Tag: Announcement

Our Investment In Lexion: Finding The “Data Needle” In A Haystack Of Documents

Today, Lexion announced a $4.2 million Series Seed funding round led by Madrona, and we couldn’t be more thrilled.

The business world is filled with and ruled by an ever-increasing mix of complex documents that need to be constantly managed – from customer and vendor contracts to insurance agreements to commercial real estate agreements. Exactly how and when “business gets done” is determined by the key details in these documents, and yet the process for tracking and acting upon these details is often highly manual, time consuming, and inconsistent. This is where the power of Artificial Intelligence (AI) and Natural Language Processing (NLP) come in.

Enter Lexion, a new offering for underserved mid-market businesses that provides a powerful application, based on AI and NLP technology developed at Seattle’s Allen Institute for Artificial Intelligence (AI2), built from the ground-up to ingest and understand your corporate contracts. Whether it be a pricing term, a partnership revenue share agreement, a renewal date, or an extension clause, the details are tedious to find and track and yet necessary to understand and be able to act on in order to run a business well. Lexion is your powerful magnet for locating that “needle hidden in the haystack” of your paperwork, and it helps make you smarter, faster, and more action-oriented when running your business.

Lexion Founders, Emad Elwany, Gaurav Oberoi, and James Baird.

Gaurav Oberoi, Lexion founder and CEO, is a Seattle-based entrepreneur whom we have known and have wanted to work with for a long time. He is a tremendous founder and well-known in the tech community both for his successes in and his enthusiasm for the Seattle startup scene. He founded and bootstrapped successful startups Billmonk (acquired by Obopay) and Precision Polling (acquired by SurveyMonkey) and originated the still popular startup email list, STS (SeattleTechStartups), over a decade ago. Gaurav, together with co-founders Emad Elwany and James Baird, came together at AI2 and formed the idea for Lexion over discussions on the common customer problem of intelligent document management and then built Lexion as a solution to solve it.

At Madrona, we love this customer- and problem-first approach to company creation and are excited to support the Lexion team from Day One. This investment also supports one of our core investment themes of ML-driven intelligent applications, in this case using advanced text mining and NLP techniques to extract structured data and insights from large corpuses of unstructured information to solve a vertical business problem, here specifically contract management. We think there will continue to be more opportunities in this form of entity extraction from large text sets, and this investment builds on the theme behind our other startup in this space, Lattice Data (acquired).

In talking to dozens of portfolio and other midmarket and growth companies, we heard this pain point and market opportunity reiterated over and over again. We were enthused as this company and technology came together to solve the problem, and are very excited to also have forward-thinking law firm, Wilson Sonsini, Goodrich and Rosati, the premier legal advisor to technology, life sciences, and growth enterprises worldwide, invest a sizable amount and join the board. WSGR clearly sees their clients dealing with this same issue of contract management and understands deeply the differentiated approach Lexion is bringing to market. We are looking forward to working with David Wang at WSGR and the team there to help build Lexion’s success.

Lexion is also the latest company to spin out from AI2 and the third we have funded (previous early stage investments were Kitt.ai and Xnor.ai). AI2 has proven to be an incredible incubation ground for companies – and it’s great to see Seattle and our region nurturing AI for the broader good.

To learn more about intelligently and cost-effectively managing your contracts – visit https://lexion.ai/

Applying Machine Learning to Finding Great Talent – SeekOut

I’m excited to welcome SeekOut to our portfolio. SeekOut is a game-changing solution for recruiters and hiring managers to identify and connect with high performers who have a demonstrated track record of solving problems that are relevant to their needs.

In our capacity as the Talent Team at Madrona, Matt Witt and I help our portfolio companies – and the ecosystem at large in greater Seattle – uncover, attract, select and retain a diverse workforce of high performing individuals. We need great tools to do this work. Once every couple of decades a game-changing recruiting tool like SeekOut comes along to provide an order of magnitude advantage over previous solutions. Matt and I took SeekOut out for a spin last year to give feedback to Soma on the capabilities of the product. It didn’t take long for SeekOut to become an extension of our brains and our sourcing platform of choice. We now use it daily and recommend SeekOut to our portfolio companies as one of the most important tools they need for candidate discovery and engagement.

S. Somasegar (Soma) led our investment in SeekOut and he along with the founders, Anoop Gupta and Aravind Bala, know firsthand the pain of recruiting engineers from their days at Microsoft leading teams of engineers on projects with huge scopes. But since Anoop and Arvind were not recruiters by profession they spent a lot of time with their customers and that has paid off with a rich feature set that works for recruiters across a broad set of industries. They have applied the tools they used as engineering leaders on massive computational projects to the problem of matching data on people with the needs of companies that are trying to grow both quickly and intelligently.

“We see a lot of recruiting related solutions focused on the talent market. What made SeekOut stand out was the team’s pursuit of the solution, customer focus and perseverance which has paid off with the incredible customer adoption we have seen this year since the launch of the product,” commented Soma.

SeekOut recognized there is significant room to go beyond the open web or LinkedIn in terms of both data sources and ML/AI and with that, provide better insights on candidates in competitive markets. SeekOut leverages self-reported data from platforms like LinkedIn (what individuals say they’ve done) and performance data like GitHub and Patents/Publications databases (what they’ve actually done) and who they actually are (pedigree, work history, geography and specific demographics including diversity and contact information). The result is a massive, dynamic database that is constantly being updated to more effectively reach out to highly relevant candidates. We recently published our investment themes and SeekOut is a perfect example of our intelligent app category – they are taking a huge amount of raw data, organizing it and applying intelligence to it to deliver better outcomes for users.

