News & Views

 

Welcome to Alice Ryder and Maria Karaivanova – New Madrona Team Members

Today we are announcing two new team members at Madrona. Alice Ryder is our new head of Investor Relations and Business Development and Maria Karaivanova is joining as a Principal. Each of them brings a wealth of experience to the firm that will translate directly to helping portfolio companies succeed, and contribute to the Seattle Innovation Ecosystem.

We first met Maria more than five years ago, and we were continually impressed with her deep network and knowledge of technology companies and trends. She started her career at Boeing and then moved onto Intel and Intel Capital where she got a taste of venture investing. After five years of helping to build and scale highly successful cloud security company, Cloudflare, in San Francisco, she is returning to Seattle to bring her many talents to Madrona. She is particularly interested in investing in enterprise cloud, security and infrastructure. We are excited to have her on board!

Alice worked side by side with Hope Cochran, our new Venture Partner, on growing very successful businesses in wireless, Clearwire, and in gaming, King Digital. She ran Investor Relations at those companies and previously held similar roles at Expedia and Nextel. Throughout her career, Alice has had a broad role in building strategic business relationships, and we are thrilled to have her talents in both IR and Biz Dev to deploy for our companies. She will continue to build Madrona’s program to connect CEOs, CIOs and CTOs of larger companies with portfolio companies to foster partnerships, customer relationships and strategic advisory.

Please join us in welcoming Maria and Alice! Below is a press release we issued today.


Madrona Venture Group Announces Two New Investment Professionals

Maria Karaivanova Joins as Principal and Alice Ryder as Director of Investor Relations and Business Development

SEATTLE, WA – March 20, 2017 – Madrona Venture Group, an early-stage venture capital firm, announced today two new additions to the team. Maria Karaivanova is joining Madrona as a Principal focused on sourcing and evaluating new investment opportunities, working with portfolio companies to explore and evaluate business strategies and developing investment themes for the firm. Alice Ryder is joining as Director of Investor Relations and Business Development and will work with Madrona’s investors, as well as continue to develop Madrona’s program for connecting C-level executives with portfolio companies for partnerships, customer relationships and advisory roles. Each brings a deep background of business, technology and finance experience to the firm, and has helped rapidly scale very successful businesses like Cloudflare, King Digital and Clearwire.

“Both Maria and Alice embody what we look for at Madrona, experts in their field who have a passion for working effectively with entrepreneurs and innovative ideas,” said Tim Porter, managing director, Madrona. “While they have been on board just a short time, each of them has already made meaningful contributions, and we are looking forward to working together in the coming years.”

Maria has nearly a decade of deep technology experience, garnered through roles at some of the world’s leading technology companies, including Cloudflare, Intel and Boeing. Maria comes to Madrona after five years as head of business development and an executive team member at Cloudflare, a San Francisco-based web performance and security company, where she helped build the company from 25 employees to unicorn status.

While at Cloudflare, Maria built a global ecosystem of over five thousand partners and launched strategic partnerships with Google, Rackspace and other leading cloud platforms, delivering significant revenue and distribution. Prior to Cloudflare, Maria was an investor at Intel Capital with a focus on enterprise technologies and cloud security. She was also part of the Intel-McAfee strategic engagement team helping to integrate security into firmware. Before that, Maria held various positions at Boeing specializing in intellectual property management and international business development for the Chinook, Apache and F-15 programs, and unmanned aircraft. She started her career as an analyst at Citibank.

“Seattle has emerged as the cloud capital of the world and Madrona Venture Group is at the core of its innovation fabric,” commented Maria. “I couldn’t be more excited to work alongside the Madrona team to bring innovative ideas to life across the Pacific Northwest and to support the remarkable entrepreneurs across our portfolio.”

Maria has an MBA from Harvard Business School and a BSBA in Finance with high honors from Saint Louis University. She is a frequent speaker at technology conferences and an occasional angel investor. Maria lives in Seattle with her husband and son.

As Director of Investor Relations, Alice Ryder will work with Madrona’s limited partners who have invested nearly $1.3 billion into funds that are more than 85% invested in the Pacific Northwest. Additionally, she will help foster business development by continuing to build out the C-suite program that connects CIOs, CTOs and CEOs with Madrona portfolio companies. Through this program over the past two years, portfolio companies have engaged new customers and made valuable partnerships with national brand name companies. Alice comes to this role with a strong background in finance and partnerships, built over 10 years in companies representing a diverse set of businesses in the technology industry.

