Tag: Announcement

Announcing $300 Million for Technology Entrepreneurs and Founders

Today the Madrona Team is gratified to announce our latest $300 million fund, Madrona Fund VII, for investing in exceptional technology entrepreneurs and founders in the Pacific Northwest from Day One. Our longstanding endowment, foundation and family office investors see a huge amount of opportunity for growth in our market. We agree – we think the next big technology trends of cloud computing, intelligent applications powered by AI/ML, multi-sense user interfaces and solutions combining the digital and physical world will drive the next decade of innovation are all happening in greater Seattle better than anywhere else in the world.

We look forward to working with great entrepreneurs, co-investors, and partners as we build the next big companies for the future. Here are the details: we raised $300 million from which we will make initial investments over the next 3-4 years and use to continue to support those companies over the long run – often for 10+ years. Four of our companies have IPO’d in the last two years (Smartsheet, Redfin, Apptio and Impinj) and they exemplify how we work. We were there at day one through the ups and downs for every one of those companies. The average time from inception to IPO for those companies was 12 years. We believe whole heartedly in the innovation of people in the Northwest and we are excited every day to get up and work with you to build success.

Thank you!

Below is our press release on the new fund.

Madrona Venture Group Expands Capital for Entrepreneurs in the Pacific Northwest – Announces a New $300 Million Fund for Early-Stage Technology Companies

Fresh from Four IPOs, Madrona’s Fund VII was Over-Subscribed with Investors Interested in Participating in the Growing Innovation Ecosystem in the Pacific Northwest

Seattle, WA – May 22, 2018 – Madrona Venture Group (www.madrona.com) today announced the closing of a $300 million investment fund, Madrona’s seventh. Madrona’s strategy is to partner with the most promising technology entrepreneurs and their teams from day one through the long term. Madrona primarily focuses on great founders based in the Pacific Northwest, which is home to two of the world’s four largest technology companies, Microsoft and Amazon, as well as a thriving technology and startup ecosystem.

In the past two years, four of Madrona’s portfolio companies have gone public. With each of these companies – Smartsheet, Redfin, Apptio and Impinj – Madrona was there at day one and partnered with the team every step of the way. The average time from initial investment to IPO for these companies was 12 years, exemplifying the firm’s long-term commitment to entrepreneurs.

“The entrepreneurs in our region continue to build exceptional companies on the leading edge of major customer, technology and business model changes. We believe cloud computing, intelligent applications powered by AI/ML, multi-sense user interfaces and solutions combining the digital and physical world will drive the next decade of innovation,” said Matt McIlwain, managing director, Madrona Venture Group. “On behalf of the entire Madrona team, we are proud to have the trust of our many limited partners and outstanding founders.”

Madrona Venture Group Managing Directors

Fund VII is Madrona’s seventh fund over the last 23 years and brings funds under management to nearly $1.6 billion. The oversubscribed fund is supported by a diverse set of repeat and long-term investors including the nation’s premier endowments, foundations, family offices, Outsourced Chief Investment Offices (OCIOs) and entrepreneurs.

Madrona’s philosophy of supporting technology entrepreneurs and startups in their earliest days continues with this fund, and the firm will deploy capital to lead and participate in seed and Series A investment rounds. In addition, the entire Madrona team will continue to roll up their sleeves to help with recruiting great talent, making strategic business decisions, amplifying company stories, connecting them with partners and customers and raising follow-on financings.

Mark Mader, long-time CEO of newly public Smartsheet (NYSE: SMAR) commented, “Madrona understood Smartsheet’s vision and the value of our innovation from our earliest days, even when some others did not. In the eleven years since, our partnership has yielded significant growth, supported by Madrona’s valued counsel on market trends, buyer needs, funding, executive talent, and ability to collaborate with other growth investors. As I reflect on the early decisions that made a positive difference for Smartsheet’s business, our decision to partner with Madrona is one that delivered in the short, medium, and long term.”

Madrona has been committed to supporting, spurring and fostering the innovation ecosystem in the Pacific Northwest over its history, ranging from creating Seattle’s first startup studio, Madrona Venture Labs, five years ago; launching and supporting Seattle TechStars; partnering with the University of Washington Allen School of Computer Science; and working with the angel investor community. This year, Madrona will open Floor 33, a Seattle innovation community co-located with Madrona that will house an expanded Madrona Venture Labs and a curated co-working space for founders and their teams featuring programming for residents and the entire community. This 22,000 square foot location will open later this summer.

Current and new portfolio companies will benefit from an expanded group of Managing Directors, investment professionals, Venture Partners and professionals dedicated to helping our companies succeed. Recent additions include: Managing Director, S. Somasegar; Venture Partners, Ted Kummert, Hope Cochran, and Luis Ceze; Strategic Director, Betsy Sutter; investment professionals Maria Karaivanova, Sudip Chakrabarti and Chris Picardo; Talent Director, Shannon Anderson; and Business Development and Investor Relations Director, Alice Ryder.

About Madrona

Madrona is an early stage venture capital firm in the Pacific Northwest. The firm invests in technology entrepreneurs and companies, and works with them to build their businesses. Madrona manages nearly $1.6 billion and was an early investor in companies such as Amazon.com, Apptio, Smartsheet, Rover.com, and Redfin.

