It’s not the 16x return that VCs expect to get from the sale of
Redpoint launched with much fanfare during the Internet bubble, but its first two funds haven’t produced spectacular returns.
Still, 2009 is turning into a pretty decent year for Redpoint. LifeSize will be its third acquisition this year.
Logitech last week agreed to pay $405 million for LifeSize, an Austin, Texas-based maker of high-def video communications products. LifeSize had previously raised $90 million from Redpoint,
In September, Redpoint portfolio company Kazeon, which makes discovery software for law firms, was sold to EMC for an undisclosed amount. Kazeon had previously raised about $75 million from Redpoint, Clearstone Venture Partners, Focus Ventures, Goldman Sachs, JK&B Capital, Menlo Ventures, Red Coat Capital and Wilson Sonsini Goodrich & Rosati.
In October, Tellabs agreed to pay $165 million in cash for WiChorus, which makes a wireless core for IP-based 4G networks. WiChorus had previously raised a total of $42.35 million from Redpoint, Accel Partners, Mayfield Fund and Pinnacle Ventures.
Redpoint expects one more liquidity event by the end of the year. Portfolio company Fortinet, which provides network security, set its IPO terms on Oct. 29. It plans to sell 12 million shares for $9 to $11 per share. Redpoint is the company’s largest VC shareholder, with about 8.9 million shares.
The limited partners in Redpoint’s first two funds could certainly use some good news. Redpoint’s first fund, a $600 million vehicle raised in 1999, has performed poorly, according to a report issued by the Regents of the University of California on Dec. 31, 2008.
The university committed $30 million to fund I, of which $29.4 million had been drawn down as of the end of last year. The report shows that the university has received just over $8 million in cash back from Redpoint and that the current net asset value of its remaining interest in fund I is just under $11 million.
Cash out plus current NAV total a little over $19 million, for an investment multiple of 0.65x.
Redpoint II, a $750 million fund raised in 2000, has also not posted stellar results. The California Public Employees’ Retirement System committed $9 million to fund II, of which $8.55 million has been drawn down, according to a CalPERS report issued on March 31.
CalPERS has received just $3.2 million in cash distributions so far. Still, CalPERS says the total value of its stake is $9.59 million, for an investment multiple of 1.1x.
PE Week was unable to find any performance data for Redpoint III, a $400 million fund raised in 2006, or Redpoint Omega, a $250 million fund raised in 2007. —Lawrence Aragon
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