Alice was most recently VP of Investor Relations at King Digital Entertainment, the maker of Candy Crush and other successful mobile games, where she helped ready the company for its IPO and worked closely with King’s global investor base through its public life, which culminated in a $5.9 billion sale to Activision Blizzard. Prior to King she was VP of Investor Relations for Clearwire. She has also held similar roles at Expedia and Nextel Partners. Alice began her work in technology investing as a banker at Donaldson, Lufkin & Jenrette.

“I’m excited to dive into the world of venture investing which is so important to the continuing growth of the technology industry,” said Alice. “The Pacific NW is full of engineering, entrepreneurial and business talent from wireless to software to infrastructure, and Madrona is at the center of it all. I’m looking forward to working with the team to help create new opportunities for growth in the area.”

Alice holds an MBA from Columbia Business School and a BS in Economics from the Wharton School of the University of Pennsylvania.

About Madrona Venture Group
Madrona (www.madrona.com) has been investing in early-stage technology companies in the Pacific Northwest since 1995 and has been privileged to play a role in some of the region’s most successful technology ventures. The firm invests predominately in seed and Series A rounds across the information technology spectrum, including consumer Internet, commercial software and services, digital media and advertising, networking and cloud computing, and mobile. Madrona manages approximately $1 billion and was an early investor in companies such as Amazon.com, Apptio, Rover.com, and Redfin.

Media Contact: Erika Shaffer, Erika(Replace this parenthesis with the @ sign)madrona.com, 206-972-5514

POSTED IN: Madrona News

Madrona’s 2017 Investment Themes

Every year in March, Madrona wraps up what happened in 2016 and we sit down with our investors to talk about our business – the business of finding and growing the next big Seattle companies. First and foremost, our strategy is to back the best entrepreneurs in the Pacific NW attacking the biggest markets.  But we also overlay this with key themes and trends in the broader technology market.  As part of our annual meeting we present our key investment themes for the year.   Below is a snapshot of what we are focusing on:

Business and Enterprise Evolution to Cloud Native

Tim Porter-Madrona-Venture Capital Seattle

Tim Porter

The IT industry is in the early innings of its next massive shift.  The transition to “cloud native” is as big or bigger as the move from PC to mainframes, the adoption of hypervisors, or the creation of public clouds. Cloud native at its core refers to applications or services built in the cloud that are container-packaged, dynamically scheduled, and microservices-oriented. Cloud Native enables all companies to take advantage of the application architectures that were once the province of Google or Facebook.  Companies like Heptio and Shippable are at the forefront of disrupting how IT infrastructure has traditionally been managed with vastly increased agility, computing efficiency, real-time data, and speed.  We firmly believe software that helps applications complete the journey from development on a cloud platform to deployment on different clouds, and running them at scale, will become the backbone of technology infrastructure going forward.  As such, we are interested in meeting more companies that are making it easier to network, secure, monitor, attach storage, and build applications with container-based, microservice architectures.

Intelligent Applications

Customers today demand their software deliver insights that are real-time, nimble, predictive, and prescriptive. To accomplish this, applications must continuously ingest data, increasingly using event-driven architectures, coupled with algorithm-powered data models and machine learning to deliver better service and novel, predictive recommendations. The new generation of intelligent applications will be “trained and predictive” in contrast to the old generation of software programs that were created to be “programmed and predictable.” We believe that intelligent applications which rely on proprietary datasets, event-driven cloud-based architectures, and intuitive multisense interfaces  will unlock new business insights in real-time and disrupt current categories of software.  Investments in intelligent app companies that leverage these trends will likely be our largest area of investment in coming years.

Voice and XR Interfaces for Businesses and Consumers

We believe the shift we are seeing for human computer interactions will be as fundamental as the mouse click was for replacing the command line or touch/text was for the rise of mobile computing.  This shift will be as pertinent for the enterprise as it is for consumers, and in fact will serve to further blur the lines between productivity and social communication.

With voice, we are most excited by companies that can leverage existing platforms such as Alexa to create a tools layer, or build intelligent vertical end-service applications.

