News & Views


The Finalists in Microsoft Ventures and Madrona Venture Group Innovate.AI Startup Competition

It’s been an exciting time since we announced the Innovate.AI startup competition with our partners at Microsoft Ventures last October. What started as an idea we shared with our friends there, evolved into a global competition generating interest from some of the most innovative companies in the ML/AI field.  We’ve been thrilled with the enthusiasm and strong response we received and would like to thank each participating company for their submission and the judges for the countless hours they spent evaluating each application.

The competition showcased the breadth of problems and use cases that companies are addressing by applying ML/AI.   A couple of interesting observations about trends from the applicant pool emerged:

  • Intelligent Applications are on the rise – as data become plentiful and easily available and accessible, using AI and ML to build a continuous learning system is a fundamental fabric of every application is the way of the future. Many of the companies are targeting a variety of industries with plentiful and readily available datasets.
  • Innovation follows data availability – most companies that are thinking about innovative ways to provide insights and predictive analytics focus a lot on their data strategy and how to best organize and use the data they have as an integral part of the value they can and want to deliver to their customers.
  • Business models are still evolving: most ML/AI companies don’t fit the traditional software model of selling licenses or software-as-a-service. We saw a combination of business models, some leaning towards pure professional services, others a hybrid between licensing and SaaS. It’s clearly an area that will evolve as the companies mature.

Additionally, we saw a concentration in the following verticals:

  • Healthcare & Research: personal and mental health assistants, drug research and diagnosis, and computer vision to spot patterns and abnormalities.
  • Financial Services: research summaries and insights for investment professionals.
  • IoT & Edge Computing: analyzing data from edge devices, predictive maintenance, security and autonomous vehicle applications
  • Sales & Marketing: optimizing leads and focusing sales people on top opportunities.
  • Retail: Using computer vision to automatically recognize and tag items in images and video, enhanced advertising & shopping experiences.

And finally, we’d like to congratulate all of our finalists and welcome them to the final stage of the competition. Here is a closer look at who they are:

  • Alpha Vertex: cognitive systems for the financial services community.
  • ConceptualEyes: accelerates the speed of pharmaceutical research and discovery with artificial intelligence.
  • Envisagencis, Inc.: uses artificial intelligence to unlock cures for hundreds of diseases caused by RNA splicing.
  • FunnelBeam: a customizable sales intelligence platform.
  • ID R&D Inc: next-generation authentication solutions including voice, behavioral, and fusion biometrics.
  • TARA Intelligence Inc: a SaaS application to scope projects, assign developers, and monitor ongoing performance to build software faster.
  • Uru: fusing computer vision and artificial intelligence to create better ad experiences for video.
  • Wallarm: an adaptive, intelligent, application security platform.
  • Waygum, Inc.: intelligent IOT platform and mobile app for manufacturing.


To see a list of finalists in Europe and Israel, visit Microsoft Ventures.


POSTED IN: Madrona News

And the Madrona Prize goes to . . .

(pictured Madrona team, Hank Levy, Runners Up and Madrona Prize Winners)

Last night, Madrona awarded the 12th Annual Madrona Prize to the team at the University of Washington Paul G. Allen School of Computer Science and Electrical Engineering that is building the LabintheWild platform. Working with assistant professor Katharina Reinecke, the team is enabling scientists from all over the world to study how culture influences people’s preferences and abilities while interacting with technology.  The LabintheWild platform uses human curiosity to build a thriving community that is helping to increase the understanding of cultural differences.  Additionally, the prize was shared with Augury, a program that leverages the insight from LabintheWild to predict how a website will be perceived in different cultures and countries.

(pictured Eunice Jun and Manuel Nordhoff)

This year the Madrona Prize went to the team that is working on LabintheWild, which has been used by nearly 4 million participants and is a platform for scientists to test behavioral response and perceptions across the globe. Users take these surveys and immediately see how their response compares with other people in their region and beyond.  Augury shared this prize and has leveraged learnings from the LabintheWild platform to create a system that enables website builders to test the response to their design by country.  The team on this project who will share the prize are Eunice Jun, Nigini Oliveira, and Manuel Nordhoff. The prize is a cash award that goes directly to the team involved in directing and conducting the research.

