Madrona Venture Group Closes Over $500 Million For Two New Funds

By Dan Anderson ● January 3, 2021
  • Madrona Venture Group — a Seattle-based leading venture capital firm — announced it has closed over $500 million in new funds. These are the details.

Madrona Venture Group — a Seattle-based leading venture capital firm — announced it has closed over $500 million in new funds. Two funds were closed simultaneously: Madrona Venture Fund 8 was closed at $345 million and Acceleration Fund 2 closed at $160 million. Both of the funds were heavily over-subscribed. These funds will be deployed on complementary strategies — building startups from the seed stage primarily in the Pacific Northwest and from an acceleration stage, throughout North America.

Madrona’s Venture Fund 8 is focused on the core and the lasting strategy of supporting entrepreneurs who have founder-market fit from seed and Series A stages. And it will be used for helping them build and scale throughout the company journey. 

And Acceleration Fund 2 is focused on investing in teams that have found product-market fit, generally Series B or C stage, and value the Seattle mindset for growth – curiosity, agility, and an iterative culture. These new Madrona funds come on the heels of six portfolio IPOs in the last 5 years including Smartsheet, Snowflake, and Accolade.

The firm has added 3 exceptional Managing Directors over the past few years with deep operating experiences including S. Somasegar, Hope Cochran, and Steve Singh. Currently, Madrona companies cover many different technology sectors including cloud computing, applied AI/ML, and SaaS.

With Madrona Fund 8, Madrona continues to support early-stage company formation across the greater Seattle region. And over 90% of investments in Fund 7 were in companies at the seed or Series A stage with more than half of those being seed investments.

A major component of Madrona’s seed strategy is supporting the work of Madrona Venture Labs. Madrona Venture Labs – which is run by experienced founders Mike Fridgen and Jay Bartot – brings a team of operators to help entrepreneurs through the first steps of company building. And Madrona also supports accelerators across the region like AI2 Incubator, Female Founders Alliance, Ready Set Raise, Techstars and Pioneer Square Labs.

In 2019, Madrona also raised the first Acceleration Fund for initial investments in companies that had found product-market fit. At this stage, companies need strategic partnerships and understanding of market forces that can influence their journey and experienced advisors familiar with go-to-market strategies and building teams to scale. And Madrona’s deep relationships with Amazon and Microsoft and enterprise customers as well as the roll up their sleeves attitude comes to bear in these investments. The previous Madrona investments at the acceleration stage include Snowflake, Accolade, UIPath, Flexe, Clari, VNDLY, Go1, Coda, Trade Coffee, and Rec Room.

KEY QUOTE:

“Inventors and founders in Seattle and the Pacific Northwest are fueling the economic success of our region and beyond. While it is increasingly possible for companies to be built anywhere, few places have access to talent, understanding of market problems and the ability to build emerging solutions like greater Seattle. The Seattle Mindset, combining curiosity, iteration and agility, has proven to build some of the most innovative and valuable companies in the world. Madrona’s new funds enable us to continue our two complementary strategies – working with entrepreneurs who have founder-market fit from Day One through the full company journey and providing that same hands-on approach to companies that have reached product-market fit and are accelerating their growth.” 

— Matt McIlwain, Managing Director at Madrona Venture Group