In the realm of XR (from VR to AR), we believe this is a long game.  VR will not be an overnight phenomenon, but will play out over the next 5 years as mobile phones become VR capable and, particularly, as truly immersive VR headsets become less expensive and cumbersome. We are committed to this future and are particularly focused on VR/AR technologies that bring the major innovation of “presence” into a shared or social space, as well as “picks-and-shovels” technology that are needed by the XR community now to start the building process now even in advance of a largescale install base of headsets.

Vertical Market Applications that use proprietary data sets and ML/AI

As algorithms continue to become more accessible by way of access to open-source libraries and platforms such as the one our portfolio company, Algorithmia, provides, we believe that proprietary data will be the bottleneck for intelligent apps. Companies and products with ML at their core must figure out how to acquire, augment, and clean proprietary, workable data sets to train the machine learning models.  We are excited about the companies with these data sets, as well as companies, such as Mighty AI,  that help build these data sets or work with companies to help them leverage their proprietary data to deliver business value.

 One area where we see this is happening is when ML/AI and proprietary data is applied to intelligent apps in vertical markets.  Vertical market focus allows companies to amass rich data sets and domain expertise at a far faster pace than companies building software that tries to be omni-intelligent, providing both product and go-to-market advantage.  Most industry verticals are ripe for this innovation, but several stand out including manufacturing, healthcare, insurance/financial services, energy, and food/agriculture. 

AI, IoT and Edge Computing

Linda Lian

IoT can be an ambiguous term, but fundamentally we see the explosion of devices connected to the Internet creating an environment where enterprise decision-making and consumer quotidian life will be crucially dependent on real-time data processing, analytics, and shorter response times even in areas where connectivity may be inconsistent.  Real time response is crucial to success and is difficult to meet in the centralized, cloud-based model of today.  For example, instant communications between autonomous vehicles cannot afford to be dependent on internet access or the latency of connecting to a cloud server and back.   Edge computing technologies hope to solve this by bringing the power of cloud computing to the source of where data is generated.  We are particularly committed to companies building technologies that are focused on solving how to bring AI, deep learning, machine vision, speech recognition, and other compute-heavy services to resource-constrained and portable devices and improve communication between them.

Another facet of IoT where we continue to have investment interest is new vertical devices for consumer (home, vehicle, wearable, retail), healthcare, and industrial infrastructure (electrical grid, water, public safety), along with enabling supporting infrastructure.  Opportunities persist for networking solutions that improve access, range, power, discoverability, cost, and flexibility of edge devices and systems management that provide enhanced security, control, and privacy.

Commerce Experiences that Bridge Digital to Physical

Retail is in a state of flux and technologies are disrupting traditional models in more ways than e-commerce.  First, physical retail isn’t going away, but it has a fresh new look. 85% of shoppers say they prefer shopping in stores due to a variety of factors including seeing the product and the social aspect. This has led the new generation of web-native brands such as Indochino, Warby Parker, Glossier and Bonobos to open stores – but they are very different, carrying little physical inventory and geared towards intimacy with customers and helping find the right product for the buyer.

Second, the decreasing cost of IoT hardware technologies such as Impinj’s RFID, advancements in distributed computing, and intelligent software such as computer vision will fundamentally alter physical retail experiences. Experiments are already underway at Amazon Go where shoppers can pick what they want and casually stroll out without waiting in a check-out line.

Within e-commerce, vertically integrated, direct-to-consumer models remain viable and compelling. They bypass costly distribution channels and can build strong brands and intimate customer experiences like Dollar Shave Club, Blue Apron, or Stitch Fix. Marketplaces that leverage underutilized resources or assets; or the technology that underlies these marketplaces remain relevant and compelling particularly for the millennial generation that prioritize access over ownership. 

Security and Data Privacy

While certain security categories have been massively over-funded, new investment opportunities continue to arise.  Security and data privacy are areas of massive concern for businesses, particularly in the current macro environment.  Internally, enterprises demand full visibility, remediation tools, and monitoring capabilities to guard against increasingly sophisticated attacks. Particularly vulnerable are companies that house massive amounts of customer data such as financial services, big retailers, healthcare, and the government. Externally, the collection and analysis of massive amounts of real-time consumer behavioral and personal data is the bread and butter of sales, marketing, and product efforts. But new privacy laws in the US and imminent from the EU are creating heightened awareness of both the control and security of this data.  We continue to be interested in companies and technologies that take novel approaches to protecting consumer data and helping corporations and organizations protect their assets.  

