Danger’s converged client-server application is unique. Danger and RIM are the only two selling such a package to carriers. Even Danger and RIM are different, he said. Danger serves a more youthful, more IM-focused clientele, while RIM serves a more professional, email-focused crowd, he said.
–He said the company’s valuation increased with the latest investment.