Contact: Erika Shaffer [email protected] 206-972-5514

Introducing Madrona’s Newest Strategic Director: Betsy Sutter

We are thrilled to have Betsy Sutter, Chief People Officer of VMware, join Madrona as a Strategic Director.

What is a “Strategic Director” at Madrona? Madrona is fortunate to have a select group of senior operational leaders who mentor talented founders and senior executives of Madrona portfolio companies, advise our rapidly growing companies, and help Madrona navigate key strategic decisions. Our Strategic Directors include Madrona founders, Jerry Grinstein and Bill Ruckelshaus, as well as successful technology company CEOs Steve Singh, Sujal Patel and John McAdam.

Betsy Sutter was VMware’s first HR leader, and she helped the company scale from under 150 employees when she joined to over 21,000 today (not to mention FY18 revenue of just under $8B). As Corporate Senior Vice President and Chief People Officer, she has worked with and advised VMware CEOs Diane Greene, Paul Maritz and Pat Gelsinger – three iconic technology leaders. She brings a unique perspective to Madrona and this role, as she has a keen insight and appreciation for building a strong culture, recruiting and retaining top talent and, critically, how this enables and aligns with business strategy and execution. She additionally plays a role as an industry thought leader and has spoken broadly about inclusion, diversity and building high-performance organizations.

We have already been fortunate to engage with Betsy in a number of different ways. She spoke at our CFO Conference in 2017 and has met with many of our portfolio company CEOs and senior leaders. In every case, our own team as well as our portfolio companies have been impressed with Betsy’s business insight, wisdom, infectious enthusiasm, practical advice, and bias for action. These insights will be incredibly helpful to portfolio companies, whether they are already at scale or at the formation stage.

Betsy has this to say on becoming a Strategic Director at Madrona:

“A key element to successfully building the next generation of best-in-class companies is to, at the start, set the key culture and value tenants that will enable innovation. I am delighted to be part of Madrona’s incredible team, and I look forward to sharing my passion for helping companies develop strategies that empower their people, build communities, and ultimately thrive and scale.”

Betsy, welcome to the Madrona family! We look forward to working and learning together and to helping to build the next generation of technology company success stories in the Pacific NW!

Welcome Sudip to Madrona

Today we are excited to welcome Sudip Chakrabarti to Madrona as a Partner on the Investment Team.

Sudip is the kind of team member we look for – someone who shares our passion for helping entrepreneurs build their companies from day one. When we first met, Sudip was an investor at Lightspeed Venture Partners in the valley, a team we have worked with for later stage fund raises for Madrona portfolio companies. His focus on cloud and infrastructure technologies means we crossed paths many times and we were impressed by not only his technical and business expertise in this market but also his approach to working with startups. He gets in and does the work to build companies and help founders succeed in realizing their vision. This is how Madrona approaches company building from day one – to day whatever – we are here to help companies succeed and build the greater Seattle ecosystem.

As a partner at Madrona, Sudip will be focused on investments in the enterprise, infrastructure markets including how open source software and technology is changing the enterprise software landscape.

Prior to joining Madrona, Sudip was a partner at Lightspeed Venture Partners where he led or co-led investments in Streamlio, Serverless, Rainnet, Exabeam and, a Madrona portfolio company, Heptio. He started his investing career at Osage University Partners and subsequently was an enterprise investor at Andreessen Horowitz where he was involved with companies such as Actifio, Databricks, Digital Ocean, Forward Networks, Mesosphere and Samsara.

Sudip also brings the experience of being a founder to the table with entrepreneurs and founders – he started two companies early in his career and understands first hand the triumphs and struggles of company building from day one.

Sudip is our second convert from the valley (Maria Karaivanova joined us from Cloudflare last year) and our first from a Valley VC. Please join us in welcoming Sudip to the Pacific Northwest!

The Riveter – The Time is Now for this Co-Working and Digital Space

Today we are very excited to welcome The Riveter into the Madrona family. Founded by Amy Nelson just 10 months ago, The Riveter has quickly grown into a premier female forward work and community space.

The Riveter has their first two locations up and running in Seattle, but they are not stopping there. They are expanding to other cities – Los Angeles is next. An important part of their appeal is that they complement the space with programming for their members, and soon will be launching a digital platform to help connect their members even when they are not in the physical spaces.

When we evaluate companies, we look at the entrepreneur, the business model, and the market. The first time that we met Amy, we were incredibly impressed with The Riveter across all of these dimensions. There is an amazing “founder-product fit” between Amy and her company, as well as all of her early learnings on building a great community-driven business.

Amy is everything we look for in an entrepreneur. She is passionate about her business, her customers, and her team. She has a vision and mission rooted in her own experience, and she is building a product that she would want to use. She has built her own path and is now on a mission to help other women do the same thing.

Amy started her career in the corporate world but eventually decided to depart and quickly saw a market need and opportunity that resonated – building workspaces and community for professional women. The Riveter embodies the cultural movement to actively support women pursing their passions, stepping up, and succeeding in whatever they put their minds to, and it is clear that this is resonating, not just here, but around the country and the world.