Anoop and Aravind also found that SeekOut made it possible for non-technical recruiters to gauge the relative merits of engineering candidates based on the quality of their work products. Gauging engineering talent is something most non-engineers find impossible to do and is a constant source of frustration between engineering leaders and tech recruiters. SeekOut’s advanced features help recruiters dissect keywords to their root and suggests derivatives and alternatives while simultaneously learning about use cases and teaching recruiters what the terms actually mean. This gives recruiters the ability to go fast and compete more successfully.

As recruiters on the front lines, we can tell you that no other tool does this combination of things as well as SeekOut. Another recruiter told me “I was able to access hundreds of candidates through SeekOut that I hadn’t ever seen before on LinkedIn. It has been powerful specifically searching for female engineering managers. I’ve recently started looking at Data Science as well, and it feels like I’ve found a gold mine!”

Our Investment in Knock

We are excited to announce today our investment in Knock, a company that is building a modern marketing cloud for the multifamily property market. The company was founded by Tom Petry and Demetri Themelis, Seattle natives and University of Washington graduates who moved to New York to work in finance just as the ’08-’09 financial crisis began. They survived and thrived in those turbulent times, and returned to Seattle five years later to start a company together.

Like many founders who start a company to scratch their own itch, Tom and Demetri, who had rented apartments throughout their working lives, saw an opportunity to vastly improve the apartment rental experience. They mapped the customer journey and identified the major pain points; from finding buildings that fit a renter’s needs, to touring available units at these properties, to the leasing process. Their very first product was an Open Table-like booking engine for apartment tours that made it faster and easier for renters to find the perfect apartment.

Also like many founders, Tom and Demetri have taken a non-linear journey to this point. While they began by focusing on the renter experience, they discovered a similar, if not greater, customer pain as they got to know property managers at the buildings they worked with. Property managers lacked the tools to they needed to effectively attract, close and retain tenants; everything from allocating marketing dollars across channels to attract tenant leads, nurturing prospective tenants from tour to lease, and communicating effectively with existing tenants to improve satisfaction and increase the likelihood that they renew.

By focusing on these pain points, Knock grew from a booking widget for prospective tenants to a comprehensive CRM that property management companies can use to manage communication and customer relationships throughout their journey. By listening to customers and deeply understanding the pain points and friction (a behavior we see in all great founding teams), the Knock team has built the best CRM system for multi-family property managers and are just getting started in their ambition to build a comprehensive, modern marketing cloud for the industry.

And this is a very compelling industry in which intelligent applications like Knock are badly needed. There are 18 million multi-family (apartment) units in the U.S., with a vacancy rate of about 5% annually. With average monthly rents pushing $1,400 per month, that 5% vacancy translates to nearly $15 billion in rental income per year that multi-family property managers and owners are leaving on the table. Property managers who want to close that vacancy gap need modern CRM tools to find, sign, and retain the best tenants, and that’s where Knock comes in. There are large, legacy software vendors to this industry who offer CRM as part of a suite, but in most cases, it’s an after-thought bolted onto software born out of a different era.

Knock’s software was designed to be intelligent from the beginning, and while it is still very early in the team’s journey, the quality of their product and their ability to serve customers is reflected in the customer roster Knock has assembled and the thousands of buildings and hundreds of thousands of units they’ve on-boarded to the Knock platform. In particular, the enthusiasm we heard from Knock’s customers for both the product and team really got our attention and got us excited about the opportunity to work together. Knock fits squarely into our intelligent applications investment theme, and we look forward to helping Tom, Demetri and the whole knock team to achieve their vision of building the marketing cloud for multi-family.

Madrona Welcomes Katie Drucker and Mark Britton to the Team

Today, Madrona announced the hiring of technology entrepreneur, investor, and advisor, Katie Drucker, to head the industry and business development relationships and partnerships for Madrona and its portfolio of companies. Relationships, whether they be customer or partner, are crucial for companies at all stages. Recognizing this Madrona has built programs such as an annual CIO summit, CIO briefing days and regular tech meetups that bring enterprises and startups together. Katie will operationalize Madrona’s ability to create strategic relationships that move the needle for portfolio companies as they drive revenue, customer growth, and build market fit.

As the Head of Business Development and Partnerships, Katie brings a global and Seattle-based approach and network to building meaningful relationships with both corporate and governmental organizations looking to be on the cutting edge of technology innovation. Her role will include deepening and expanding of Madrona’s network of senior execs, advising companies on partnership strategies, and building deep customer relationships – all designed to enhance customer and partner engagement programs for Madrona’s portfolio.

Katie brings a career of building partnerships and creating networks at the highest levels as a founder, CEO and COO of technology-based startups in SaaS and cyber security and six years as an investor at Trilogy Equity where she sourced deals, served on boards, and developed strategic relationships. Within this role Katie led deals focused on the mobile industry, helped source and recruit talent, and led investments and follow on rounds for early stage companies. Most recently she was the Managing Partner at Cascade Target Group, a business development and consulting company focused on elevating technology startups to government agencies. Prior to Cascade, Katie was co-founder and CEO at Sigby/Protemo and COO of PolyVerse, where she led fundraising, shipped products, and drove business development and ecosystem creation. She is excited to focus in developing the tech ecosystem that surrounds Madrona and its portfolio companies, driving new opportunities and value for all stakeholders.

