Seattle startup studio Pioneer Square Labs (PSL) and esteemed Silicon Valley venture capital firm Mayfield are teaming up to fund the next generation of AI-focused startups.
The partnership combines the startup incubation prowess of PSL, a 9-year-old studio that helps get companies off the ground, with Mayfield, a Menlo Park fixture founded in 1969 that has stalwarts such as Lyft, HashiCorp, ServiceMax and others in its portfolio.
As part of the agreement, PSL spinouts focused on AI-related technology will get a minimum of $1.5 million in seed funding from PSL’s venture arm (PSL Ventures) and Mayfield.
“We’ve really been focusing a lot of our efforts on building defensible new AI-based technology companies and found a partner who feels very similarly — and has incredible talent, resources, and thought leadership around this area,” said PSL Managing Director Greg Gottesman.
Navin Chaddha, managing partner at Mayfield, described the partnership as “very complimentary.” PSL specializes in testing new ideas before spinning out startups. Mayfield steps in when companies are ready to raise a venture round and at later stages.
“They have strengths, we have strengths,” Chaddha said.
It’s a bet by both firms on the promise of AI technology and startup creation.
“It’s a once-in-a-lifetime transformational opportunity in the tech industry,” Chaddha said.
Mayfield last year launched a $250 million fund dedicated to AI. Chaddha published a blog post last month about what Mayfield describes as the “AI cognitive plumbing layer,” where the “picks and shovels” infrastructure companies of the AI industry reside.
“There’s so much infrastructure to be built,” Chaddha said. He added that the applications enabled by new AI technologies such as generative AI are “endless.”
Gottesman, who helped launch PSL in 2015 after a long stint with Seattle venture firm Madrona, said more than 60% of code written at PSL is now completed by AI — a stark difference from just a year ago.
“It’s not that we have humans writing less code — we’re just moving faster,” Gottesman said.
The $1.5 million seed investments are a minimum; PSL and Mayfield are open to partnering with other investors and firms. The Richard King Mellon Foundation is also participating in the partnership.
The deal marks the latest connection point between the Seattle and Silicon Valley tech ecosystems.
Madrona, Seattle’s oldest and largest venture capital firm, opened a new Bay Area office in 2022 and hired a local managing director.
Bay Area investors have increasingly invested in Seattle-area startups — including Mayfield, which has backed Outreach, Skilljar, SeekOut, Revefi, and others in the region. The firm was an early investor in Concur, the travel expense giant that went public in 1998.
Chaddha previously lived in the Seattle area after Microsoft acquired his streaming media startup VXtreme in 1997. He spent a few years at the Redmond tech giant, working alongside Satya Nadella — who later went on to become CEO.
“I think it’s fantastic that Mayfield is making a commitment not just to AI, but also to the Seattle area as well,” said Gottesman.
PSL raised $20 million third fund last year to support its studio, which has spun out more than 35 companies including Boundless, Recurrent, SingleFile, and others. Job postings show new company ideas related to automation around hardware development and workflow operations for go-to-market execs. The PSL Ventures fund raised $100 million in 2021.