That brings us to their market and business model. The Riveter creates workspaces that are female forward and different than other coworking spaces. They have more open space, programming focused on the issues women face in business, and some quiet spaces and mothers’ rooms. They don’t have onsite daycare, they don’t have pink furniture, and they don’t have ping pong tables and kegs. These are inclusive, professional environments for meeting and working designed with women in mind.

Women start businesses at a rate five times that of men, and their businesses often look quite different than the companies that occupy other coworking spaces. Their working patterns are often more flexible, as they fit a lot of competing priorities in their day. The Riveter has been able to hone in on this market and design a business model with great economics focused on professional women by offering things like part-time memberships and locations closer to people’s homes. Because of these different dynamics, The Riveter is maximizing their space differently than other co-working locations.

Our investment in The Riveter comes at an interesting time for Madrona as well. Recognizing the need for more innovation space in our region, we leased the floor below us to build out such a space. In that space we will be hosting early technology oriented companies, enterprises looking to see the latest tech being developed and will have a programming schedule that supports the companies and the community. It is very different from The Riveter in the market and goals and shows that there is space for all kinds of co-working spaces in cities around the country.

As we spoke to members of The Riveter in our diligence process, the theme we heard again and again was “I love this place, and I love this community,” and now we are incredibly excited to support The Riveter in their next phase of growth. Please join us in congratulating Amy and her team on their funding and success!

Welcome Unearth to Madrona!

Pictured in photo: From left to right, Nate Miller, S. Somasegar, Brian Saab & Amy Hutchins.

Welcome Unearth to Madrona!

It is always a happy occasion to welcome a family member back into the household.

With Madrona’s investment in Unearth Technologies, we are excited to be working again with Brian Saab (CEO/Co-Founder) who we had previously worked with as the co-founder of buuteeq (a former Madrona portfolio company that was acquired by Booking Holdings, formerly Priceline). Brian co-founded Unearth with two other buuteeq & Booking Holdings employees, Amy Hutchins, Chief Product Officer and Nate Miller, Chief Design Officer. buuteeq spurred a lot of entrepreneurial spirit as we have also backed Pixvana – started by another co-founder of buuteeq, Forest Key.

Brian went back to his family roots as he began thinking of his next company. Brian grew up in a multigenerational construction company – a business he, as a technology executive, noticed hadn’t really changed that much despite cloud technologies, aerial imagery, and the plethora of tablets and laptops. He and his co-founders did some field testing and realized they could change that with their skills.

The construction industry has long been plagued by both low digitization and low productivity from its workforce. A $1.5T annual industry in the US alone and a $10T opportunity globally, the construction industry is projected to keep growing as new infrastructure is required to keep up with the global economy.

Because of the low productivity, the construction industry suffers from large amounts of waste and lost opportunity. For example, 98% of construction projects face cost overruns or delays with the average project delayed by 20 months and 80% more expensive than planned. In the US, this waste equates to approximately $500B lost per year. This is especially evident in large commercial and civic projects that require large teams and extensive communication between the field and office. This is the problem that Unearth is tackling.

Unearth has built a cloud-native collaboration and communication platform, called OnePlace, for construction and architecture teams to track the progress of their projects in real time. By giving all parties (including project owners and project managers) access to the Unearth platform, everyone is informed every step of the way of the progress of the construction. OnePlace is specifically built to seamlessly handle different data types aerial imagery, 360 images, traditional pictures, plans, and surveys.These are all integrated into the software platform which creates one view available to both office and field teams. After a year in beta and in use on major civic construction projects, OnePlace is open today for sign up at www.unearthlabs.com.

The construction industry is at an inflection point of digitization and software adoption and Unearth is well-positioned to provide a compelling solution for its customers.

Please join me in welcoming Brian, Amy, Nate and the Unearth team to the Madrona family.

Madrona Appoints Veteran Talent Executive, Shannon Anderson, Director of Talent

We are very excited to welcome Shannon to the Madrona team today as Director of Talent. The talent and recruiting role is crucial for startups and Shannon will supercharge Madrona’s recruiting efforts to help our companies find the right people to scale their businesses quickly.
Shannon will lead Madrona’s Talent function in three key areas:

  1. Power Madrona’s talent hub. Identify and develop top leadership talent and rising stars that will fuel Madrona portfolio companies, potential new investments, and enhance the Pacific NW startup ecosystem.
  2. Be a strategic HR business partner to portfolio companies, with a strong focus on bringing best-in-class talent acquisition practices to the portfolio.
  3. Be a Talent Advisor inside Madrona, providing a Talent perspective on the firm’s investments and decision-making.

In Shannon, we feel very fortunate to have found a proverbial “unicorn” given her experience in all of these areas. Very few, if any, other people have Shannon’s set of experiences that are so relevant to Madrona. She has been a hands-on recruiter, both in the “go-go” days of Microsoft and in running her own talent firm. She has recruited for leadership, engineering and business roles. She has been a Talent leader inside a VC firm (Ignition), and thus has experience with how a venture firm works and how to engage with portfolio companies. Most recently, at Recruiting Toolbox, Shannon has been training companies “how to fish” and become world-class at talent identification, acquisition and retention. All this is combined with Shannon’s massive network of friends and contacts made during her years contributing to the Seattle technology ecosystem.