Technologies Supporting Autonomous Vehicles

Transportation technology is experiencing a massive disruption. Autonomous driving will be the biggest innovation in automobiles since the invention of the car, impacting suppliers, car makers, ridesharing, and everything in between.  Lines are blurring between manufacturer and technology provider.  We believe the value creation in AVs will, not surprisingly, shift to software, and the data that makes it intelligent.  More innovation is required in areas such as computer vision and control systems.  Important advancements also remain to be made in component technologies such as radar, cameras, and other sensors.  Indeed, there are billions of edge cases due to construction, pedestrians, weather, and a murky regulatory environment that must be ironed out both at the technology and policy level before the promise of AV is a reality.

Additionally, the rise of AV could massively disrupt current modes of car ownership. Fleet and operations management software will become increasingly important as AV transportation-as-a-service becomes more and more tangible.  Software and systems for other vehicles including drones, trucks, and ships will also be huge markets and create new investment opportunities.

Seattle and the PNW are emerging as thought leaders in the area of AV, and we believe a technology center of excellence as well, creating new investment opportunities.  We are deeply interested in all the threads that go into this complex and massive shift in technology, the car industry and in social culture.

Well, there you have it – Madrona’s key investment themes for 2017.  Thanks for reading.  If you are working on a startup in any of these areas – we would love to talk to you.  Please shoot any of us a note – our email addresses are on in our bios on our website.

POSTED IN: Madrona News

100 Demos, 50 Company Pitches & a Year With AR/VR Headsets – What We’ve Learned

We received our first market-ready VR headset at Madrona almost one year ago now, and since then, we have done VR (Vive and Rift) and AR (HoloLens) demos for over 100 people who have stopped by our office to check out the next big computing platform. We have done demos for kids, parents, grandparents, pro football players, elected officials, company executives, gaming enthusiasts, people who never game, and people all over the spectrum from skeptical to extremely excited about VR. We have also participated in over 50 unique VR/AR demos from companies pitching Madrona.

First unboxing.

After all of these demos, it’s interesting to take a look back and think about what consumers’ first reactions to the products and content have been and where we think the companies betting on the future of VR need to go from here. Here are some of the key takeaways from our first year in VR:

The Product

  • It’s here. And it’s awesome. Every person to try on the Vive has been blown away by the level of immersion and the experience of getting transported away to another place. While companies are still debating controllers, tracking, resolutions, and wires, there is no doubt that the technology is now ‘good enough’ for people to feel completely immersed in another world. Seeing someone’s fear of falling off a ledge suspended a few hundred feet above a city when they are in fact just standing on the carpet in your office is incredibly fun and proves that VR is a transformative experience.
  • But not quite awesome enough. Despite the incredible experiences that people are having in VR, consumers are not excited enough to go out and buy headsets. Having done over 100 demos, less than a handful of people were excited enough to go out and spend $600-800 for a VR set up and likely another $1,500 for a capable PC to play with VR at home. Maybe we aren’t selling hardware hard enough at Madrona, but our experience seems consistent with the overall industry, with big companies coming in significantly below their initial 2016 forecasts for hardware sales – for example, Sony cut its 2016 forecast for VR headsets from 2.6M units to 0.75M. Further, we know first-hand how cumbersome it is to update software and firmware in order to quickly and consistently enjoy most VR applications.
  • Companies are earlier adopters of VR and AR than consumers. Nearly every corporate innovation lab has taken the time to create some sort of VR experience. IKEA built a kitchen visualization tool, Ford released an app that allows you to experience what it’s like to be a race car driver, and even SleepNumber built a VR application… to simulate what it feels like to be tired (in case you haven’t felt that before!). One of our favorite applications of VR is Redfin’s house tours that allow a potential home buyer to explore a house in VR before making a purchase. We are also seeing early adoption of Hololens AR technology and demos especially in health care, financial services, and various forms of design.  Companies are seeing the huge potential of VR and AR and quickly trying to determine what works and what doesn’t to advance their business objectives.

Redfin.