Mark Britton joined Madrona in early 2019 as a Strategic Director. As a long-time fixture in the Seattle technology scene for his perseverance and leadership of Avvo, Mark brings a point of view to Madrona built over a career of company building one of the landmark Seattle companies. Starting life as an SEC lawyer, Mark quickly discovered the entrepreneurial bug and founded Avvo in 2006, a marketplace to provide regular people with information and access to legal counsel. The company raised $132 million and was acquired by Internet Brands in January of 2018. Mark left Avvo in April to explore his next steps and we are excited that part of that step is working with Madrona and our portfolio companies.

Strategic Directors are established operators who work with the Madrona team as we evaluate investment thesis and specific companies, while also sharing their incredible wealth of knowledge with Madrona’s portfolio companies. Other recently appointed Strategic Directors at Madrona are Steve Singh, Betsy Sutter, Sujal Patel and John McAdam.

“As Madrona builds our team to support Seattle entrepreneurs we couldn’t be more excited to have Katie and Mark on board. We are excited to have Katie bring her drive and network to play an integral role with all of our companies as they work with us leading up to and after funding. We spend intense time with our companies, focused on adding value to them and their team from day one to the long run through their entire journey and go-to-market know-how and partnerships are incredibly valuable to companies of all sizes,” commented S. Somasegar. “Mark is an insightful leader and we are excited to have him on board to share his knowledge and experience of company building through economic ups and downs with us and with our portfolio companies. Having these two leaders on board illustrates our strong passion and capability to continue to deliver for our founders and companies. Welcome to both of them to the Madrona family.”

New Positions and Faces at Madrona

From left to right: Troy Cichos, Jennifer Chambers, Tasha Tieu, Ted Kummert. January 2019.

Recognizing the achievements of employees and the expanding footprint of the firm, Madrona today announced a set of changes to the core team that administers and operates the day to day business of the firm. Additionally, the firm expanded Venture Partner Ted Kummert’s role to include Chief Product Officer in Residence.

Also announced today that Hope Cochran became Managing Director.

In the administrative team, Troy Cichos was promoted to COO and Partner, and Jennifer Chambers was promoted to Administrative Partner. The firm also welcomes a new Controller, Tasha Tieu.

Running a venture firm with nearly $1.6 billion under management is no small feat. With five active funds, a staff of 35 including a value-add team and a full administrative assistant cohort, Madrona’s administrative team has taken on bigger and bigger roles over the past several years.

Troy Cichos joined Madrona in 1999 and was most recently Administrative Partner and CFO. Over the past twenty years, Troy has provided the firm with exemplary guidance as the firm has consistently raised funds, invested in companies, expanded in staff, facilities and founded new entities such as Madrona Venture Labs and Create33. As COO, Troy manages all legal, HR, IR, Tax/Audit for the firm and for Madrona’s venture funds. He manages the team of value-add staff and back office administrators and advises Madrona’s companies on financial management, tax, and legal issues. His role encompasses all operations of the firm.

“Troy brings a unique mix of subject-matter expertise, operational excellence, great people skills, and a love for Madrona and all our constituents. His leadership and counsel is indispensable to our firm and portfolio companies in areas from structuring deal documents, advising on tax strategy, consulting on leases and real estate questions, working with our investors, and providing leadership for all our firm’s operations. Troy always brings his A game and is a constant positive presence in the office and with all the important partners we work with to help our companies and support the Seattle ecosystem,” Tim Porter, Managing Director.

Jennifer Chambers joined Madrona in 1997 and as Administrative Partner works on both fund and Madrona office management. During her time at Madrona, she built and scaled the back office to accommodate the growth of Madrona’s funds, portfolio, team and facilities. As part of the value-add team she assists Madrona portfolio companies with the decisions and vendors they need to successfully set up their own back office – everything from choosing a benefits provider to finding office space. She works with Madrona’s investors as part of the fund management, both distributing and calling capital as needed in the life of a fund and planning and managing the content of our quarterly and annual meetings. Additionally, she manages a team of administrative assistants and Madrona facilities. Jennifer’s prior title was Fund Administrator.

“Jennifer has been a crucial piece to the success of Madrona. There are very few if any aspects of Madrona that Jennifer does not regularly influence and she sets the tone for Madrona’s culture with her contagious positive attitude,” Paul Goodrich, Managing Director.

Tasha Tieu joined Madrona in late 2018 as a controller focused on accounting, tax and audit functions for both Madrona and Madrona’s venture funds. She comes to Madrona from four years working in audit with technology and retail clients at EY. Tasha holds a Bachelor of Arts in Business Administration and Master’s in Professional Accounting from the University of Washington Michael G. Foster Business School. Tasha is also a Certified Public Accountant in the state of Washington.

Venture Partner Ted Kummert is excited to expand his role to Chief Product Officer in Residence. In this role, he works deeply with Madrona’s growing startups who are facing product, business or engineering challenges that require some hands on, in the trenches work.

Building on his over two decades at Microsoft leading the development of several of that company’s core enterprise products, Ted also spent four years at then Madrona portfolio company, Apptio, leading the transformation and creation of SaaS solutions for enterprise and federal CIOs and CFOs based on the company’s core platform. Apptio went public during his tenure and was recently acquired by Vista Equity Partners for ~$2billion.