We see how the right people can make or break a company – and when you get those people on board it can change growth trajectories – or conversely, can be too much overhead early in the game. Shannon is adept at not only finding people but understanding how companies grow and when certain roles are needed.

As Director of Talent at Madrona, Shannon and Talent Associate, Matt Witt, will partner with Madrona’s portfolio companies to define, develop and refine their talent roadmaps, create compelling employment branding, great candidate experiences and fully develop their recruiting and selection capabilities.

When Shannon approaches training for HR and recruiting teams at startups and mid-size companies, she focuses not only on teaching hiring managers and executives how to find and attract the best talent – but, equally importantly, she teaches methods that enable the interview and selection process to create a great 2-way fit, ensuring happy and productive employees that stay and grow with the company over time. As a recruiter, Shannon did this herself – which helped to create an 80% retention rate for key roles.

“I’ve been immersed in the greater Seattle ecosystem for many years. We are fortunate to have so much talent here – and a lot of new talent coming to the area,” commented Anderson. “My role is to help companies attract and keep the right Talent; that’s what gets me up and excited every day. Madrona has been a crucial component to the startup culture here for a long time, and I’m excited to be on the team and to get involved with our portfolio companies to create even more value and success for the Seattle region.”

Shannon is also a frequent speaker and entertaining blogger on all topics of recruiting, HR, and talent. You can find some of her work on Medium.

Madrona Expands the Team, Adds Talent Director, Venture Partner and Principal

Veteran Tech Talent Executive Shannon Anderson Joins as Director of Talent, Luis Ceze, a leader in computer systems architecture, machine learning, and DNA data storage joins as Venture Partner; Daniel Li is promoted to Principal

We are so excited to announce today some great additions to the Madrona Team. Each of these people is incredibly talented and will add a significant amount to what we can bring to our portfolio companies and to the greater Seattle ecosystem.

Shannon Anderson is joining us as Director of Talent. We expound on her role here.

Luis Ceze is joining the team as Venture Partner. Luis is an award-winning professor of computer science at the University of Washington, where he joined the faculty in 2007. His research focuses on the intersection of computer architecture, programming languages, molecular biology, and machine learning. At UW, he co-directs the Molecular Information Systems Lab where they are pioneering the technology to store data on synthetic DNA. He also co-directs the Sampa Lab, which focuses on the use of hardware/software co-design and approximate computing techniques for machine learning which enables efficient edge and server-side training and inference. He is a recipient of an NSF CAREER Award, a Sloan Research Fellowship, a Microsoft Research Faculty Fellowship, the IEEE TCCA Young Computer Architect Award and UIUC Distinguished Alumni Award. He is a member of the DARPA ISAT and MEC study groups, and consults for Microsoft.

Luis also has a track record of entrepreneurship. He spent the summer of 2017 with Madrona and has been a vital partner as we have evaluated new ideas and companies for several years. In 2008, Luis co-founded Corensic, a Madrona backed, UW-CSE spin-off company. We are excited to have him on board, continuing and building on Madrona’s long-standing relationship with UW CSE, and working formally with us to identify new companies and work closely with our portfolio companies.

Last but definitely not least, we promoted Daniel Li to Principal. Daniel joined us nearly three years ago and has been an incredible part of the Madrona team. He works tirelessly to not only analyze new markets and develop investment themes that help us envision future companies, but he also dives deeply into his passions. He has built apps that we use internally on a weekly basis at Madrona as well as given a Crypto 101 course to hundreds of people over the past year. He has also proven to be an indispensable partner to entrepreneurs, leading the Madrona investment in fast growing live streaming company, Gawkbox, last year. In addition to digital media and blockchain, Dan has done significant work in investment areas from autonomous vehicles, machine learning, and AR/VR. Dan brings an energy, curiosity and intelligence to everything he does and epitomizes what Madrona looks for in our companies and our team.

We are excited to continue to build the Madrona team to even better help entrepreneurs and further capitalize on the massive opportunity to build world-changing technology companies in the Pacific NW.

The Next Big Step in the Snowflake Journey

Early last year, we invested in Snowflake, which is quickly becoming the leader for data warehousing in the cloud. Now, less than a year later they have raised a substantial round of $263M that underscores their phenomenal success in building a solution that speaks to a real business problem shared by many, many large business customers around the world.

Having had the opportunity to learn more about Snowflake and see first-hand their customer momentum and their execution both on the product and go-to-market fronts, I am more bullish than ever before about what is possible in the years to come.

In addition to building the world’s best data warehousing solution for the cloud, Snowflake introduced Data Sharing last year. The ability to seamlessly share data with your customers and partners from within Snowflake opens up a huge opportunity for business customers. This has been an unsolved problem in the past and is something that is very complex and painful to do. Snowflake has solved that with their Data Sharing capabilities.