The Market

  • The first killer app will be social.The VR (and potentially “mixed reality”) apps that people will spend the most time in will be social. Humans have an innate desire to be social, and tools for communication are incredibly valuable – just look at Facebook, Instagram, Snapchat, WhatsApp, Skype, and Slack. Additionally, VR is a platform that is particularly well-suited for communication given the level of immersion you can experience when talking to other people. Early examples of companies with compelling social VR capabilities include Against Gravity’s Rec Room, BigBox’s Smashbox and Pluto VR’s general, mixed reality communications service.

  • Wow – Kids!if there is one thing that has been the most remarkable to watch — it’s how easily children pick up VR controllers and start flying around virtual worlds (before quickly asking if they can play Minecraft in VR). We know some kids who have spent dozens of hours playing social VR games like dodgeball and charades. The level of comfort and intuition that children have for navigating new technologies is incredible, and they will likely be able to imagine new ways to use VR that the current generation of developers haven’t even considered yet. Interestingly, the younger folks who try both AR and VR tend to be more interested in VR while older folks see more commercial promise in AR.

Onsite at Madrona.

  • Learning from Asia and 21stCentury “Arcades” – The US is way behind China for VR adoption, and we are seeing significantly more adoption in the Asian market through malls, theme parks, karaoke bars, and gaming cafes – not to mention the number of manufacturers of simple smartphone headset adapters that allow for a low-end mobile VR experience. We believe in the short to medium term that 21st Century VR Arcades will emerge around the world with the early learnings coming primarily from Asia. HTC is treating the China VR market as its first priority even though it is partnered with Valve on the Vive, and Tencent has begun producing VR movies. US-based VR companies are looking to learn from the Chinese experience, and they are also looking towards Asian investors to fund VR companies, as a large proportion of VR investments have been led by Asian investors. In fact, a recent CB Insights report showed that China-based investors participated in 21% of all AR/VR deals last year, including Magic Leap’s $794M Series C (Alibaba) and NextVR’s $80M Series B (5 Chinese investors).

    Looking Forward

  • Companies and investors are waiting for a big breakthrough.Perhaps it will be Apple’s first foray into AR/VR, maybe it’s mass adoption of the Google Daydream, or maybe it’s a wild success in Snapchat spectacles, but until there is a bigger user base, AR/VR companies will not be making a lot of money. Monetization is tricky, and with the exception of some early wins in indie games, companies do not have a lot of room to experiment with business models to grow their businesses. Even what is arguably the first “hit” of the AR world, Pokemon Go, required a beloved set of content to help create a global phenomenon. That makes it important for early-stage VR and AR companies to ensure they have a plan to survive and continue developing great products until the early majority are more easily able to try VR/AR experiences.

  • VR/AR signal a new era of human-computer interaction.Traditional text interfaces and GUIs force people to interact with data and applications in a way that makes sense to computers. VR and AR are new, natural user interfaces that will allow people to interact with technology in the same way that people interact with the physical world. That means using voice, vision, and gestures to interact with computing and content.  Think about how difficult it is to remember the positions of 100 different files on a shared drive and how comparatively easy it would be to say “show me the document from last week’s meeting with Sally” and have it appear in augmented reality. This will allow us to build new apps that take advantage of the ways that our brains work and interface with both the digital and physical worlds.

    YouTube, Microsoft Hololens. Source: https://www.youtube.com/watch?v=SKpKlh1-en0

    We are incredibly excited to see what happens in the next 3-5 years in the virtual and augmented reality market. Already, we are seeing great examples of profitable businesses creating VR demos of buildings before they are built, so developers can sell real estate before prospects can walk through the space. We are also seeing partnerships with groups like Microsoft, Case Western Reserve University, and the Cleveland Clinic where a medical student can put on a HoloLens with 10 of her classmates to walk around and examine the different pieces of human heart in 3D space to gain completely new insights on how the heart really works.

    As we look towards the technologies that will affect humanity the most over the next decade, we firmly believe augmented and virtual reality will change the way we work, play, and live.

    Madrona is an investor in Redfin.

    A version of this post originally appeared on VentureBeat.

