Redpoint Ventures brilliant investment in Wiki.Answers paid off – big time

One thing I missed in the analysis of the Answers.com sale to a private equity firm was the real winner: Redpoint Ventures. You can read the release here. So after you read through that, consider the private equity purchase offer of $127 million. (via paidcontent.org).

Now that you’re up to speed on what’s happening…in less than four years, Redpoint Ventures seemingly doubled their money by putting up a large amount of cash into, at the time, a money losing website.

It will be interesting to see if Answers.com can become  a larger business and really scale up their revenue which last we looked, was only 1.6 cents per visitor, based on their SE filings and quantcast numbers. To grow into a real powerhouse and justify the Private Equity takeover, Answers.com will have to deliver scaled up revenue, continued growth and movement on the registered users side. With foursquare reportedly bagging six million registered members in less than two years…the more than ten year old Answers.com looks positively slow on user acquisition by comparison.