It's one of the largest first rounds of funding in history, and it may signal an emerging trend in venture capital. OpNext, a supplier of optical components, pulled in a first round of $321 million from Clarity Partners and Marubeni Group of Japan.

Clarity and Marubeni pooled their resources to buy an undisclosed equity stake in OpNext, which was spun off from the optics components business unit of Hitachi (NYSE: HIT). Even with the huge cash infusion, Hitachi is still the majority shareholder of the independent company, says Harry Bosco, OpNext's chief executive officer. The valuation of the deal was in excess of $1 billion, Mr. Bosco says, so Clarity and Marubeni own less than one-third of the company, which is based in Eatontown, New Jersey.

Mr. Bosco, a veteran telecom exec who was most recently a venture partner at Clarity, says he expects to see VCs do more deals similar to OpNext. "Companies don't have enough money to fund everything internally," he says. "They will look for assets to spin out and capitalize on."

As big a round as it was, OpNext isn't the largest first-round deal in history. That title belongs to Zhone Technologies, which raised $500 million in 1999, says Jesse Reyes, vice president of research firm Venture Economics.

The optics components business group had solid technology but minimal sales outside of Hitachi, Mr. Bosco says. Clarity and Marubeni saw the potential to turn that group into an independent company, and it didn't take long to convince Hitachi that it was the right way to go.

Since OpNext was spun off in February, its sales to Hitachi have already declined to 20 percent of its total, thanks to increased sales to customers like Alcatel, Cisco Systems, Lucent Technologies, and NEC. OpNext's annual sales, which totaled about $200 million last year as a group within Hitachi, will experience "double-digit growth" this year, Mr. Bosco says. Within three to four years, it hopes to grow sales beyond $1 billion a year.

While sales of optical components are sluggish at the moment because of the downturn in IT spending, Mr. Bosco says OpNext is well positioned because it's a niche player compared to big competitors like JDS Uniphase. "We should be OK if the downturn continues," he says.

Profitability is months away. OpNext is burning through about $2 million a month in cash, but by the fourth quarter it will break even and start to self-fund operations, the CEO says.

Mr. Bosco anticipates an IPO next year if the market recovers. Money from an IPO -- and this new venture funding -- will be used mainly for acquisitions of technology and, to a lesser extent, other companies, in order to flesh out OpNext's product offerings. Internally, it is pressing ahead with new product development. The company will have a prototype of a 40-Gbps transceiver completed by the end of the year and be ready to start production in the third quarter of 2002.