Madrona Raises $690M Across Two Oversubscribed Funds to Invest in Tech Startups

The funds will invest in technology startups at pre-seed through Series C stages.
Image source: Madrona

Quick take:

  • Madrona will be investing in tech startups based in the Pacific Northwest.
  • Its current investment themes include Web3, applied AI & machine learning and others.
  • Madrona recently led the seed round for Spice AI, a Web3 data-driven app-building platform.

Seattle-based venture firm, Madrona, today announced it raised $690 million across two oversubscribed funds for technology startups based in the Pacific Northwest and beyond.

The new funds are $430 million Madrona Fund 9 and $260 million Acceleration Fund 3, which represent a nearly 40% increase from the $500 million Madrona raised in 2020. With over 25 years of experience building companies with founders from pre-seed, the firm will continue to invest in technology startups at pre-seed through Series C stages.

Madrona Fund 9 will focus on its enduring strategy of supporting Pacific Northwest-based pre-seed, seed, and Series A founders to help them build and scale throughout their company journey. Historically, over 80% of Madrona’s core fund portfolio companies are based in the Pacific Northwest.

The firm’s current investment themes include Web3, applied AI/machine learning, modern data stack and DevOps, fintech, and the intersections of life and computer/data sciences. 

Acceleration Fund 3 will focus on investing in teams at the Series B or C stage — and are at a growth inflection point. About half of Madrona’s Acceleration Fund companies are in major tech centres across the country — Silicon Valley, New York City and Salt Lake City, to name a few. These companies are often leveraging AI and ML along with cloud computing to build the best intelligent applications and enabling technologies in the world.

Madrona recently led the seed round for Spice AI, a Web3 data-driven app-building platform and has invested in Stack, a cryptocurrency app built specifically for teenagers and parents. It was an early investor Web2 giant Amazon, and other tech companies such as Smartsheet, Snowflake, Apptio, Redfin, and UI Path.

This news follows the appointment of new Madrona Managing Director Karan Mehandru – an experienced VC with strong ties to Seattle – who will be based in Madrona’s new Palo Alto office.

“With our roots firmly grounded in Seattle and the PNW, we will continue to double down on our differentiated network in Seattle while extending our footprint and network into California and beyond. We are building a deep bench of investors, entrepreneurs, and advisors with expertise in markets we believe are secular areas of innovation like ML/AI, data infrastructure, computational biology, Future of Work, and others,” Mehandru wrote in a blog post. 

Mehandru was most recently at STEADFAST, heading up their venture capital investing, where he did acceleration and growth-stage investing. Before that, he was at Trinity for a decade, focusing primarily on early-stage investing, and he started his career doing acceleration-stage investing with Scale Venture Partners.

Additionally, Madrona will keep expanding its team with new investment professionals, strategic directors, venture partners, and venture growth team members.

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