POSTED IN: Madrona News

‘Cloud therapist’ 2nd Watch raises $19 million as demand grows

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Qumulo goes to La La Land, speeds up dreamboat Ryan Gosling

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5 Things I Learned from Studying Facebook Benchmark Data

Through my role at Madrona Venture Group advising startups on growth, I meet a lot of marketers using Facebook to acquire and engage with customers. It’s a powerful platform. Unfortunately, many companies are falling short of their goals and are left frustrated with what they see as unrealized potential.

Recently I began a Facebook benchmarking project with the goal of providing marketers in our portfolio with aggregate performance data on different stages of the funnel. This project used 2015 and 2016 data from companies who were targeting consumers. B2B companies were not included in this study, though many have successfully marketed on Facebook and many of the same trends likely apply.

Through this process, I came up with 5 recommendations that companies should consider as they try to get the most out of this large and increasingly competitive channel.

1. Know where you are on the calendardont ignore seasonality

Prior to my role at Madrona, I led a growth team investing millions on Facebook each month. Even with this budget, we were often surprised at how volatile the channel could be. A common explanation for this unpredictability was an increase in demand for ad impressions — supply stays the same, demand goes up, and your scale falls drastically. Our data show that there are three big bumps throughout the year when prices rise — April, September and December. It’s likely the tax advertisers in April, apparel companies in September (back to school and fall fashion shows), and general retail in December that are driving up prices. From our study, January and February featured the lowest prices of the year, so now could be a good time to scale up. Alternatively, April is the highest month in H1 so you may want to hold back spending there in favor of before and afterwards. Just be careful in November and December as prices during those periods that were 2x January.

2. Use in-month pricing cycles to your advantage

Different pricing within a month is another trend that appeared in the data. Prices were 20% higher in the last 10 days of the month compared with the first 10 and they increased throughout the month. Exceptions did apply in a few months with holidays like July and February, but this trend appeared in the majority of months. If you have a set amount you are spending per month, allocate a greater share of spend earlier in the month when prices are lower and your dollars go further. Doing so could lead to a meaningful increase in the efficiency of your ad spend.

3. Make sure visitors have great experience on mobile

This user visited a landing page not optimized for mobile.

Among our companies, 82% of newsfeed impressions occurred on mobile devices. That percentage will only grow. Mobile newsfeed impressions used to come at a large discount relative to their desktop counterparts and they remain cheaper, but the gap is shrinking. Because much of the discount has disappeared and because of how large mobile is, it is crucial for any prospective advertiser to make sure their mobile experience is solid before being aggressive on Facebook. This means limited text, clear calls to action, and extensive testing on different devices and screen sizes. Promoting app downloads and sending visitors to a mobile browser can both be effective depending on the situation, but in each case make sure your customer onboarding gives people a fast and clear understanding of your key value proposition(s) so you’re not wasting money.

4. Understand costs of reaching your audience

While it was once made up of exclusively college students, these days the Facebook audience is much more diverse. Nearly every customer segment is reachable on Facebook which is one reason why so many companies turn to it to reach prospective customers. The breadth of the Facebook audience does not mean, though, that all audiences are reachable for the same price. In our study, impressions served at females were 33% more expensive compared to males. Differences can also be found among different ages, geographies and other demographic qualities. Companies would be wise to understand their audience and what that means from a cost-to-reach standpoint before getting too far along in their Facebook marketing journey. Suggested Bids in Ads Manager has not been reliable when I’ve used it, so the best way I’ve found to learn prices of different audiences is through live testing. Also keep in mind that the more relevant your creative is for the audience you are trying to reach, the more cost effectively you can reach them.

5. Treat alternative placements differentlyInstagram does not equal Facebook

Over the last few years Facebook has increased its impressions in places beyond the newsfeed. Instagram and the Audience Network are the two that were used most often by our companies and performance data from those placements made for an interesting comparison to native Facebook ads. Instagram was used most often and, while prices were in the ballpark relative to mobile newsfeed, the clickthrough rate was much lower. This takes us back to social media 101. Think through what consumers are doing on each platform and have that in mind when building creative. It’s different by platform. Don’t waste money running ads that have been optimized for Facebook on Instagram. Alternate placements available through Facebook will increase in the future, so keep this in mind when extending your brand to other platforms.

Facebook can be a great place to reach customers, but it can also be unpredictable and frustrating for many. I hope some of the data that came out of this study can shed some light on what’s happening and leave you with ideas on how to exceed your goals.