Ted applies this and his years of management experience to work closely and, for extended periods of time, with engineering and management teams of Madrona portfolio companies in the early and growth stages to help navigate some of the difficult decisions they face as their business, product offerings and organizations grow and scale. Continuing to serve as a Venture Partner as well, Ted will also work on identifying, vetting and making new investments.

Kristina Bergman, Founder and CEO of Integris Software commented, “Ted has been an invaluable partner for our management and engineering team as we help companies comply with new data privacy laws, such as GDPR and CCPA – map data, apply policies, and automate remediation. Building for enterprises, especially in a heavily regulated area is a complex task and Ted’s years of experience helped us execute and build a highly scalable distributed solution for Data Privacy Automation that is being adopted by global brands to protect their most important assets.”

My Next Role – Managing Director at Madrona

Hope Cochran and Amy Nelson, Founder and CEO of The Riveter. March 2018.

I am so honored and excited to be expanding my role with the Madrona team. I have long admired Madrona, not only for their sustained excellence in investing in local NW companies, but for their well-earned reputation for doing so with intellectual rigor, hard-work and integrity. And when I joined the firm as a Venture Partner two years ago, I found that the Madrona reputation is built through careful attention to the needs of entrepreneurs. That is why I am proud to be deepening my relationship with Madrona as a Managing Director. It marks the beginning of a new professional adventure, one in which I plan to lean heavily upon my own experiences as an entrepreneur and CFO as I work directly with our companies.

People, first and foremost, will continue to be my overriding focus. Having been a founder and executive in both small and large companies, I understand what it’s like to create business plans, navigate tricky financings and launch new products and services; but as I reflect upon my own successes and failures in business, what is most impactful is the quality of the people within each venture. I understand the importance of surrounding yourself with talented and driven personalities who are comfortable in periods of tumultuous change, who keep calm and focused in times of crisis or extreme growth. The stresses and strains of being an entrepreneur can be very challenging day-to-day, but the rewards are worth the challenges. The most important of which has been the life-long relationships I have with the people from my previous companies, relationships that have been forged from periods of intense joy, frustration, success and failure. I’m looking forward to investing in NW entrepreneurs who are eager and ready for a similar ride. So as I develop my investment thesis while at Madrona, it will always start, and stop, with identifying great people and teams regardless of industry or technology. In my opinion, successful teams and leaders are the most important factor in any venture.

So what am I looking for in new ventures besides great entrepreneurs? I will obviously rely heavily on my past experiences. I have worked in several technology-based industries during my career as an entrepreneur and executive—ERP, B2B software (PeopleSoft/Oracle), telecom and wireless (Clearwire/Sprint) and most recently, video games (King Digital/Activision). In addition, I am on the Board and Audit committees for a diverse set of public companies – MongoDB, Hasbro and New Relic. All these experiences and roles will inform my analysis as I add to the Madrona portfolio with new investments. As I have led companies through period of rapid change, there have been several areas that always seem to need attention and improvement.

When a company grows quickly, processes often break under the strain. Having been an executive at companies that experience very rapid growth, I understand and appreciate that the systems and processes required to build a sustainable company must be flexible, scalable and easy to roll-out. Therefore, I am interested in cloud-based B2B systems and software that enable companies to be more nimble as they manage their internal and external processes. Legacy solutions that are inflexible and hard-to-upgrade just don’t work anymore. Furthermore, there is a great need for ML/AI and robotic automation processing to improve various internal processes within organizations. Every department within an organization, from tasks as varied as financial forecasting to determining efficient locations for holding inventory, can be improved with thoughtful application of technology.

In the role of CFO, you often realize that your best forecast, or most consistently produced dashboard is only as good as the data that sits below it (customer, inventory, financial, sales, etc.). How many times was I proud of my finance team’s ability to produce metrics, only to realize that the data behind it wasn’t being stored or sorted accurately?! Today, a company needs to be able to make instant decisions, based on trends and patterns they read in real time. The ease and speed of access, the cleanliness, consistency, analysis and protection of underlying corporate data is crucial.

Finally, CFOs ultimately deal with the money, so this is an area where I have my own bumps and bruises from first-hand experience. Banks come to you with promises of ease of use, the ability to quickly move money, invest it wisely, low fees, etc. But all CFOs know, this is an area of great frustration. It often comes with multiple fees, low yields and difficulty in managing across multiple institutions and regions. On a consumer level the problem is only magnified and often misunderstood by the individual user. There are a lot of burgeoning Fintech companies out there tackling many of these problems, but there is much to be done. As you watch the flow of funds from the point of a consumer or a business, it is astonishing how much margin is taken at each juncture – whether it be fees, the days lost in the movement, currency exchanges, credit card processing, etc. I love the innovation that is happening in this space – both at the level of large scale corporate clients to the individual consumer and look forward to finding and supporting companies that are diving into this challenge

It can’t be ignored that I am a woman executive and investor in a largely male world. I have loved my career but at times I have had to fight for it. It is a joy and passion of mine to support women to thrive in all ranks of a corporation. It is not an issue of not enough female talent in the workforce. I hear that counter-argument all the time and I am amazed that some believe this to be true – have they met the women I know?!