The newly named Paul G. Allen School has a long history of research that improves lives and delivers business and research growth to the region

Tim Porter, Managing Director

The Runner Up projects were focused in the areas of machine learning and VR. The open source TVM framework simplifies and optimizes running deep learning models on a variety of hardware. A Unified Approach to Interpreting Model Predictions tackles explaining the output from ML models, using other computational methods.  Understanding the “why” behind the insights produced by AI and ML is becoming increasingly important across businesses and research institutions.  And,  Real-Time VR Video Processing with the Hardware-Friendly Bilateral Solver optimizes the processing of VR video in the cloud, a commercial problem we are well acquainted working with VR companies such as Pixvana.

“The newly named Paul G. Allen School has a long history of research that improves lives and delivers business and research growth to the region,” said Tim Porter managing director, Madrona Venture Group. “The UW is an invaluable resource to our technology ecosystem and we are looking forward to the increased impact that the new Bill and Melinda Gates Center will make possible.  Research such as LabintheWild and the runners up are key components to what makes the Seattle technology industry so vibrant.”

“The Allen School is lucky to be part of a region teeming with global technology companies who partner with us, and our yearly research day is an opportunity to showcase our latest research innovations and our talented students for this community,” said Hank Levy, Director of the Allen School. “We really appreciate Madrona’s partnership over the years and their role in our ecosystem.  They encourage our students through the Madrona Prize and they amplify our impact by starting and building companies based on technologies we develop.”

The Madrona Prize is awarded at the end of the Allen School Industrial Affiliates day.  The Industrial Affiliates brings together all the top research projects and papers being pursued by professors, graduate and undergraduate students at the school.   The Madrona prize goes to the research project with the most commercial potential.  Since Madrona’s inception, more than two decades ago, Madrona has funded 17 companies out of the University of Washington.  These companies include Impinj (NAS:PI), SkyTap and Turi (acquired by Apple.)

Each year, the Madrona committee also awards Runner up prizes.  This year the Runners up were:

Runners Up

A Unified Approach to Interpreting Model Predictions

Scott Lundberg

Adviser:  Su-In Lee

TVM:  End-to-End IR Stack for Deep Learning Systems

Tianqi Chen; Thierry Moreau; Haichen Shen

Advisers:  Luis Ceze, Carlos Guestrin, Arvind Krishnamurthy

Real-Time VR Video Processing with the Hardware-Friendly Bilateral Solver

Amrita Mazudar, Armin Alaghi

Advisers:  Luis Ceze, Mark Oskin

POSTED IN: Madrona News

Madrona Welcomes Back Ted Kummert

Today we are pleased to announce that Ted Kummert is rejoining Madrona as Venture Partner.

Ted spent the last four years at Apptio as EVP of Engineering and Cloud Operations. While at Apptio (NASDAQ:APTI), Ted built a world-class engineering and product team and transformed Apptio’s core platform from a custom solution to distinct, SaaS applications designed for enterprise and federal CIOs and CFOs. Under Ted’s leadership, the team conducted a major modernization of Apptio’s underlying technology, developed real-time analytics for leading public cloud providers, and built the industry’s standard model for IT costing into Apptio’s applications. Ted also led the release of new cost transparency, planning, benchmarking and IT chargeback applications while tuning Apptio’s technology to the needs of public sector IT leaders.

Prior to Apptio, Ted was a Venture Partner at Madrona where he worked with our growing companies on the engineering and management challenges of small and mid-sized companies.  Ted came to Madrona from Microsoft where he drove major product and business initiatives while leading the database and SQL server division for the company.

Ted was a valuable resource to our companies and the Madrona team during his first stint as Venture Partner and we are excited to have him back!

POSTED IN: Madrona News

Matt McIlwain to Receive Emerging Company Director Award

Next week Matt McIlwain will be awarded the Emerging Director of the Year award from the Puget Sound Business Journal, in partnership with the prestigious National Association of Corporate Directors’ (NACD) Northwest chapter.

We congratulate Matt but we are not surprised.

Matt joined Madrona in 2000 and has played an important role in the growth of the technology industry in the greater Seattle region. He has advised founders and entrepreneurs, CEOs, executives and brilliant engineers.

Matt also puts his passion for education and research to work on the non profit side, serving on non-profit boards such as the nationally recognized Fred Hutchinson Cancer Research Institute and the Greater Foundation.

Tom Alberg, co-founder and managing director at Madrona commented, “Where Matt’s depth of passion, experience, and acumen comes into play on a daily basis at Madrona is helping our companies grow.”