Snowflake has done an outstanding job of riding two important and massive technology trends – the enterprise move to the cloud and the need for accessibility from anywhere to massive amounts of business data + analytics. They have built a fantastic product on the cloud and for the cloud that is resonating extremely well with a broad set of customers.

For all of the above-mentioned reasons, we are very excited to invest in this latest round of fund raising by Snowflake. We are very much looking forward to furthering our partnership with Bob Muglia and team to help them scale and see the kind of success that we are confident they will achieve.

Tigera Joins the Madrona Family

Ever since the advent of virtualization technology in the early 2000s, software has become increasingly abstracted from its underlying hardware. The ability to “write once, run anywhere” has led to the runaway success of technologies like containers, which package software in a format that can run in isolation on a shared operating system. This allows developers to more easily collaborate on code across environments, get better utilization from their hardware, and build agile, secure software delivery pipelines.

The concept of the “software-defined datacenter” extends this analogy beyond compute into networking, storage, and security as well. With the advent of hybrid and multi-cloud, the underlying infrastructure is only getting more complex. The ability to manage infrastructure that cuts across private and public cloud leads to cost-effective solutions; better ability to simplify, automate, and scale; and the agility to move quickly in today’s IT landscape.

While containers have been the rage for the last 18-24 months, the complexity that grows from this technology quickly escalates to an unmanageable level from an application connectivity and security perspective. In fact, this has often been the talking point of those who are hesitant to adopt them too deeply. This conundrum has been an issue for large enterprises as they look to benefit from these new methods of software architecture and management.

This is the context in which we are very excited to invest in Tigera and the team.

Tigera provides secure application connectivity solutions built for modern cloud native applications. It addresses the application networking connectivity challenges that come with cloud native architectures, especially those that must connect to on-premises, legacy environments. Tigera does this by extending leading open source projects, Calico and Istio into commercial enterprise software that enables policy-based security, enterprise controls and compliance that works across on-premises data centers and all public clouds. Tigera offers large enterprise companies a solution for deploying containers within the Zero Trust security framework that they require and opens up this Fortune 500 market to innovations that increase agility and cost effectiveness.

The leadership team behind Tigera including the CEO, Ratan Tipirneni; co-founders Andy Randall, Alex Pollitt, Christopher Liljenstolpe, VP of Engineering, Doug Collier; and the most recent additions including Andy Wright, VP of Marketing and Amit Gupta, VP of Product Management make a world-class team that knows networking and cloud deeply. They have demonstrated strong leadership in the open source community and the ability to build a commercial offering that solves real pain points for enterprise customers moving to the cloud.

We, at Madrona, are looking forward to this exciting journey with Ratan and team at Tigera.

Welcome to Kush Parikh

This week, Kush Parikh came on board as an EIR (Entrepreneur-In-Residence) at Madrona. We are excited to have him on board.

You might know him as the former CEO of PayByPhone, the app that saves a lot of time for Seattle drivers and those in and many more cities in the US and Europe.

Kush moved to the Seattle area 11 years ago after being an “intrapreneur” at Texas Instruments working as a principal in their venture group and building several wireless semiconductor businesses including WLAN, Bluetooth and GPS before they became mainstays in our daily lives. Kush came to Seattle to join INRIX, a global leader in road traffic information. He grew to be the CBO (Chief Business Officer) at INRIX and stayed there till 2013. In 2014, Kush became the CEO of PayByPhone, the largest mobile payments company focused on the parking market in the world. The company grew quickly to over 13M users across North America and Europe, processing over $325M in payments and was acquired by Volkswagen Financial Services in 2016.

Kush brings domain experience in both enterprise and consumer services to Madrona. He continues to be an active advisor/investor in start-ups, including being on the Board of Directors of SightLife Surgical, the world leader in corneal care services with a mission to eradicate the planet of corneal blindness.

Outside of work, Kush enjoys golfing, travel and combining those hobbies with his family of four including two girls. Kush has a BSEE from Penn State, an MBA from Duke, and recently attended a CEO/CMO invitation only new economy marketing program jointly led by Columbia Business School and Google.

The Epitome of a Day One Entrepreneur

(Jason LeeKeenan and Russell Wilson of TraceMe)

At Madrona we meet many outstanding entrepreneurs and innovators. Sometimes we meet them when they are starting a company, like Sujal Patel from Isilon or Jesse Rothstein from Extrahop. Other times, like Aaron Easterly from Rover or David Shim from Placed, we got to know them as “rising stars” at prior Madrona companies before they became an entrepreneur. But, this year we got to know someone who for so many of us we feel like we already knew. Over the months of working with him and investing in TraceMe, we have discovered how much more there was to learn about this amazing Day One entrepreneur and the company he started.

The entrepreneur is Russell Wilson and the company he founded is TraceMe. You likely know him best as the All-Pro, Super Bowl Champion, starting quarterback for the Seattle Seahawks. And, attributes that have contributed to Russell’s success in pro football are among those that make him the epitome of a Day One entrepreneur. He is customer-centric, passionate about the opportunity, focused, determined and an attractor of complementary talent.

TraceMe Product Showcase. Russell Wislon, Ask Me Anything.

