Madrona Venture Group

About

Madrona Venture Group is an early-stage venture capital firm founded in 1995 in Seattle, Washington by Tom Alberg, Paul Goodrich, Gerald Grinstein, and William Ruckelshaus ¹. The firm began as a group of angel investors who pooled personal resources to support early-stage technology startups in the Pacific Northwest ². A notable early investment was co-founder Tom Alberg’s participation in Amazon.com’s initial financing in 1995, leading to a 23-year board seat ³.

Over three decades, Madrona has grown into the largest and oldest venture firm in the Pacific Northwest, managing over $3 billion in total capital ⁴. The firm has made over 660 investments, including 19 unicorns, with 6 IPOs and 95 acquisitions among its portfolio companies ⁵. Notable exits include Amazon, Snowflake, Smartsheet (IPO 2018), Apptio (IPO 2016, acquired by Vista Equity Partners), Redfin (IPO 2017), Impinj (IPO 2016), Isilon Systems (IPO 2006, acquired by EMC for $2.25B), and UiPath ⁶⁷.

In January 2025, celebrating its 30th anniversary, Madrona announced Fund X ($489.6M) and Acceleration Fund IV ($269.4M), a combined $770 million in new capital ⁴. Fund X targets approximately 30 investments at pre-seed, seed, or Series A stages, while the Acceleration Fund targets approximately 12 investments at Series B or C stages ⁴. In 2022, the firm opened a Palo Alto office led by Managing Director Karan Mehandru, expanding beyond its Pacific Northwest base ⁸.

Co-founder Tom Alberg passed away in August 2022. He was remembered by the firm as someone who “embodied the best of his hometown Seattle and brought out the very best in others” ³.

The firm currently has six Managing Directors: Matt McIlwain, S. Somasegar, Scott Jacobson, Tim Porter, Steve Singh, and Karan Mehandru ⁹. It also operates Madrona Venture Labs, a startup studio launched in 2014 for incubating new companies ¹⁰.

Stated Thesis

Madrona publicly describes its mission as backing “founders committed to turning the improbable into the inevitable” and investing “in people and ideas — for the long run” ¹¹. The firm positions itself as “active, full-stack partners who roll up our sleeves to help founders turn ideas that are visionary into businesses that are transformational” ¹¹.

As of the 2025 fund announcement, Madrona’s stated focus is on applied AI and intelligent applications, specifically [^8]:

• Domain-specific AI applications across sectors (travel, life sciences)
• Agentic-first consumer and commercial solutions
• Horizontal functional layers reducing friction between models and workflows
• Multi-modal user interfaces combining digital and physical experiences

The firm emphasizes its Seattle roots, citing proximity to Amazon, Microsoft, and the University of Washington as a talent and relationship advantage, while also investing selectively in the Bay Area and beyond ¹.

Managing Director Matt McIlwain uses a “triangle” evaluation model assessing: (1) the problem and why founders are obsessed with solving it, (2) timing — why now is the right moment, and (3) what makes the founders uniquely capable ¹². He advocates being a “Full-Stack VC” that helps founders from Day One for the long run ¹³.

Inferred Thesis

Based on 55 verified current and recent portfolio companies from Madrona’s companies page ⁵, the firm’s actual investment behavior shows:

Sector distribution (55 companies): - Enterprise Apps: 16 of 55 (29%) - AI & Intelligent Apps: 8 of 55 (15%) - Developer Platforms & Tools: 8 of 55 (15%) - Security: 5 of 55 (9%) - Consumer & Marketplace: 8 of 55 (15%) - AI-Enabled Biotech: 5 of 55 (9%) - Data & Infrastructure: 4 of 55 (7%) - Deep Tech: 1 of 55 (2%)

Stage distribution: The firm’s investment data shows 96 seed-stage investments with an average round size of $4.91M, 110 Series A investments at an average of $10.5M, and 30 Series B investments at an average of $38.2M ¹⁴. This indicates a predominantly early-stage orientation with the Acceleration Fund providing later-stage capacity.

Geographic concentration: Despite opening a Palo Alto office in 2022, the majority of portfolio companies remain headquartered in the Pacific Northwest, particularly the Seattle/Bellevue metro area. The firm’s Snowflake investment in 2017 was explicitly noted as a deviation from their typical Pacific Northwest focus ¹⁵.