The CEOs and founders he works with offered these observations.

Mark Mader, CEO Smartsheet
Matt intuitively understood the value of Smartsheet’s innovation in our earliest days, even when the “signal” was not as pronounced as it is now. In the years since, his counsel and guidance helped us deliver wave upon wave of growth. He digs in deep to understand our needs from multiple perspectives – market trends, buyer needs, funding, executive talent – and offers observations that continue to make a difference for our business. We’re proud to have Matt on the Smartsheet Board and could not be happier for the recognition he so richly deserves.

Bill Richter, CEO Qumulo
What makes Matt truly special is everything beyond his role as a company director.   . . .  as a CEO, Matt’s often the first person I call when I need perspective.  I’ve been through many difficult situations with Matt.  While others are prone to wilt under pressure or compromise core values, Matt’s counsel and leadership only gets better.

Sunny Gupta, Founder and CEO, Apptio
I consider Matt to be a co-founder of Apptio.  Right from day one, Matt has been a sounding board for me regarding my team, product, market, early employee hiring.   As a board member of Apptio today, Matt continues to provide amazing contributions including recruiting new board members, engaging deeply on market expansion strategy and helping my team think about  critical issues – he is always there for me – I usually call him weekly on my way home and always appreciate talking about issues/challenges/opportunities at Apptio – he is a great listener and provides candid advice (always speaks the truth).

Frank Mycroft, Founder and CEO, Booster
Matt is the kind of company-building partner that any entrepreneur would be blessed to have on your side from Day 1.  A mentor and river guide, in it for all the right reasons.

Arif Kareem, CEO of ExtraHop
Matt has had a tremendous impact on the growth of the Seattle tech community over the years. His vision in major market categories like Cloud and Big Data has been a driver of the Puget Sound region’s rise to prominence as a center of innovation in the United States. ExtraHop, along with many other Seattle-based tech companies, has benefitted greatly from Matt’s thoughtful and insightful guidance. Congratulations Matt, on this well-deserved honor.

Jason LeeKeenan, Co-Founder and CEO, TraceMe
Matt is one of the most strategic people I have ever met and has been incredibly valuable as a board member for TraceMe.  We are in the early phases of the company and his strategic perspectives around what capabilities we need to build have been tremendously important to the company.  We are very fortunate to have Matt on our board and I believe he’s one of the best early-company board members in the Pacific Northwest.

Kabir Shahani, Co-Founder and CEO, Amperity
Matt is one of my most trusted advisors and an extraordinary coach. He knows how to bring out the best in his CEOs — and is able to do that alongside tangible, actionable, operational guidance and perspective. He’s a life long learner and that is just one of the characteristics that makes him more effective each and every day. I can’t think of a more deserving Director for this award.

Kiran Bhageshpur, Founder and CEO, Igneous Systems
No one can contest Matt has an incredibly deep understanding of the storage market and he was the logical person for us to go see when we were starting Igneous.  Not only was he quick to understand the market we were attacking, he had and continues to have creative ideas and bring an untiring energy to board meetings and beyond as we work to build a next generation storage company. Having him as an active board member, coach and business partner makes all the difference.

Doug Schneider, CEO 2nd Watch
Matt’s business and market acumen coupled with his relentless drive to build market leading companies is a true asset to any CEO he collaborates with.

Thor Culverhouse, CEO SkyTap
I have had the opportunity to work with Matt over the past 4 years while growing and building out our company, Skytap.  In that endeavor, I have always viewed Matt not as just investor, but rather a business partner.  He has provided guidance in the areas of overall strategy, product positioning, personnel and even sales campaigns.  He is truly one of the great minds of our industry and pleasure to work with.

Brad Jefferson, Founder and CEO, Animoto
Matt joined our board nine years ago and is a great great strategic advisor for the company but what I appreciate just as much is his mentorship to me personally as I grow as a CEO.

 Nikesh Parekh, Founder and CEO, Suplari
I have known Matt for a long time.  We both moved to the Pacific Northwest in 2000 to work in venture capital.  Matt recruited me to be an EIR at Madrona in 2007 and lead our financing of Suplari in 2017.  Matt goes out of his way to understand, help, and support me in many ways over the last 17 years.  He is a great friend and partner in business.

