Madrona Venture Group, one of the most active venture capital firms based in the Seattle area, said Tuesday that it has raised a new, $300 million fund to support early stage technology businesses in the region and beyond.
The fund is the firm’s seventh in its 23 years, bringing the total funds under management to $1.6 billion, and will be used in much the same way as its past six – to invest in young technology startups headquartered in the Pacific Northwest. Madrona generally invests in companies when they are in their early years, and then often invests again before the startup’s acquisition or an initial public offering (IPO).
Seattle-area companies frequently complain of a dearth of overall funding in the region, and often go to Silicon Valley and New York investors for funds. But new players have joined the local venture capital scene recently, including an $80 million fund from Pioneer Square Labs and a $28 million fund from Flying Fish Partners (which the firm hopes will grow to $80 million soon).
Madrona, founded in 1995, has seen four of the companies in its investment portfolio go public in the last two years: Redfin, Impinj, Smartsheet and Apptio. The average time from the first Madrona investment to the IPO was 12 years, managing director Matt McIlwain said.
“It takes a long time to build great companies,” he said. “None of this stuff happens quickly.”
The firm doesn’t focus too specifically on any one area of technology, but McIlwain called out the region’s strengths – cloud computing, machine learning and augmented reality – as technologies the firm is interested in.
Investors in this fund include previous backers such as Bezos Expeditions, one of Jeff Bezos’ personal investment firms, Paul Allen’s investment vehicle Vulcan Capital, former telecom executive John Stanton and Trilogy Equity Partners.
The $300 million figure seems to be the magic number for Madrona, which raised identically sized funds in 2012 and 2015.