Businesses today can and are starting the journey to recognize the untapped talent they have in their diverse workforce. It needs intentionality. In my experience, it is not going to happen by being passive. I applaud companies and other organizations that are taking intentional steps to address equality in all areas of a company. And, I am a staunch believer that businesses today should be active in addressing equality of opportunity throughout their organizations, from boardroom and C suite and at every level and department.

Madrona has been a leader in working for greater equality at our companies. Over the past two years, I have led Madrona’s participation and support of OnBoarding Women, with our partners at Deloitte, Perkins Coie and Spencer Stuart. OnBoarding Women is focused on creating more opportunities for women to serve on corporate boards in the Pacific Northwest. At Madrona, we recognize that the disparity in the public company boardroom often starts when the company is private and the board is primarily investors – often not a very diverse group. By opening up independent seats early in a company’s journey, the company has the opportunity to diversify the perspective at a crucial point in the company lifecycle, ideally with a woman or otherwise diverse candidate. One of my fellow managing directors has had 5 of the last 6 independent director appointments on his portfolio company boards be women.

As I embark on the next phase of my career, I am so honored to be part of the Madrona team. My most important asset as a professional is my reputation. A reputation is shaped by the people with whom you surround yourself. I couldn’t ask to be surrounded by a more fantastic group than the entire Madrona team.

Madrona Appoints Hope Cochran Managing Director

Madrona Managing Directors, from left to right: Tom Alberg, S. Somasegar, Scott Jacobson, Matt McIlwain, Tim Porter, Hope Cochran, Len Jordan (missing from photo: Paul Goodrich). January 2019.

We are excited to announce today that Hope Cochran is our newest Managing Director. We have worked with Hope in her role as a venture partner at Madrona over the last two years and have known her for many more. In the time she has been a Venture Partner at Madrona, Hope has worked with dozens of our companies on business strategies, financial planning and operational effectiveness. Hope has built her extensive experience over twenty-five years as a founder of her own successful company, as a CFO at both Clearwire and King Digital, as an executive taking companies public and then selling them for billions to strategic buyers, and as a senior leader who brought teams together to achieve a goal. Her clarity of approach and expertise in not only how to financially organize a company, but in how to lead one, has been invaluable to our entrepreneurs and founders.

As a Managing Director, Hope shares the responsibility of investing Madrona’s newest $300 million Fund VII in early stage companies that we believe will change the future of Seattle and the global technology industry. When we shared the news of Hope’s new role with our mutual, long-time friend John Stanton, he commented that “I worked closely with Hope for five years at Clearwire. In a very challenging environment, Hope was a consistent and calm leader with clear vision. Hope managed the complexity of Clearwire’s financial position and was vital in every strategic decision. Hope’s experience in managing people and leading a business will make her an extremely valuable Managing Director at Madrona.”

Hope brings both a bold and practical approach to working with companies. She has already been of invaluable help to the whole innovation ecosystem by leading our annual CFO Summit to address everything from broad themes of leadership and to details of audit rules. In fact, before Hope worked at Madrona, she shared her experience of taking King Digital from 0-60 and onto the public markets at one of our CFO conferences. She has helped portfolio companies of all sizes including later stage Madrona’s portfolio companies like Smartsheet and Rover on their growth and IPO planning, and some of our youngest companies like Gawkbox and Integris through the building and scaling of teams and processes. Her ability to scale up or down and understand the operational challenges of the entrepreneur, is what they value. She is a trusted member of our team and a sought-after voice of counsel.

Hope helped source and led Madrona’s seed investment in the Riveter, the female forward work space and community with five locations thatwill be expanding to more locations this year. Since our initial seed investment, the Riveter has already raised a substantial follow-on upround financing bringing its total capital raised to $20 million. She has also led our involvement in the OnBoarding Women program, which focuses on bringing executive women onto public and private company boards through business-oriented education. For several years now, Madrona companies have been more intentional about recruiting female candidates as independent board members and our work with OBW is invaluable to these candidates and these companies.

To Madrona she has brought her deep operational experience and also her depth of experience serving on public company boards, including New Relic, MongoDB and Hasbro. It is clear that she is a leader in our region, and we are thrilled to have her focused on uncovering the next great companies being built in Seattle.

We also want to celebrate that Hope is Madrona’s first woman Managing Director. As investors, we seek to attract the best entrepreneurs and the best company-building team that are eager to roll up their sleeves to help companies when they need us. Having an investment team that is diverse in terms of experience, expertise, company background, gender, age, culture, and points of view enables us to build better companies faster. We are excited to have Hope on board and look forward to years of investing and working with companies from day one for the long run including all the key decision moments along the journey.

For Hope’s take click here.

Welcome Eclypsium – Creating and Leading the Next Major Security Market – Firmware Protection

At Madrona, we look for exceptional founders attacking big markets. Today, we are thrilled to announce our Series A investment in Eclypsium, the industry’s first enterprise firmware and hardware security platform. We couldn’t be more excited to lead another investment in a phenomenal Oregon-based team and join forces with returning investors Andreessen Horowitz and Intel Capital. Our investment in security has been enterprise focused – with Tigera, ExtraHop and the recently acquired Icebrg – and we are always on the lookout for unique approaches to this ongoing issue in modern computing.

