Redpoint’s 1st Fund Exceeds Expectations

Redpoint Ventures, a Menlo Park, Calif.-based venture capital firm formed two months ago by principals at Brentwood Venture Capital and Institutional Venture Partners, is expected to announce today that it has raised $600 million in its first fund.

The fund, which will invest in companies developing technologies for the Internet, electronic commerce, broadband communications and digital television, is the largest first fund of its type ever formed, according to Venture Economics, a data firm. The fund was originally expected to raise about $500 million.

“The size of this fund and the fact that we raised it so quickly signifies three key points,” said Brad Jones, a managing director at Redpoint in Los Angeles. “Investors are responding to the enormous market potential of broadband communications and the Internet, the dramatic track records of this team and the belief in our focused strategy.”

Jones is also a principal at Brentwood, which is based in San Francisco and Los Angeles.

Redpoint’s first Southern California investment will be $8.5 million in Bizbuyer.com, a Santa Monica-based firm that operates a business-to-business Web site, Jones said.

Several months ago, principals from Brentwood and Silicon Valley-based IVP said they would join forces to create two narrowly focused venture funds, one for technology and the other for health care. The decision is an example of the high degree of specialization now required to make smart venture investment decisions, Jones said. The health-care fund is expected to raise about $250 million and will be called Palladium Ventures.