Seattle-based Madrona Capital is celebrating its 30th year in business by raising $770 million in new capital. This is the firm’s largest fundraising to date, surpassing the $690 million in two funds Madrona closed in 2022.
While an 11% capital increase may not seem like much, any increase at a time when many venture firms are being forced to reduce the amount of their funding is a sign that limited partners are excited about the firm’s prospects and track record. .
Madrona managing director Matt McIlwain told TechCrunch that it helped that last year — in a market where exits were few — the firm sold several portfolio companies and distributed capital to its investors. The firm’s recent exits include Lexion, which it sold to Docusign for $165 million, and Octo AI, which Nvidia bought for a reported $250 million.
“The LP community is generally concerned about distributions,” McIlwain said. “I think we stood out as a firm that had done very well on that front, not just last year, but over many years.”
Madrona started as a group of “super angels” who wrote a check to an online bookstore, Amazon, in 1995. Since then, the firm has developed into a multi-stage investor that has backed companies like Redfin, Smartsheet, Snowflake and most recently , AI startups Typeface and Runway.
Although Madrona undoubtedly benefited from being the largest VC firm in the same geographic location as Amazon and Microsoft, it decided to expand beyond Seattle by opening an office in Silicon Valley in 2022.
McIlwain said the new capital will be used to invest in AI applications in fields ranging from travel to life sciences, as well as in infrastructure companies that “can remove friction” between underlying models and users. The firm will back about 30 pre-seed, seed and Series A startups from its early-stage fund of about $490 million, and the remaining capital will go toward 12 companies raising their Series B or Series C .
As Madrona enters its fourth decade, it is extremely optimistic about what will happen in 2025. McIlwain described the current conditions as a “risk-on mindset” that will help drive entrepreneurship and create value.
