Redpoint Ventures’ Menlo Park offices must be an awfully happy place to have been these last 12 months. The VC has racked up billions of dollars’ worth of IPOs, sales to strategic buyers and even launched itself into a handful of new investments as of late. Some of its deals—like eye-popping multiples on Cloud.com, or its massive stake in successful IPO Homeaway—have made big headlines, but the real tale of the tape will come when its more recent funds’ IRR are revealed.
Redpoint Ventures I, an astonishing $600 million first time fund with a vintage of 1999, also comes with a net IRR of -6.8%, according to the Regents of the University of California, an investor. Redpoint Ventures II, which put together more than $1 billion, and in which the University of California and the state’s CalPERS pension system both invested, generated a multiple of 1.30x, according to CalPERS, and a net IRR of 4.7%, the Regents of the University of California data shows.
Other Redpoint funds, including a $400 million 2010 vehicle dedicated to early-stage tech and Internet investments, and a 2006 vehicle with a similar strategy, haven’t generated truly measurable results yet, what with their only being so far from inception. But, when those numbers come back, they will be in part fueled by the deals struck by the VC in the last 12 months—provided, at least, they exercise prudent market timing in unloading hundreds of millions of dollars’ worth of post-IPO shares when it’s time to get liquid. Redpoint’s not done yet, either, still investing in companies like games titan Kabam (May 2011), and setting itself up for more mega-exits in the future. The firm’s earliest LPs took a gamble on big talent at the height of the dot-com bubble, but those that stuck through thick and thin are seeing a very, very bright light at the end of the tunnel.
[slide title="Citrix acquires Cloud.com"]
The Deal: Florida-based software and services company Citrix Systems spent, TechCrunch said, between $200 million and $250 million to buy Cloud.com, in which Redpoint was an early investor. The deal generated a smash-hit return multiple for the VC as the cloud industry has gotten increased attention and hype, but only a few exits of this magnitude. Specific stake sizes were not publicized.
[slide title="Homeaway goes public"]
The Deal: To date, Homeaway’s IPO has been a success, gaining more than 50% from its debut price of $27/share and boosting its market cap to $3.33 billion as of the close of trading Tuesday. Following the IPO, it was reported Redpoint’s stake amounted to a whopping 26% in the now-listed online vacation rental broker—meaning the value of Redpoint’s investment, some of which came in Homeaway’s earliest stages, is worth a stunning $865.8 million.
[slide title="Clearwell Systems bought by Symantec Corp."]
The Deal: In May, listed, Calif.-based strategic bidder Symantec Corp. swooped in on Clearwell Systems, an e-mail storage and documentation firm, making a whopping $390 million offer to acquire the company, taking the $20 million Clearwell still had on its balance sheet in the process. Because the company was private, stakes in Clearwell were never specifically publicized.
[slide title="Yahoo! buys IntoNow"]
The Deal: In April, Yahoo! bought IntoNow, the Sunnyvale, Calif.-based producer of streaming media apps that connect mobile users to TV content. Terms of the deal were not publicized and Redpoint’s stake size was unknown. The VC declined to comment for this story.
[slide title="Responsys Inc. IPO"]
The Deal: Even though the IPO wasn’t that big—at just under $80 million—don’t let the low price tag fool you. The S-1 from the IPO credits entities affiliated with Redpoint controlling about 11% of Responsys’ stock, meaning that the VC’s stake is worth more than $83 million, judging on where the software & service provider’s market cap wound up at the close of trading Tuesday. Since Redpoint began investing as early as 2000 in the early rounds of the company, Responsys’ IPO represents a validation for the VC a long way in the offing.
[slide title="Qihoo’s IPO"]
The Deal: Chinese Internet services and software distributor Qihoo 360 Tech Co. listed in late March, at possibly the worst time in recent memory for a China-based company to be going public. Many stocks with operations in China have found their shares swept down river in Muddy Waters, even after an exceptionally strong opening. Qihoo stock priced at $14.50 a share, then shot up past $30 each, before enduring a months-long stagnation that continued through Tuesday afternoon, when its stock closed at $24.69. Still, given Redpoint’s track record investing in cloud services companies, Qihoo will likely fare well.
[slide title="Answers.com taken private by Summit Partners"]
The Deal: Also in April, another Redpoint investment found itself a buyer. However, it’s not totally clear whether Redpoint had remained in its Answers.com after the company’s IPO, or if it had sold out before Summit Partners took it private, once again, for $127 million. In the time since, Summit has taken to restructuring the company, including widespread layoffs.
[slide title="Salesforce.com deals for Heroku"]
The Deal: California-based Salesforce.com, which is publicly traded, shelled out $212 million to buy the cloud application platform. Once again, at a time when VCs have been plowing cash into the cloud technology space, Redpoint is standing out among investors by making another big exit. Salesforce CEO Marc Benioff says the deal will fuel his company’s app development ambitions—maybe Redpoint should have argued for its payment in shares, instead of cash!