Madrona Venture Group Nets $500 Million in Oversubscribed Funds

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Seattle-based Madrona Venture Group closed $500 million in new funds that will be used to accelerate startup tech and life science companies primarily in the Pacific Northwest.

Madrona announced this morning it simultaneously closed two heavily-oversubscribed funds. The first fund, Madrona Venture Fund 8, closed with $345 million for investments. The second fund, dubbed Acceleration Fund 2, closed with $160 million. The bulk of the investments are expected to be made across the Pacific Northwest, with a heavy focus on the Seattle area.

Specifically, Madrona said the Venture 8 Fund will be used to support beginning companies that have founder-market fit from seed and Series A stages. The finances from this will help the companies build and scale throughout their early years. With Madrona Fund 8, Madrona said it will continue to support early-stage company formation across the greater Seattle region. Over 90% of investments in the company’s previous Fund 7 went to companies at the seed or Series A financing stage. More than half of the funds went to seed investments.

In an interview with Geek Wire, Madrona said the Venture 8 fund will make investments ranging from $500,000 to $8 million.

Acceleration Fund 2 is focused on investing in teams that have found product-market fit, generally Series B or C stage, with a specific focus on the Seattle area. Madrona intends to make investments from $8 to $12 million from Acceleration Fund 2, the company told Geek Wire.

In the interview with Geek Wire, Madrona Managing Director Matt McIlwain said the funds will follow its core investment theme that includes “the intersection of machine learning and life sciences,” as well as next-generation software companies. Madrona companies cover many different technology sectors including cloud computing, applied AI/ML and SAAS, but all are boldly innovative and focused on customer defined problems.

Seattle is part of the BioSpace Bio Forest Hotbed and is home to a significant number of life sciences companies. Last year, Life Science Washington, the industry association in the state of Washington, issued a report that showed a 13% increase in employment across the state’s life sciences from 2014 to 2017.

“Madrona’s new funds enable us to continue our two complementary strategies - working with entrepreneurs who have founder-market fit from Day One through the full company journey and providing that same hands-on approach to companies that have reached product-market fit and are accelerating their growth,” McIlwain said in a statement.

A component of Madrona’s seed strategy is supporting the work of Madrona Venture Labs. Madrona Venture Labs is designed to help entrepreneurs through the first steps of company building. Madrona also supports accelerators across the region such as AI2 Incubator, Female Founders Alliance, Ready Set Raise, Techstars and Pioneer Square Labs.

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