On the talent front, Russell worked with our friends at Pioneer Square Labs to incubate TraceMe and recruited an amazing star in Jason LeeKeenan to be CEO. Jason’s background includes key roles at Hulu in the early years and Zulily. And, while he is warming up to the Seattle Seahawks as a life-long Patriots fan, he deeply understands the TraceMe opportunity and how to build a sustainable company through innovative content. Jason and Russell are building a world class team of software engineers, video producers and content editors at TraceMe to attack this challenge. Madrona is delighted to be partnering with them as the lead investor in TraceMe’s $9 million Series A financing closed in the spring and announced this week.

At the heart of TraceMe is the idea that celebrities and their loyal fans want more direct and engaging ways to interact. We all see clues about this interest in social media experiences that go beyond current channels in platforms including Twitch for gamers and YouTube for live video bloggers. TraceMe is building a platform tuned specifically for celebrities like Russell and their super fans. TraceMe will create meaningful experiences for fans with compelling content, products and experiences.

We hope that fans will download the TraceMe app this week and give it a try. The app is in beta so your feedback will be helpful as the TraceMe team prioritizes new features and content. Similar to how we have gotten to know Russell Wilson better, we hope you will feel closer to him and the things he is passionate about. These include faith, family, football and finding ways as an entrepreneur to help fans more personally connect with celebrities. As opening week of the regular NFL football season kicks off, we look forward to partnering with the great Day One entrepreneurs at TraceMe to help them win big!

Rep the Squad, the Latest Madrona Labs Spinout

Bringing innovation to the $18B sports apparel market

After a year in development at Madrona Labs, our fifth company, Rep the Squad, launched yesterday. The response was enthusiastic (ESPN, USA Today, Geekwire) – as the company aims to power sports passion throughout the country and build community in every city. The latest Madrona Labs spinout follows in the footsteps of companies where Madrona partnered from Day One with the founders (Rover, Redfin).

Rep the Squad is a new subscription service that provides fans unprecedented access to a wide variety of licensed sports jerseys for a monthly membership fee. We believe the company speaks directly to the modern passionate fan who is interested in “access over ownership.” These engaged fans number in the tens of millions and they spend thousands of dollars every year supporting the teams and players they love. Rep the Squad empowers them to rep multiple players, jersey styles, and avoid the pitfalls of player trades or even a child’s growth spurt.

We could not be more proud to partner with co-founders Brian Watkins and Alex Berg. They exemplify the best of what we look for in Madrona Labs spinout founders — passion for the market (sports), deep domain experience (ecommerce), and the proven grit and resilience needed to take an early stage startup to the next level. Brian and Alex worked together at both Ritani and Blue Nile and have brought together an exceptional team of ecommerce veterans.

Together, we have been able to assemble a uniquely Seattle startup team across the board. Local venture capital firms Madrona and Maveron were the first to commit to the $1.5M funding round. Seahawks Pro Bowler Doug Baldwin and Mariners legend Edgar Martinez, who’s number 11 jersey was retired earlier this month at Safeco Field, personally invested. Seahawks All-Pro Richard Sherman, who is a big-time jersey collector and swapper himself, signed on as the Rep the Squad brand ambassador.

One of the advantages of operating a startup studio out of a venture capital firm is benefiting from the broader team and ecosystem. Ryan Metzger, a die-hard Seattle sports fan and Madrona’s director of growth marketing, not only came up with the jersey rental concept, but he also worked with Aaron Wilson and others from our team in the early days to validate the idea and introduced us to CEO Brian Watkins, who he had worked with over a decade ago at Blue Nile. Our process consisted of market sizing, competitive analysis, hundreds of in-person interviews, ad-driven customer acquisition testing, and an in-season Seattle Seahawks minimally viable product (MVP) to test unit economics and operational assumptions. The project benefited from Madrona’s existing relationship with Seahawks players and connections to the NFL Players Association, in which Scott Jacobson serves on their OneTeam Collective board of directors.

One of the advantages of operating a startup studio out of a venture capital firm is benefiting from the broader team and ecosystem.

We are thrilled to be a part of the early days of Rep the Squad and invite you to join us. To get started simply choose your favorite jersey and sign up. NFL season kick-off is just one week away, so what are you waiting for?!

Why We Invested in GawkBox … in Three Charts and One Photo

Pictured in the Photo – L-R Andrew Allison, CRO; Hope Cochran, Venture Partner Madrona, Daniel Li, Senior Associate; Chris Brownridge, CEO; Tony Chong, CTO

Today we are excited to announce our investment in GawkBox. Over the last few years, we have closely followed the macro trends in live streaming, digital marketing, gaming, and eSports, and we are thrilled to be partnering with the GawkBox team to build a company at the center of this ecosystem.

GawkBox is a platform for the live streaming market that lets fans send sponsored “tips” to their favorite streamers by downloading and completing actions in specific games or apps. Fans can make donations to streamers without direct credit card purchases, and advertisers can engage fans of live streamers with targeted and measurable marketing campaigns.