 

POSTED IN: Madrona News

Top Silicon Valley VC firm Accel leads $15M round for Opal

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Seeq Cultivates Partnerships for Actionable Data

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ExtraHop’s newest product detects security breaches and other network anomalies with machine learning

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Jobaline raises $3.5 million to expand hourly jobs platform and grow its team by 25%

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Investing in Suplari – Madrona’s Latest Investment in Intelligent Applications

Suplari, which announced their $3.1 million funding round today, is our newest investment in an area we helped define – Intelligent Applications. Intelligent Apps combine data and machine learning to provide real-time, actionable insight into business and consumer applications. Going back 4-5 years, we were investing in more horizontal machine learning platforms like Dato/Turi, Algorithmia and MightyAI to help companies combine the talents of their business users, data scientists and programmers to design, text and build intelligent apps. More recently we have been focusing on building vertical or functionally focused intelligent applications including Amperity, Saykara, and Placed.com.

Suplari will be sharing more in the months ahead about their specific focus. For now, we are excited to be working closely again with three founders who are an incredible team. At Madrona we look for companies that fit our key investment themes, focus on real customer problems in large markets and have an outstanding founding team. The three founders of Suplari have all worked with Madrona over the last couple decades and have excellent track records at building innovative and successful companies.

For Jeff Gerber, CTO, this is the fourth Madrona company he has helped build. He was an early engineer at Performant (acquired by Mercury Interactive), then co-founded iConclude (purchased by OpsWare and then HP) with Sunny Gupta, and was most recently working at Apptio (NASDAQ: APTI) on their machine learning and intelligent apps that help CIOs manage the business of IT. Jeff is an incredible technologist who understands the needs of the business customer.

Brian White, CPO, was the first executive hire at iConclude back in 2005 (working with Jeff and Sunny there) as the head of product and then went on to be VP of Products at SkyTap where he drove their shift to focus on larger enterprise offerings across multiple clouds. He also was an early product executive at Amazon Web Services. Jeff and Brian are excited to be reunited at Suplari and have already started building a great engineering and product strategy team.

Nikesh (Niki) Parekh, CEO, was an EIR here at Madrona and has been a long-time friend of the firm. He has worked deeply in the real estate industry including at Market Leader, Trulia and House Values. We have regularly met and worked with Niki on a variety of initiatives in our innovation economy and are excited to be directly working with him at Suplari.

Suplari is staying stealth for now on their specific plans, but expect to share more later in the year! We were delighted to partner on this investment with our friends at Amplify Ventures as well as some highly strategic angels that we worked together with the Suplari founders to attract to the opportunity. The team is officing in Madrona’s innovation space so if you are visiting, please stop by!

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Xnor.ai – Bringing Deep Learning AI to the Devices at the Edge of the Network

Photo  – The Xnor.ai Team

Today we announced our funding of Xnor.ai. We are excited to be working with Ali Farhadi, Mohammad Rastegari and their team on this new company. We are also looking forward to working with Paul Allen’s team at the Allen Institute for AI and in particular our good friend and CEO of AI2, Dr. Oren Etzioni who is joining the board of Xnor.ai. Machine Learning and AI have been a key investment theme for us for the past several years and bringing deep learning capabilities such as image and speech recognition to small devices is a huge challenge.

Mohammad and Ali and their team have developed a platform that enables low resource devices to perform tasks that usually require large farms of GPUs in cloud environments. This, we believe, has the opportunity to change how we think about certain types of deep learning use cases as they get extended from the core to the edge. Image and voice recognition are great examples. These are broad areas of use cases out in the world – usually with a mobile device, but right now they require the device to be connected to the internet so those large farms of GPUs can process all the information your device is capturing/sending and having the core transmit back the answer. If you could do that on your phone (while preserving battery life) it opens up a new world of options.

It is just these kinds of inventions that put the greater Seattle area at the center of the revolution in machine learning and AI that is upon us. Xnor.ai came out of the outstanding work the team was doing at the Allen Institute for Artificial Intelligence (AI2.) and Ali is a professor at the University of Washington. Between Microsoft, Amazon, the University of Washington and research institutes such as AI2, our region is leading the way as new types of intelligent applications takes shape. Madrona is energized to play our role as company builder and support for these amazing inventors and founders.

