Seattle’s Madrona Venture Group has long been one of the most prominent early-stage funds in the backyard of Amazon and Microsoft. Now, however, the firm is starting to look beyond the Pacific Northwest with the launch of its $100 million Acceleration Fund, which will expand its geographic reach to the entire U.S. and give it a vehicle to invest in later rounds.
The new fund will see Madrona make more investments at the Series B and C stage. While Madrona has made a wide variety of investments over the years, including some into consumer services, its focus has long been on enterprise cloud companies, ranging from Apptio to Smartsheets and Heptio (which VMware recently acquired). We’ll see a similar focus with this new fund, as Madrona managing director Matt McIlwain told me, with an emphasis on cloud and applied machine learning companies. Unlike Madrona’s current focus on the Pacific Northwest — and Seattle in particular — this fund will also invest in companies across the country.
“Our long-time strategy has been early stage, broad-based technology, Pacific Northwest,” McIlwain told me. “We call it an acceleration fund because we want to differentiate it from what some people call opportunity funds, which is more of a ‘put more money into my existing company.’ This is not that. This is new money into great companies that have reached that initial product-market fit and that want to accelerate their growth.”
Madrona also expects that these companies have reached product differentiation and founders and key executives that can sell those products.
McIlwain noted that Madrona has selectively made some of these investments in companies like Tigera, Snowflake and Accolade over the years already. This new fund gives the firm a dedicated vehicle to invest in companies where it believes it can add more value at this later stage.
“When I joined Accolade almost four years ago – the mission was to accelerate the company’s growth by finding the best talent to build a world-class product and distribution team,” said Accolade CEO Raj Singh “To do that, you need world-class partners. Having worked with Matt McIlwain and Madrona on both the Apptio and Amperity board of directors, reaching out to Madrona was high on my priority list on day one. And they have lived up to my expectations – helping with customer acquisition, critical hires, key partnerships, and invaluable counsel.”
McIlwain told me that Madrona has yet to make its first investment from the new fund. “But we’re eager to find that first one that’ll be special enough,” he said.
Source: Tech Crunch