Firmware is in every device in the modern enterprise – from end-user devices like mobile phones and laptops, to the servers, switches, and networking infrastructure that power data centers and networks globally. Exploits at the firmware or hardware level can have the worst possible consequences: attackers can “own” the machine and wiping/re-imaging may not get rid of the threat. Historically, the sophistication required to implement this type of attack made them relatively rare. In recent years, however, organized cybercrime and nation-states have provided the necessary funding and talent to make hardware exploits a reality. More recently, firmware attacks have become pervasive and persistent for certain industries; and they have the ability to permeate and compromise entire data centers, remaining undetected on thousands of devices. A wave of new attacks like the recent supply chain compromises or the LoJax UEFI exploit have clearly shown that organizations can no longer afford to rely on “security by obscurity” when it comes to their hardware. While the alleged Super Micro brouhaha is a bit of a different beast (and we were already well into discussions with Eclypsium when the story broke), it still illustrates the high-stakes nature of hardware and firmware-related exploits.

We were fortunate to be introduced to Eclypsium’s co-founder and CEO Yuriy Bulygin in the summer of 2017 by Will Peteroy from Icebrg (Madrona portfolio company acquired by Gigamon) and Drew Smith from the Oregon Venture Fund. We were instantly impressed by Yuriy’s deep firmware security expertise, passion for solving some of the hardest security problems and ability to build a world-class team of experts. We knew that the market for endpoint and data center security is massive with over $15B in spending combined, with hundreds of vendors offing a variety of solutions. All of the existing solutions, however, address risks at the software level from the operating system up to the applications. We hadn’t seen any companies focused on the attack surface from firmware down to hardware, arguably an equally large and significant attack vector. While the need for more effective security solutions is obvious, finding original security ideas addressing large new markets is very rare. Eclypsium represents both.

In getting to know the Eclypsium founders, Yuriy Bulygin and Alex Bazhaniuk, we quickly realized they were not only creating a potentially huge new market, they were conceivably the best team in the world to do it. Before founding Eclypsium, they had spent years at Intel’s Advanced Threat Research and McAfee on the front lines of discovering new threats and analyzing the world’s most sophisticated hardware and firmware attackers. There they created the open source project, CHIPSEC, a framework for analyzing the security of PC platforms including hardware, system firmware (BIOS/UEFI), and platform component, which has garnered participation from many of the leading hardware manufacturers and cloud providers. They bring together a truly unique collection of talent and experience in firmware threat research and real-world mitigation. Eclypsium’s mission is to find, stop and remove such attacks, which threaten the heart of every enterprise and organization today. They protect organizations from the foundation of their computing infrastructure upward, controlling the risk and stopping threats inside firmware of laptops, servers, and networking infrastructure.

We believe the Eclypsium team has the opportunity to create one of the next very large security companies and be the number one player in the evolving firmware security landscape. We look forward to working closely with Yuriy, Alex and team to build another leading technology company here in the Pacific Northwest.

You can learn more about Eclypsium and firmware security here:

Why We Are Doubling Down On Shyft

We are excited to announce today our Series A investment in Shyft.

Since investing in Shyft’s seed round nearly two years ago, we have watched Brett Patrontasch (CEO) and team continue to make impressive progress against their goal of reinventing the way hourly workers manage their shifts and the way national employers both manage and support their workforce.

We originally met Brett through our involvement and support of the TechStars program. Shyft taps into our love of supporting scrappy entrepreneurs using technology to change people’s lives for the better. Through a mobile cloud connected application, Shyft enables a workforce that has little control over their schedule to take control by easily swapping shifts. Shyft started as a ground up platform that appealed to workers at Starbucks and many other retail chains, and, over the past two years, managers have taken note.

Shyft has responded by creating an enterprise software solution that enables retail outlets to manage their workforce while providing the flexibility that employees value.

This all comes at a crucial time in how the expectations of the modern workforce are changing and along with that, the move to create rules that protect this growing workforce. Cities and legislatures around the country are taking a close look via Secure Scheduling (also known as Predictive Scheduling) at how these hourly workers are scheduled – and creating protections that require some stability of schedule. This is a great thing, and as companies are required to support these regulations they need solutions like Shyft.

The proof is in the customers – and Gap has adopted the Shyft platform as their workforce management platform for all of their brands – Old Navy, Banana Republic, Althleta. Companies such as the Gap are adopting Shyft because the app creates real collaboration amongst employees which helps with productivity and general satisfaction.

We are investing alongside Ignition Partners for this round and it is great to work with them again.

The team’s relentless focus on product and end user experience is inspiring and is winning them new customers every day. Brett and his team are extremely passionate about the market and their product and we believe that they’ve created a game changing company poised for continued success.

Terry Myerson Joins Madrona as Venture Partner

We are thrilled to announce that Terry Myerson is joining Madrona as a Venture Partner. Terry has a broad set of technical and business leadership experiences and has been a successful entrepreneur. His insights both at a technical and a business level combined with his penchant for action is something that will be valuable in working with start-ups and entrepreneurs whether they are at an early stage or have reached a level of scale at a later stage.

Terry joins us from a long and illustrious career at Microsoft where he was most recently the Executive Vice President for the Windows and Devices Group. While at Microsoft, Terry was responsible for the software platform and devices within Microsoft’s workplace, gaming and cloud solutions. This included Windows, Surface, Xbox, Windows Server, InTune, Advanced Threat Protection and HoloLens Mixed Reality.

Terry started out as an entrepreneur. He founded Intersé, one of the first web software companies, which Microsoft acquired in 1997.