Workwise, Matt is one of the strongest strategy and marketing minds for new and emerging enterprise software and cloud technologies in Seattle.  He is quick to see the big picture and understand the tactics to achieve key milestones.  I get the benefit of his experience with a large number of similar companies and he is always quick to get back to me, even when he is working with larger and perhaps more important companies in his portfolio.  

POSTED IN: Madrona News

Announcing the Microsoft Ventures and Madrona Venture Group AI Startup Competition

Today we are announcing our partnership with Microsoft Ventures to launch the Innovate.AI global startup competition. We are thrilled to be working with Microsoft on this project to find the world’s most promising early stage startups tackling unsolved problems, at scale, using machine learning and artificial intelligence.

At Madrona we have been early believers and investors in the transformative power of Artificial Intelligence and intelligent applications. The convergence of cloud computing (massive amounts of compute and storage available on the cloud at reasonable price points), specialized chips for machine learning (e.g., GPUs and FPGAs), and new advances in machine learning algorithms has created a unique opportunity for startups to build high value intelligent applications powered by unique and proprietary sources of data.

We have invested early with several platform companies and are actively looking at vertical applications.  Examples include Turi, purchased by Apple, Lattice Data, purchased by Apple,, MightyAI, Amperity, SmartAssist, Suplari, Saykara, Versive and others.

In thinking about how we might reach companies as early as possible we came up with a couple of ideas including developing an “American Idol” like competition.  In discussions with our friends at Microsoft – we saw that we were aligned on interests in finding, supporting and investing in AI focused startups in the early days and we worked together to develop the AI:Innovate competition which Microsoft is taking Global.

We believe that in the next five to ten years, the impact of these technologies will transform most industries, from education, to real estate, to manufacturing, to transportation, to healthcare and we have only begun to see the impact of machine learning on the economy and society.

Over the next six months, Madrona will work closely with Microsoft Ventures to select a batch of promising startups that are either building new products and platforms with data and machine learning at their core or using AI to build the next generation intelligent applications.  These startups will compete for a $1M investment from Madrona and Microsoft Ventures as well as an Azure package of credits, Office 365 licenses, and technical support worth over $500K.

Additionally, startups may also win an “AI for Good” prize that will be awarded to one startup that is using AI to create a positive impact on society, which will earn $500K in funding from Microsoft Ventures and Azure package of credits, licenses, and support worth over $500K.

The qualification requirements for startups to participate in the Innovate.AI global startup competition are as follows:

  • Companies that have raised no more than $4M in equity funding and/or loans at day of application
  • Companies that offer or intend to release or build a product or platform which utilize machine learning; such product/service/platform must be based on a model developed by the company, and/or be trained with data obtained/generated by the company or a 3rd party, and/or make use of pre-trained ML/AI APIs
  • Companies can utilize any technology stack or cloud platform to build their product, but the intention will be to work with the winners to help them utilize Azure and MS technology through our BizSpark offers and portfolio development efforts

See Peggy Johnson’s (EVP, Microsoft) blog post  for more details about this competition.

Madrona is excited to kick off the Innovate.AI competition with Microsoft Ventures to find the next generation of great machine learning and artificial intelligence companies. The competition begins this month with applications, and we intend to select a final winner by Spring 2018. To find out more about entering the competition or submit an application, please visit the Innovate:AI page to view more information!


POSTED IN: Madrona News

Maybe It’s Time to Cede the Highways to Driverless Cars

POSTED IN: Portfolio Company News

Introducing Wicket, a Video Analytics Platform

L-R Ian Blaine, CSO, Len Jordan, Madrona, Marty Roberts, CEO

A lot has changed in the media world since Bruce Springsteen delivered his eponymous lament “57 Channels and Nothing On” in 1984.  First, there are more than 57 ‘channels’ on cable and satellite TV. Neilsen data from a few years ago suggested that that the average home had access to 189 channels and watched only 17.  Perhaps more importantly, the US subscription cable/satellite business peaked at 100M users in late 2015 and although still a big business at just under $100B for 2016 the rise of ‘cord cutters’ or ‘cord nevers’ is creating a pre-Cambrian explosion of new over-the-top (OTT) IP video experiences.  There are now hundreds of conventional cable channels, thousands of live and on-demand OTT programs, (they aren’t really channels) and there is plenty of award-winning programming ‘on’, but other than that Mr. Springsteen was right. J

Today, we are excited to lead the $2M series seed round of Wicket Labs, a company directly attacking the value equation for media companies in this new blended world of OTT and traditional channels.    Wicket is building a SAAS platform for measuring and analyzing video consumption, giving media companies insight into how the many channels available to them are performing and which content is driving viewers.  The market opportunity is substantial- combined video revenues from subscription television, OTT services and advertising is projected to exceed $193B in the US this year.  The challenge for content creators, marketers and distributors is understanding the rapid and dramatic shifts in consumption patterns as users watch a growing selection of different programs on new networks, different devices and a complex array of pay and ad-supported services.

