Yahoo’s acquisition of Musicmatch for $160 million will make more than Musicmatch employees happy. The folks over at Menlo Park venture capital firm Redpoint Ventures might be corking the champagne too.
When it launched at the height of the Internet bubble in 2000, Redpoint Ventures was supposed to be the next hot venture firm. Partner Geoff Yang vowed the firm would rank among the top three, beating out Benchmark Capital and others.
But the Internet bubble burst, and Redpoint’s fortunes soured. We’ve followed them over the past few years, and they’ve struggled to produce an exit. Sure, they’ve manage to sell off a few portfolio companies, but most barely at cost, and just as often under cost. This acquisition comes after about $37 million was pumped into Musicmatch by Redpoint and a couple of other investors, which suggests Redpoint got a solid return on the deal. It’s just the latest sign that the economy is recovering — and with it the outlook for venture capital.
Partner Geoff Yang has long been preoccupied with matching up Southern California entertainment talent and Silicon Valley engineering talent.
Yahoo‘s acquisition of Musicmatch Inc., a provider of personalized music software and services, is a good example of that vision.