GawkBox’s users, creators, and advertisers all love the platform because it solves the problem of monetization in the live video market, creating a win-win-win for everyone. Obviously, they have a great product, but why else are we excited about this? Here’s why in three charts:

Live Streaming and Online Video is the Future of Media

Over the last 5 years, the average daily viewership of Twitch has increased 10x to an average of nearly 800,000 viewers per day. In the same time period, Disney has lost over half of its key demographic of kids age 2-11. (For an additional point of comparison, the average daily viewership of CNN is ~700-800K and ESPN is ~800-900K viewers). While Twitch and other online video channels continue to grow, traditional broadcast and cable viewership is shrinking.

Why? Online streaming video is accessible anywhere, on-demand, and interactive. The unique combination of social and broadcast media on sites like Twitch or Facebook also makes live streaming incredibly sticky because of the ability to interact in real time with the people creating the content. Live, online video will redefine media, and we’re not the only ones who think so – Mark Zuckerberg is “obsessed” with live streaming too.

We’re excited about this because GawkBox is building a platform that helps more content creators earn money and build careers in live streaming and online video. By solving a key monetization problem, GawkBox is going to accelerate the growth of the industry.

Digital marketing is growing rapidly as advertisers see positive ROI

It’s not a coincidence that two of the largest companies in the world today are digital marketing platforms focused on measurability and performance. Marketers and advertisers spend a lot of money on ads if they can measure a positive return on investment. (If you want to learn more about performance marketing from an advertiser’s perspective, I highly recommend this video with Gabe Heydon, the CEO of MachineZone, on what the future of marketing will look like).

Over the last century, newspaper advertising revenue reached a peak of $49B across all newspapers. Alphabet surpassed that in just 15 years because they were the first company to offer a performance marketing solution at scale. Facebook is growing just as quickly because it offers a straightforward way to market products and acquire users while allowing advertisers to measure their return on marketing spend.

Today, as a marketer, it’s very hard to deploy dollars into the live streaming market because it is not scalable to sign many deals with individual streamers, it is difficult to measure installs from impressions, and the live streaming format does not lend itself to traditional display, banner, or video ads. GawkBox is the first company that allows marketers to access the live streaming market with a performance marketing solution, and their ad ‘unit’ is a fun, endemic way to engage with fans.

Gaming and eSports are massive, early-adopter markets

The media loves to cover eSports, especially tournaments with big prize pools, billionaires spending tens of millions of dollars to purchase teams, and young players who earn millions of dollars playing video games. However, the other topic that gets covered less is the pure entertainment value of gaming. Big gaming companies (and small indie game studios as well) have experienced massive growth over the last 5 years, and we’re willing to bet more kids in the US have played Minecraft than football, baseball, or soccer. In fact, there are 2.6 billion gamers around the world in 2017, compared to 100 million in 1995, according to Mary Meeker.

The growth in gaming can be attributed to many factors, including the ease of marketing and distribution across platforms like Steam, Xbox Live, and app stores, the gaming industry’s ability and willingness to innovate on their products, and a larger trend towards more interactive forms of entertainment.

Many of GawkBox’s earliest partners are gaming publishers, gamers, and other people in the gaming ecosystem, and we think this is a fantastic initial market. We’ve seen before that many innovations in gaming like online networking, graphics computation, secondary markets, messaging, and free to use/play business models quickly make their way to other industries and use cases, so there is a lot of room for GawkBox to expand into other types of customers after this initial early adopter audience.

We are big believers in this team and their ability to build a big business

Chris, Andrew, and Tony, the cofounders of GawkBox, worked together as early employees of Vungle, where they pioneered the concept of rewarded video ads and built a $300+ million revenue business. Since our first meeting, we have been consistently impressed with their ability to lead, execute, and envision the future of this market.

At Madrona, our philosophy is to partner early with the best entrepreneurs in the Pacific Northwest, and we have been lucky enough to work with many of our most successful companies from day one. After working with this team, we are absolutely convinced they are going to be doing big things, and we are very excited to be leading their Series A.

Finally, here is a link to the GawkBox website. I highly recommend checking it out and telling your favorite streamer about it!

  • If you’re a fan, you will love this product because you can support your favorite streamers without having to make actual credit card purchases. Just play games or download apps from the top publishers and earn tips for your streamers.
  • If you’re a streamer, you will love this product because it is a simple way for your fans to support you, and other streamers are doubling their monthly income after partnering with GawkBox.
  • Finally, if you’re an advertiser, you will love this product because you will be able to engage with the live streaming audience in a fun, unique, and native way. And you’ll be able to measure your return on advertising spend on a granular level and encourage users to reengage with your game or app after the initial install.

We are thrilled to be invested in this amazing Seattle-based team who has big plans for how they are going to change the world of live streaming, marketing, and gaming. It’s early days for this industry, and we are excited to be building the future together!

Welcome SmartAssist To The Madrona Family

It is exciting for me to announce our investment in SmartAssist and to welcome the team to our Madrona family. SmartAssist is applying AI to the business of customer support and is already assisting customers of brands you know including MailChimp and Twilio.