Wicket’s team is led by cofounders Marty Roberts and Ian Blaine from thePlatform (acquired by Comcast in 2006).  Marty and I worked together years ago at RealNetworks and it’s a privilege to be working together again- the quantity and color of our hair has changed but I’ve always felt hair is generally overrated.  Marty and Ian have deep relationships with TV studios, OTT services and distribution networks- they spent years understanding the challenges in the market and have developed a breakthrough product plan that will provide a compelling level of insights for the industry.

Wickets’ first product will help marketers understand consumption and retention patterns.  What are the attributes and characteristics of my customers? What programs are my customers watching and how often?  Live or time-shifted?  What other networks and programs are they watching?  How did I acquire the customer and what trial programs are most successful?  What patterns can be discerned from lost customers that would help me drive improved retention?

Over time Wicket will be able to help marketers, content creators and distributors understand the best approaches to producing and delivering the best customer experiences.  This will become even more important as the market continues to evolve.  There are now 11 different OTT services in the US generating more than $8B in 2015 and projected to grow to $23B by 2021 (Digital TV Research) More than 1/3 of US homes now have an OTT TV device (eg Roku) and as consumption on laptops and tablets accelerates there is a lot of opportunity for innovation in digital content creation, packaging, promotion and distribution.

sThe changing dynamic in video content may best be illustrated by this year’s Emmy awards where three of the top ten nominated networks (Netflix, Amazon and Hulu) were not even creating original content just five years ago.  Several of the other top ten networks (CBS, HBO, Disney/ABC) have announced or launched their own DTC (direct to consumer) OTT services and dozens more have announced plans or already launched.  Wicket hopes to be at the center of this market as a valued partner and we are excited to be part of their team.




POSTED IN: Madrona News

The Rise of Autonomous Vehicles and What It Means for Our Interstate Highways

Download the full report

As automakers and technology companies begin shipping and operating autonomous vehicles, legislators, regulators, and transportation planners need to examine and consider how autonomous vehicles and other innovations such as car-sharing and ride-sharing can be integrated in large-scale transportation planning.

We published a report last year that proposed a vision for converting I-5 into an autonomous vehicle corridor at some point in the future. This year, we updated that report based on new market conditions to be more specific and more aggressive as the roll out for autonomous vehicles has sped up beyond our expectations.

Travel between Vancouver and Seattle can be long, tedious, and dangerous, but autonomous vehicles offer a solution to decrease traffic accidents (and resulting congestion), decrease travel times, and help travelers recover valuable productive time. These vehicles will likely to be part of ride-sharing fleets and other travel services that will benefit the entire population and lower the cost of transportation for everyone.

In our updated 2017 report we propose to convert I-5 between Vancouver and Seattle into an autonomous vehicle corridor by 2040. We suggest a phased in approach that begins with allowing autonomous vehicles to share the HOV lanes immediately and progresses to devoting two lanes to autonomous vehicles (which will create space for three autonomous vehicle lanes). Finally, by 2040, we believe all lanes of I-5 will be dedicated to autonomous vehicles during peak travel times.

By actively embracing and planning for a future with autonomous vehicles, Vancouver and Seattle can be an innovation leaders to cities and regions around the world, serving as an example for how to proactively and responsible incorporate this important cultural and technological change into their regional city and transportation planning.

POSTED IN: Madrona News

Today We Join onBoarding Women

Caption L-R: Ed Thomas, Lucinda Stewart, Hope Cochran, Stewart Landefeld at the 2017 opening event for onBoarding Women)

Today Madrona is joining Deloitte, Perkins Coie, and Spencer Stuart in supporting onBoarding Women, an important program to increase the number of women on corporate boards.  This Seattle based, forward-thinking organization started two years ago with the mission to increase the number of women on public company boards.  There are many studies that show that companies with women in executive and board positions perform better for shareholders.  Nationally the percentage of women on public company boards is 19.5%.  Washington state, despite making recent gains, still lags behind.  onBoarding Women aims to change that and has already had success, graduating 35 women from the program and helping to place graduates on boards for companies such as Washington Federal.