Notable patterns: - Heavy weighting toward B2B enterprise software (29% enterprise apps + 15% developer tools + 9% security = 53% B2B) - Significant and growing AI/ML focus across categories — AI-specific companies (15%) plus AI-enabled biotech (9%) represent 24% of portfolio, and many enterprise/developer tool investments also incorporate AI - Willingness to invest in deep-tech/hardware (Echodyne, Impinj) though relatively rare - Consumer marketplace investments (Rover, Redfin, Crowd Cow) represent a meaningful 15% but are less emphasized in recent marketing than enterprise/AI - Long hold periods — Madrona held Smartsheet, Redfin, Apptio, and Impinj an average of 12 years from initial investment to IPO ⁶ - Strong co-investor relationships with Sequoia, ICONIQ Capital, and Tiger Global at later stages

Gap between stated and actual thesis: The firm’s marketing heavily emphasizes “applied AI” and “intelligent applications,” but the portfolio shows a broader enterprise SaaS and developer tools orientation. Only about 24% of portfolio companies are explicitly AI-focused. Consumer/marketplace investments (Rover, Redfin, Crowd Cow, Doorstead) represent a meaningful 15% of the portfolio but receive less emphasis in current messaging.

Portfolio

The following table represents 55 of approximately 269 active and exited portfolio companies (approximately 20% of total known investments) ⁵. Portfolio entries are sourced from Madrona’s companies page and supplemented by press coverage.

In Their Own Words

“We are active, full-stack partners who roll up our sleeves to help founders turn ideas that are visionary into businesses that are transformational.” — Madrona website ¹¹

“We roll up our sleeves and work alongside you, providing the team, strategy, and experience to help founders build lasting and significant companies.” — Madrona About page ¹

“We are really excited about this team and think they are the ones to create a meaningful new business in this industry.” — S. Somasegar and Matt McIlwain on their Snowflake investment, 2017 ¹⁵

“Their passion to solve hard problems for developers and enterprise customers is unparalleled.” — S. Somasegar on Pulumi’s founding team, 2018 ¹⁸

“Whether investing in early-stage companies for a decade-plus or balancing long-term vision with immediate needs, taking the long view while managing short and medium-term requirements works best.” — S. Somasegar on investment philosophy ²³

“At my core, I believe venture capital is an incredible platform to affect the change we want to see in the world and in the way we live, work, and play. As a venture capitalist, I remind myself every day that in a business that has failure built so deeply into the system, and where our main currency is reputation, we differentiate ourselves from our competitors not just by whom we invest in but by how we conduct ourselves and our business.” — Karan Mehandru ²⁴

What Founders Say

“I’m really appreciative and grateful to Madrona for being patient with us. There were a lot of uncomfortable meetings where we weren’t delivering for you, and you stuck with us.” — Mark Mader, CEO, Smartsheet ²⁵

“It has been a privilege to have people as long-term oriented as our investor base. When we agreed to sell, something like 30% of our cap table belonged to people who had been in the company ten years or more.” — Aaron Easterly, CEO, Rover ²⁵

“A lot of the lessons I’ve learned have come from my partnership with Matt and the rest of the Madrona team. From day one, I felt that long-term commitment to me as a founder.” — Sunny Gupta, former CEO, Apptio ²⁵

“Every day, you’re going to feel lonely. But a committed partner is kind of like having your parent’s unconditional love. And I have genuinely felt that with Madrona.” — Sunny Gupta, former CEO, Apptio ²⁵

“As a growing company in 2017, we needed a good partner in one of the hottest tech talent markets in the nation, and when Madrona invested, we saw an immediate rise in visibility that resulted in being able to build out a world-class engineering headquarters in the region. Additionally, Soma and the team at Madrona helped us navigate relationships with the two big cloud providers that call Seattle home, Amazon and Microsoft.” — Benoit Dageville, Co-founder & President of Products, Snowflake ²⁴

“What we found in Scott was a perfectly balanced partner. Empathetic to our business and individual needs — but also just the right amount of push to become the best version of ourselves.” — Demetri Themelis, co-founder and CEO, Knock ¹⁷

“We started working with Madrona in our first week before we even had a prototype. Tim has been an excellent partner in shaping the business.” — Robert Wahbe, CEO, Highspot ²⁶

“He’s an entrepreneur first and a VC second. He knows how to operate and scale companies.” — Sarosh Waghmar, co-founder, Spotnana, on Steve Singh ²⁷

“Madrona delivered value across hiring, partnering, go to market strategy, capital raising, and more through our journey to IPO.” — Mark Mader, CEO, Smartsheet ²⁸

“The team has helped us accelerate key product strategy objectives, recruit important team members, and connect with local technology leaders.” — Daniel Dines, CEO, UiPath ²⁸

“Karan is one of the highest EQ and most empathetic investors in the business. He takes the time to understand who I am as a person with all the nuances, is a first principles thinker… Karan understands how to build world-class teams and has been my closest adviser over the last few years as I assembled my team and scaled the business.” — Manny Medina, Founder and CEO, Outreach ²⁴

Sources