As Madrona turns 30, longtime Seattle firm keeps investing in its backyard — and beyond

When four friends got together in 1995 to launch Madrona Investment Group, the internet was just getting started.

After three decades and hundreds of investments in budding startups — including the likes of Amazon, Redfin, Smartsheet, and others — the Seattle venture capital firm is still making bets on fledgling tech companies as another disruptive technological shift gets underway.

Madrona celebrated its 30th anniversary on Wednesday in Seattle, gathering limited partners, portfolio company founders, and other leaders within Seattle’s tech community to toast the firm’s milestone.

“It’s just such an honor to have done many, many special things with all of you,” longtime Madrona Managing Director Matt McIlwain said on stage.

Now known as Madrona Venture Group, the largest and oldest venture firm in the Pacific Northwest this year raised $770 million for two new funds that will support around 40 investments.

The firm is rooted in Seattle, where Tom Alberg, Paul Goodrich, Jerry Grinstein, and Bill Ruckelshaus joined forces to create a vehicle to invest in promising entrepreneurs.

In recent years Madrona has dipped its toes in markets beyond its backyard, opening an office in Palo Alto, Calif, and making investments across the country.

But it still allocates a majority of its capital to startups based in the Pacific Northwest.

“Seattle is our home market,” said Tim Porter, managing director at Madrona. “We’re more excited than ever about the number of companies, the opportunity, the ability to build big businesses here. We’re not dialing that down at all.”

McIlwain told GeekWire that having a presence in Silicon Valley “gives us some information flow, some people flow that’s highly complimentary to what we do here.”

Madrona is also able to leverage its deep connections to Seattle-area tech giants Microsoft and Amazon, both for Seattle-area startups but also companies elsewhere.

Madrona held its annual investor day earlier Wednesday, which included a fireside chat with Microsoft CEO Satya Nadella.

It’s a “big, important time for the Seattle market,” McIlwain said, pointing to the tech talent pool and the presence of Microsoft, Amazon, and other leading AI-focused organizations.

McIlwain said on stage that Madrona’s approach in Seattle’s tech ecosystem is “not focusing on how we divide the pie, but how we build the pie.”

A handful of newer venture firms have grown in Seattle over the past several years, including Fuse, which raised $250 million in 2023, and Pioneer Square Labs, which raised $100 million in 2021.

Pre-seed and seed-stage firms including Ascend and AI2 Incubator are also actively investing in early stage startups, along with longstanding investors such as Trilogy, Founders’ Co-op, and Voyager Capital.

Madrona is embracing a “risk-on” mindset in 2025, what it describes as “embracing experimentation, investment, and calculated risk-taking to tackle entrenched challenges and unlock new value.”

The firm is betting big on “applied AI,” investing in domains including enterprise software, travel, life sciences, and health tech.

“It’s going to be an enormous gain of efficiency and change in society over the next couple years,” said Madrona Managing Director Hope Cochran. “It’s going to be incredibly fast.”

Madrona’s recent investments include Spangle, which is using AI to help retailers personalize online shopping, and Gradial, which uses AI agents to help marketing operations teams increase productivity.

“The next 10 years is really going to be about all the different layers of applied AI,” McIlwain said. “Where can you create flywheels and create value capture?”

Porter said it’s an incredibly exciting time to be in the industry.

“AI has been talked about so much, but the opportunity is so real,” he said.