Madrona Venture Group, entering its fourth decade, has announced the closure of its largest fund to date, totaling $770 million. This move comes at a time when many other venture funds are shrinking. The firm is bullish about the prospects for 2025, reflecting a 'risk-on mindset' as described by managing director Matt McIlwain. This optimism stems from Madrona's strategic capital distribution and successful exits in the past year.
In 2025, Madrona increased its capital pool by 11%, a testament to its robust track record that has energized limited partners. Founded in 1995 as a group of "super angels" with an initial investment in Amazon, the firm has since transitioned into a multi-stage investor. It has backed prominent companies such as Redfin, Smartsheet, Snowflake, and AI startups Typeface and Runway. Their recent expansion included opening an office in Silicon Valley in 2022, marking their commitment to tapping into the tech hub's innovative ecosystem.
The newly raised capital will focus on investing in approximately 30 pre-seed, seed, and Series A startups from an early-stage fund valued at around $490 million. The remaining funds will support 12 companies seeking Series B or Series C funding. Madrona plans to invest in AI applications across various sectors, including travel and life sciences, and infrastructure companies that "can remove friction" between foundational models and users.
Recent successful exits for Madrona include Lexion, which sold to Docusign for $165 million, and Octo AI, acquired by Nvidia for a reported $250 million. These successes highlight Madrona's strategic insight and expertise in navigating the venture capital landscape.
“I think we stood out as a firm that had done really well on that front, not just this past year, but over many years.” – Matt McIlwain
Leave a Reply