Tuesday , 13 November 2018

For Madrona Venture Group, four IPOs in 20 months and a brand-new fund

Madrona Venture Group usually flies below the radar of Silicon Valley reporters, partly as a result of it’s in Seattle. However the 23-year-old, early-stage enterprise agency has been having a fairly good run of late — success it simply used to shut its seventh fund with $300 million, the identical quantity it raised for its sixth fund in 2015.

Amongst its traders: Bezos Expeditions, Vulcan Capital, and billionaire John Stanton, who’s the chairman of the board of Trilogy Worldwide Companions (in addition to the bulk proprietor of the Main League Baseball workforce the Seattle Mariners).

Madrona’s momentum didn’t construct in a single day. 4 Madrona portfolio firms which have IPO’d over the past 20 months — the cloud software program firms Smartsheet, Apptio, the true property website Redfin, and the RFID chip maker Impinj —  took on common 12 years to get into the palms of public market traders.

Madrona, the agency is fast to notice, was there from the beginning, writing seed and Sequence A checks that right this moment vary from $200,000 to upwards of $5 million to $7 million. (The agency has, on uncommon event, invested upwards of $30 million in a single firm over the lifetime of its funding.)

But these 4 now-public firms share one other trait in widespread; they’re all primarily based within the Pacific Northwest, which incorporates higher Seattle but in addition cities like Portland, Ore.; Vancouver, British Columbia; and Spokane, Wa.

That’s no accident. About 90 % of Madrona’s offers are native, the place the startup scene has seemingly expanded dramatically in recent times. Along with Madrona and different native enterprise outlets, Google, Fb, Alibaba and Snowflake Computing have every opened engineering workplaces. In the meantime, the College of Washington Pc Science Division — final yr renamed the Allen School — is ending one other main constructing to develop its capacity to graduate extra CSE college students. (A $40 million present from Paul Allen, who cofounded Microsoft earlier than establishing Vulcan Capital, helped towards that finish.) .

Requested how fundraising went this time round, Madrona’s workforce describes it as easy, crediting these IPOs in addition to traders’ higher appreciation that two of the 4 largest firms on this planet — Amazon and Microsoft — are primarily based in its yard. 

As for what number of startups the agency will look to again with its new fund, it suggests the quantity will likely be round 40, which is what number of startups it backed from its fourth fund.

A type of earlier startups is Pulse Labs, a Seattle-based startup that helps manufacturers perceive how actual individuals work together with their voice apps and raised $2.5 million in January, led by Madrona. One other is XNOR, a two-year-old, Seattle-based synthetic intelligence startup that introduced $12 million in Sequence A funding simply final week led by Madrona. We wrote about it here.

Typically talking, it tells us, when Madrona invests, it’s seeking to both leverage its rising experience in cloud computing and machine studying, or it’s seeking to leverage its relationships with earlier Madrona entrepreneurs and companions.

Given what number of years it has been in enterprise at this level, that’s now a large circle.

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