At Microsoft he took that penchant for action that is crucial for startup founders to lead teams to create some of Microsoft’s most successful products. His team created Windows 10, which has the highest customer satisfaction of Microsoft platforms to-date with over 700 million customers and growing. Terry also led the Exchange team, during which time it became the world’s most popular business communications system and the foundation for Office 365.

I have had the opportunity to partner and work with Terry over the years right from the time he was working on Exchange and all the way up to when he was running the Windows business for Microsoft. Particularly as I was responsible for the developer products, there were many times when I partnered with Terry and his team who were building platforms to ensure we had a great developer story. During all those interactions, the thing that stood out the most for me was his laser focus on delivering value for the customers and ensuring customer success. There were also several instances where we ended up making shared technology bets and I knew that he would deliver.

Terry currently serves as a member of the board of trustees for Seattle Foundation, which is dedicated to making the great Seattle area a stronger and more vibrant community for all.

Venture Partners both look at new investment opportunities as well as help our existing portfolio companies with their management, engineering and business experience. Terry is a very seasoned operator and brings a lot to the table.

Please join us in welcoming Terry to Madrona.

Welcome Elisa La Cava

We are thrilled to introduce the newest member of our investment team, Elisa La Cava, who has joined Madrona as Senior Associate. We are fortunate to meet many, many impressive associate candidates, but Elisa really stood out with her mix of start-up, strategy consulting, and venture capital experiences. Elisa is going to be spending her time sourcing innovative companies, evaluating new investment opportunities, working with entrepreneurs across the portfolio, and broadly getting involved in the Pacific NW start-up ecosystem.

Elisa joins us after having completed her MBA at Northwestern’s Kellogg school in June. While in business school, she had an impactful internship at MATH Venture Partners conducting due diligence, portfolio analysis, and attending partner meetings each week. She also had a deep dive in M&A with an internship in the very active AT&T Corporate Development group. Prior to b-school, Elisa worked at Deloitte Consulting in Seattle where she worked with technology and life sciences companies. She was also involved in developing Deloitte’s first Diversity and Inclusion go-to-market strategy, as well as leading an international pro-bono consulting program for non-profits in Latin America.

Elisa has also been part of an early stage start-up and lived the various issues facing founders from the inside as an early employee at Seattle biofuel manufacturer General Biodiesel.

Elisa grew up in Woodinville and is happy to return to the PNW. We are excited for her to bring her large local network and passion for the region to bear engaging with founders across the region.

Elisa commented: “During business school, I had my first experience working in venture capital and instantly loved it because I could help innovative companies reach their full potential. From the moment I started meeting the team at Madrona, I knew that this was the place I wanted to do this longer-term. Madrona has a world-class team and the resources to help startups not only gain instant traction in today’s market, but also position themselves to adapt and scale as markets change. I am also passionate about the growth of the community here in Seattle, specifically, because it is my hometown. I am beyond excited to be back in Seattle and at Madrona, and am ready to dive in and help support the next wave of world-changing founders and startups.”

I’m sure you will see Elisa at a local startup event sometime soon. Hopefully you will have a chance to meet her and experience her drive and enthusiasm firsthand. I do caution challenging her to a tennis match, however, as she played four years and was captain of Claremont McKenna’s tennis team. While leading the tennis team, she also managed to dual major in Economics and Spanish.

Welcome Elisa!

Our Investment in Kush Parikh and Player Tokens

I am pleased to announce Madrona’s seed investment in Player Tokens Inc. (PTI) and our partnership with Kush Parikh, the founder and CEO. Kush joined Madrona as an Entrepreneur in Residence (EIR) in late 2017 and explored several ideas with the Madrona team, including a nascent category called crypto-collectibles. Player Tokens is launching today.

There have been a number of interesting crypto-collectible projects … this Medium post by CryptoKitties, one of the pioneers of the space, does a nice job covering both the definition of crypto-collectibles and some of the earliest experiments. This post is another good 101.

As Kush and we explored the world of crypto-collectibles together, a few things really stood out. First, there is an opportunity to bring together the digital and physical worlds (something my partner Matt lovingly describes as DiPhy) to create an entirely new and compelling collectible experience, powered by blockchain. Second, this intersection of worlds is particularly powerful in professional sports, where fans have the opportunity to encounter and interact with their favorite athletes, at games, on television, and through social media. Third, the crypto-collectible experience as it exists is entirely too complicated for the typical pro sports fan and collector.

These observations and a compelling vision for ways that crypto-collectibles could be the entry point to a whole slew of digital and physical fan experiences is what prompted Kush to found Player Tokens at Madrona, and for us to begin this journey together. Step one on the journey … talking to fans and collectors. Having lived in epic sports towns like Seattle and Chicago, we’ve had no shortage of conversations with sports fans and collectors who are interested in modern ways to buy, sell, and trade, authentic, rare collectibles for their favorite players. Through Madrona’s partnership with the OneTeam Collective, we’ve also had the opportunity to connect with the players, associations, teams and leagues, all of whom are excited about the future of crypto-collectibles and the opportunities they will enable in the professional sports world.

A mix of product vision from Kush and team, and feedback from fans, collectors and athletes alike, have shaped the initial version of Player Tokens launching today, as well as the long-term roadmap for PTI. We are excited to be working with Evan Kaplan and team at the Major League Baseball Players Association, who represent the Major League players, as our first business partner in this journey; we look forward to building great things together for fans and professional athletes across the globe.

