Madrona Venture Labs (MVL) announced Wednesday it raised $11 million for its fifth fund, providing fresh fuel for the Seattle startup studio as it continues to double down on developing artificial intelligence startups.
Founded in 2014 by Madrona Venture Group, the 12-person studio fast-tracks the startup journey for entrepreneurs. Since it was launched, the fund has raised $40 million and backed 32 companies. MVL said it plans to invest in 12 additional startups with the new cash.
MVL provides cash funding to incubate ideas and assemble leadership teams. It acts as an accelerator for established teams, helping them in reaching their next financing round. Additionally, MVL makes small pre-seed investments and offers advisory support.
“Since the early days, we have expanded our model significantly by listening to the needs of founders,” MVL Managing Director Mike Fridgen told GeekWire.
The startup studio said about 84% of the companies it backs fit into its core theme: intelligent applications. This describes products that use AI such as natural language processing or computer vision to learn from data and automate tasks. Examples include:
- Uplevel, which measures engineer productivity, raised $20 million last year.
- Xembly, which takes meeting notes, creates schedules, and makes to-do lists, landed $15 million in October.
- Strike Graph, a compliance automation company, nabbed $7 million last month.
MVL, which works with founders regardless of their location, plans to continue developing startups along its core thesis. However, it has evolved from “big data and intelligent applications into the generative AI movement.”
The studio has already launched some generative AI companies. It invested in Storia, which generates storyboards from natural language, and Finpilot, which analyzes financial documents to provide responses.
MVL’s portfolio of spinout companies have collectively raised $261 million, with a combined valuation of $629 million. It also had a number of successful exits, including Chatitive (Mailchimp), Mighty AI (Uber), and MessageYes (Nordstrom).
Fridgen said the firm takes anywhere from 5% to 25% of equity, depending on the investment, advisory and co-building commitment. By comparison, the AI2 Incubator in Seattle takes 9%. Techstars, which runs an accelerator in Seattle, takes 6%.
MVL faces competition from more than 800 startup studios worldwide. There are several in Seattle, including Pienza, Conduit Venture Labs, TF Labs, Pioneer Square Labs ($20 million), and AI2 Incubator ($30 million).
The studio said it plans to put more emphasis on its climate tech vertical. The firm recently announced that it hired Kelci Zile — who worked for more than three years as a sustainability leader at Amazon Web Services — as a venture partner. It recently spun out Muir AI, a startup that provides emissions data through different levels of the supply chain.
Madrona Venture Group led the financing round. It included participation from new investors: GitHub CEO Thomas Dohmke, Heptio co-founder and former CTO Joe Beda, Smartsheet co-founder Brent Frei, and Concur co-founder and former CPO Michael Hilton. Returning investors include Tableau CMO Elissa Fink, Zillow co-founder Spencer Rascoff, and Xealth co-founder and CEO Mike McSherry.
