INSUBCONTINENT EXCLUSIVE:
Madrona Venture Group typically flies under the radar of Silicon Valley reporters, partly because it in Seattle
But the 23-year-old, early-stage venture firm has been having a pretty good run of late — success it just used to close its seventh fund
with $300 million, the same amount it raised for its sixth fund in 2015.
Among its investors: Bezos Expeditions, Vulcan Capital, and
billionaire John Stanton, who is the chairman of the board of Trilogy International Partners (as well as the majority owner of the Major
League Baseball team the Seattle Mariners).
Madrona momentum didn&t build overnight
Four Madrona portfolio companies that have IPO&d over the last 20 months — the cloud software companies Smartsheet, Apptio, the real
estate site Redfin, and the RFID chip maker Impinj — took on average 12 years to get into the hands of public market investors.
Madrona,
the firm is quick to note, was there from the start, writing seed and Series A checks that today range from $200,000 to upwards of $5
(The firm has, on rare occasion, invested upwards of$30 million in a single company over the life of its investment.)
Yet those four
now-public companies share another trait in common; they&re all based in the Pacific Northwest, which includes greater Seattle but also
cities like Portland, Ore.; Vancouver, British Columbia; and Spokane, Wa.
That no accident
About 90 percent of Madrona deals are local, where the startup scene has seemingly expanded dramatically in recent years
In addition to Madrona and other local venture shops, Google, Facebook, Alibaba and Snowflake Computing have each opened engineering offices
Meanwhile, the University of Washington Computer Science Department — last year renamed the Allen School — is finishing another major
building to expand its ability to graduate more CSE students
(A $40 million gift from Paul Allen, who cofounded Microsoft before establishing Vulcan Capital, helped toward that end.) .
Asked how
fundraising went this time around, Madrona team describes it as smooth, crediting those IPOs as well as investors& greater appreciation that
two of the four largest companies in the world — Amazon and Microsoft — are based in its backyard.
As for how many startups the firm
will look to back with its new fund, it suggests the number will be around 40, which is how many startups it backed from its fourth
fund.
One of those earlier startups isPulse Labs, a Seattle-based startup that helps brands understand how real people interact with their
voice apps and raised $2.5 million in January, led by Madrona.Another is XNOR, a two-year-old, Seattle-based artificial intelligence startup
that announced $12 million in Series A funding just last week led by Madrona
We wrote about it here.
Generally speaking, it tells us, when Madrona invests, it looking to either leverage its growing expertise in cloud
computing and machine learning, or it looking to leverage its relationships with previous Madrona entrepreneurs and partners.
Given how many
years it has been in business at this point, that now a sizable circle.