Special thanks to our friends Ahmad Nassar, Ricky Medina, Casey Schwab and team at NFL Players Inc. / OneTeam Collective, who have been great thought partners and connectors for PTI at this early stage in the life of the company and the category.

Why Madrona Invested in Pulumi

Today I am very excited to announce our investment in Pulumi.

Pulumi aims to fundamentally improve the way people build, manage, and interact with cloud-native applications, services, and infrastructure.

There is a massive movement to the cloud among enterprise customers around the world. As that trend continues to gather and gain momentum, new and transformative techniques are required as customers truly begin to take advantage of cloud-native capabilities. This transformation grows leaps and bounds with serverless computing starting to emerge as the next frontier to enable truly distributed applications and services that are powered by microservices and event-driven functions.

Recent cloud infrastructure breakthroughs include serverless, containers and hosted cloud infrastructure. Containers are great for complex stateful systems, often taking existing codebases and moving them to the cloud. Serverless functions are perfect for ultra-low-cost event- and API-oriented systems. Hosted infrastructure lets you focus on your application-specific requirements, instead of reinventing the wheel by manually hosting something that your cloud provider can do better and cheaper. Arguably, each is “serverless” in its own way because infrastructure and servers fade into the background.

“This disruptive sea change is enabling Pulumi to deliver a single platform and tools suite that allow developers to build and ship code to the cloud in the easiest and fastest way.”

 

Eric Rudder, Joe Duffy and Luke Hoban are a world-class team to deliver such transformative experiences in a cloud-native world. They have decades of experience in platforms, tools, and programming models. Eric Rudder was one of the most senior executives at Microsoft, including running the $10B+ Server and Tools business, serving as a Technical Advisor to Bill Gates, and most recently as the EVP for Advanced Technology before leaving Microsoft. Joe Duffy was a senior technical engineering leader at Microsoft and was a critical part of the early team that built .NET and C#. Most recently, he was Director of Engineering and Developer Tools Strategy and, in that role, was instrumental in open sourcing .NET and taking it cross-platform to Linux and Mac. Luke has held a variety of product and engineering roles at Amazon and Microsoft. While at Microsoft, Luke co-founded TypeScript and developed Go support for Visual Studio Code.

I have had the privilege and the fortune to have worked with Eric, Joe and Luke closely over the years, and their passion to solve hard problems for developers and enterprise customers is unparalleled. I am personally very excited for the opportunity to work with this very talented group of people. We are confident that this kind of a world-class team is what is going to help drive a breakthrough as cloud-native becomes fundamental to enterprise software today and in the future.

We are doubly excited to partner with Pulumi given it is a Seattle-based early-stage start-up focused on native-cloud environment with a world-class founding team.

Please join me in welcoming Eric, Joe, Luke and the Pulumi team to the Madrona family!

Announcing our Investment in Crowd Cow

I am excited to announce our Series A investment in Crowd Cow, a curated online marketplace for high quality craft meats sourced from independent farmers. This is our third collaboration with Joe Heitzeberg and Ethan Lowry, the co-founders of Crowd Cow. Both Joe and Ethan worked on Poppy, their 3D camera startup, as entrepreneurs in residence at Madrona, after which Joe co-led Madrona Venture Labs. We have always respected and admired Joe and Ethan as entrepreneurs, tinkerers and company-builders, and finally found an opportunity to invest in one of their companies.

Crowd Cow was inspired by an engineer’s passion for farm-sourced meat, and Joe and Ethan’s realization that: 1.) farm-sourced meat is significantly better and more flavorful than the meat available at your local grocery store, and 2.) buying a 1/4 ‘cowshare’, the principal way people buy meat directly from the farm, is not a mainstream buying activity (in part because a 1/4 share is about 125 pounds of meat). Instead of selling 1/4 shares, Crowd Cow lets customers pick and choose the cuts they want in any quantity, with orders delivered directly to their front door.

It became clear from early on that consumers love the quality and flavor of meat sourced directly from farms, and that they care where their meat comes from and how the animals are raised, cared for, and fed. As the Crowd Cow team searched the nation (and later the globe) for the best farmers producing the best product, they learned that the diversity of ‘breeds and feeds’ from these independent farms produced a wonderful diversity of textures and flavors; and they found that this is as true with chicken, turkey, and pork, as it is with beef. This great diversity is documented in Craft Beef, Joe and Ethan’s #1 bestselling book on Amazon.

The Crowd Cow team is now on a mission to bring the great quality and diversity of farm-sourced meat, from across the country and the globe, directly to consumers. In doing so, Crowd Cow has become an invaluable resource to independent farmers, enabling them to share their craft and build their brand with consumers through the Crowd Cow platform. In a market controlled by a small number of corporate conglomerates, giving independent producers a more direct path to their customers is a very good thing.

We could not be more enthusiastic about Joe and Ethan’s vision for where they plan to take Crowd Cow, and we welcome the Crowd Cow team to the Madrona family. Whether grass-finished or grain-finished is your cup of tea, or you have a hankering for pasture-raised chicken or heritage pork, Crowd Cow has something for everyone; including super premium A5 Wagyu from Kagoshima, Japan, and the ultra-rare Olive Beef. We look forward to partnering with Joe, Ethan and team to bring the best craft meats sourced from independent producers to consumers across the country and the globe.