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‘I want to touch and feel’: Online-only retailers open regular stores

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Madrona Adds Ex-King Digital CFO as Partner; Promotes ‘Soma’ Somasegar to Managing Director

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Investing in People – Developing and Adding to our Team at Madrona

At Madrona we are regularly encouraging our portfolio companies to hire and develop talented people. As organizations grow and change, including our own, it is important to continually be assessing your talent needs and promoting and adding team members. As we embark on a new year of innovation, invention and investment in our region and beyond, Madrona is pleased to announce several promotions and a new addition at the firm today.

All of these appointments speak to the growing opportunity that Madrona sees in our region to build lasting and large technology businesses. We had two successful IPOs last year – Impinj and Apptio – both of which are substantial forces not only here in the Seattle area but in the technology industry at large. In addition, the continued industry leadership of companies like Amazon and Microsoft and incredible talent in our region highlight the huge potential of our innovation ecosystem to create more great companies and products.

Today we are pleased to announce that S. “Soma” Somasegar has been promoted to Managing Director, Julie Sandler to Partner, Daniel Li to Senior Associate and that Hope Cochran is joining us as Venture Partner.

Soma joined us in 2015 as a Venture Partner. Since then he has added greatly to our existing portfolio companies with his deep, developer-centric understanding of both technological and management experience, and has also become a powerful voice internally and externally on key investment areas including DevOps, Machine Learning and Virtual Reality. Soma brings over 25 years of technology operating experience building world-class platforms at Microsoft that fuel cloud, mobile and client/server applications, and he is a passionate and experienced angel investor. Since joining Madrona, he championed investments including Pixvana, Heptio, Shyft and CloudCoreo. He will be a great addition to our Managing Director team.

Julie came to Madrona from Amazon, and has been a valued and invaluable member of the Madrona investment team for more than five years. Today we are excited to promote her to the role of Partner. At Madrona, Julie has led investments including Integris and Poppy, served on boards, helped companies navigate the challenges of finding initial product market fit and then scaling for growth. She has always been a strong and persistent voice supporting entrepreneurs and the community around us. She is a steward for our investors and a mentor to a growing number of people in the Seattle region. She recently completed the year-long Presidential Leadership Scholar program which brings together select national leaders from many disciplines to learn from the great political leaders of our country, and she is deeply committed to ensuring that the innovation ecosystem provides positive impacts for the broadest number of people. We look forward to a new year of company building guided by Julie’s leadership.

Daniel Li joined us in 2015 as an Associate, from the Seattle office of The Boston Consulting Group, and since then has had a tremendous and immediate impact, diving in to leverage communication platforms to help the firm communicate, penning many interesting pieces covering such diverse topics as eSports and autonomous vehicles, and helping our portfolio companies navigate business decisions. Dan is even known to code a few applications himself including a text polling app and a mobile game called Babel. Dan’s energy and attitude is appreciated by our companies and we are happy to recognize his accomplishments with the promotion to Senior Associate.

Finally, we are also announcing that Hope Cochran is joining Madrona as a Venture Partner. Hope most recently was the CFO of London-based, King Digital, which we all know as the creator of Candy Crush and other successful mobile games. At King, she helped lead the company through explosive revenue and employee growth, a successful IPO and a $5.9 billion acquisition by Activision. She has long been a friend and informal sounding board to us at Madrona and recently returned to the Seattle area from London.

Prior to King she was CFO at Clearwire where she worked closely with Craig McCaw, John Stanton and other innovators in our community. Prior to Clearwire, she started a company that grew to 200 employees, $10 million in revenue, and was acquired by enterprise software pioneer, PeopleSoft. Throughout these experiences she has navigated company growth, management and financing situations including raising more than $12 billion, driving two IPOs and a multibillion dollar acquisition. Hope was a popular speaker at our recent CFO conference and we are excited to have her on board to work directly with our portfolio companies. In addition, as a Venture Partner she will be investing time in developing our corporate development and later stage financing programs that connect portfolio companies with strategic partners and potential late-stage investors across a broad set of sectors.

Overall these promotions and additions are a great way to dive into 2017! Madrona is incredibly optimistic about the outlook for the technology industry and having these additions to our core team is crucial to our ability to help our companies grow as well as build the ecosystem in the region.

POSTED IN: Madrona News

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