Application development and applications the last 10 years were primarily defined by movement to the cloud, SaaS delivery and touch as an interface. Looking ahead, we strongly believe that applications are going to be defined as intelligent applications with a broader set of natural user interfaces including voice/speech and vision. In our opinion, any application of consequence that is getting built now is an intelligent application. What differentiates the intelligent applications is the use of ML/AI and other techniques to apply on the ever-increasing data sets that enable applications to continuously learn and deliver more relevant and appropriate experience for the customers.

Applying ML/AI to intelligently automate use cases and workflows in enterprises is an area where we see a tremendous amount of opportunity and some of our recent investments reflect that investment thesis. As we think about beachhead use cases of ML/AI within enterprises, customer support stands out as one of the most tangible areas that could be fundamentally disrupted through technology.

By using intelligent routing, automated responses, and predictive modeling, SmartAssist helps enterprises significantly increase the efficiency and quality of services while decreasing customer service costs. The company is based on the platform developed by Wise.io which was acquired by GE in 2016. The team of Pradeep Rathinam and Prashant Luthra had a passion for this business and are taking that core business and building it into SmartAssist. Already they have secured some name brand customers. GE has an interest in the company and we expect to work with them as the company grows.

Another big reason for why we are excited about this investment is the entrepreneurial strength of the founding team. Both Pradeep and Prashant have led and been a part of successful start-ups in the past. Their focus and passion to make a difference in this space makes it a delight to partner with them.

We are thrilled to back the compelling vision of this leadership team and be part of a Seattle area start-up that is focused on driving customer success using ML/AI. All of us at Madrona are jazzed at the potential of what is possible here.

Looking forward to helping realize the potential with the SmartAssist team!

Snowflake, a Cloud Native Data Warehouse and Our Newest Investment

Today we are announcing our investment in Snowflake. Snowflake is a cloud native data warehouse. Data warehouses have been used for years to store and analyze, not surprisingly, huge amounts of data. Over the past 5-10 years with the explosion of data and the rise of analytics & insights that this data provides, these stores have grown massively and are getting tougher and tougher to scale and manage in a cost-effective way. We are excited to back a company that embraced and leveraged the potential of cloud infrastructure from the start and is rapidly ramping their capabilities to meet the demands of enterprise cloud computing.

This investment is different from Madrona’s core strategy of investing at an early-stage in Pacific NW based companies. The company is later stage and is primarily based in Silicon Valley. But this company fits other Madrona criteria – the huge and growing secular shift to enterprise cloud computing, an A+ team with ties to Seattle and product and customer leadership in the emerging cloud data warehouse market. But even given this, why Snowflake?

Two of the massive computing trends we actively follow for investments are – the movement of enterprise computing and workloads to the cloud and the development of intelligent applications that make use of data through ML/AI and continuous learning. Both of these require and deal with massive amounts of data. For all the progress that we have made on these trends, we are still in the early phases of this tectonic computing shift – especially for enterprise customers. Many of the previous attempts to make enterprise applications available in the cloud have simply been a reworking of legacy applications, as opposed to cloud native design. We are seeing more technologies that are being designed and built ground-up to be cloud native. That’s exactly what Snowflake did for the world of data warehousing.

Benoit Dageville (co-Founder and CTO) and Thierry Cruanes (co-Founder and architect) came with a rich set of database experiences from Oracle, and they were joined by Bob Muglia as CEO in 2014. Bob is a very accomplished enterprise software and business leader, having spent more than 20 years at Microsoft including running Microsoft’s $16B Server and Tools business. Under Bob’s leadership, Microsoft grew several different multi-billion dollar businesses. Soma has had the opportunity to work for and with Bob over the years at Microsoft and everyone at Madrona sees Bob as a world-class leader. All this experience, expertise and background make Bob the ideal leader for Snowflake. We are really excited about this team and think they are the ones to create a meaningful new business in this industry.

Snowflake is a data warehouse designed and architected for the cloud. It is the first data warehouse built specifically to run in the cloud, and offers a range of performance, concurrency, scale and infrastructure management benefits which legacy, on-premises and cloud data platforms were not designed for. This allows Snowflake to achieve better database performance, respond to higher volumes of concurrent queries without performance degradation, and provide a simpler ongoing SaaS model without infrastructure maintenance – all with an outstanding price/performance characteristic.

Despite only being about 4 years into development, a recent GigaOm analyst report (http://info.snowflake.net/rs/252-RFO-227/images/GigaOm-sector-roadmap-cloud-analytic-databases-2017.pdf) ranked Snowflake as the top cloud analytics database ahead of Google BigQuery, Teradata, Azure Data Warehouse and AWS Redshift. While these other solutions can be a good fit in certain situations, we see Snowflake as a long-term leader in this massive market with its cloud-first technology and cross cloud platform potential.

Source: GigaOm

Snowflake is building a team in Bellevue given the cloud and big data talent that is available in this region. The combination of a world-class proven team, the focus on a cloud-native solution and the potential to be a leader in a massive cloud data warehousing and analytics market are the main reasons we decided to invest and participate in the Snowflake journey. Snowflake is built on Amazon Web Services (AWS) and there is a good partnership and collaboration between Snowflake and AWS. We look forward to being a valuable resource on that partnership given our long history working with AWS. In addition, we are excited to partner with Bob and team and help them build Snowflake’s presence here in the region and around the world.