As venture capitalists with more than 60 companies in our portfolio, we serve on a lot of boards – from early startups to late stage to the newly public. We see the value in developing a diverse and independent board that can guide a young company through the choppy waters of developing a product, finding a market, building partnerships, and nurturing customers.  Our portfolio company, Redfin,  recently went public and is a leader in creating diversity in the board room with women representing 25% of their current board. In July of this year, Redfin, announced a pledge to diversify startup boards that Madrona and another Redfin investor Greylock Partners supported.

It is in this light of helping our companies be the best they can be and supporting the broader Washington business community, that we are very excited to join onBoarding Women.  Hope Cochran, a Venture Partner with Madrona and experienced executive as well as private and public company board member, will be a mentor, and our whole team will be working with the new onBoarding Women cohort to build a strong pool of women who can help greater Seattle companies rise to the next level.

We are excited to work with the leadership of Ed Thomas – Deloitte, Lucinda Stewart – Spencer Stuart, and Stewart Landefeld – Perkins Coie to continue to bring more women into the board room – be that public or private!


POSTED IN: Madrona News

Cascadia Innovation Corridor Conference 2017 – Financial Innovation and Cross Border Discussion

Photo caption l-r  Tom Alberg, Glenn Kelman, CEO, Redfin, Heather Redman, Founder, Flying Fish Partners, Jeff Sinclair, Co-Founder and CEO, EventBase,  Scott Jacobson, Managing Director, Madrona Venture Group, Alexandre Guertin, Associate, Kensington Capital Partners

The second annual Cascadia Innovation Corridor Conference just concluded and the conference continues to spur ideas and cooperation between the metro areas of Seattle, WA and Vancouver, BC.  This conference brings together business, government and university leaders from both cities to talk about tech policy, life sciences, transportation and other aspects of our lives in the Pacific NW that bind us together and are areas for collaboration.

At the conference Madrona and Microsoft worked together to introduce the Financial Innovation Network (FIN)  – a Seattle /Vancouver group to be launched this fall. Announced by Microsoft President, Brad Smith, in his opening keynote he said of FIN “The key for success especially for this region is to frankly become bigger. What this Financial Innovation Network allows us to do is just that. It enables us to bring together startups and double our scale. This is a great example of how we can compete as a region and no longer think apart.”

As articulated by Madrona Managing Director, Tom Alberg, at the start of his “Spurring Increased Venture Capital Investment in the Corridor” panel yesterday, the purpose of the Financial Innovation Network is twofold: 1) To encourage more cross-border investment in early stage companies by creating a network to bring in more foreign capital and to work with existing local sources to increase investment. 2) to help develop a financial cluster of institutions and fintech companies that collaborate and create a powerful fintech and financial institutional presence in each city. While Vancouver ranks ahead of Seattle in international finance, Seattle has great tech to offer.

Tom’s fellow panelists agreed that both cities can benefit from increased access to capital, especially in order for startups to reach proper scale on a timeline that investors expect.

The long-term FIN strategic objective is the creation of an integrated financial services cluster that competes directly with other similar-sized International Financial Centers (IFC), such as Boston, Dublin, Shenzhen, Munich, and Melbourne. Initial FIN programs will include promotion of coordinated digital economy cross-border investments with an emphasis on fintech, mixed reality, artificial intelligence, intelligent apps and quantum computing.  The group will be administered by a cross border executive committee and Rex Hughes, a Madrona advisor.



POSTED IN: Madrona News

Heptio – a Day One Cloud Native Company Raises Series B

Today, Madrona is very pleased to announce that we are leading the new $25M Series B round in Heptio, partnering with existing investor Accel Partners and new investor Lightspeed Venture Partners.  Heptio is another example of a “Day One” investment for Madrona.  In November of 2016, we participated in the Heptio Series A led by Accel.  In doing so, we partnered with Heptio founders and Kubernetes co-creators Craig McLuckie and Joe Beda at the very formation of their company whose mission is to (initially) make Kubernetes more accessible for all enterprises and (longer term) provide the standard framework for delivering enterprise apps in a multi-cloud world.

Our thesis with the Series A was pretty simple:  (1) one of the largest trends in enterprise computing was the move to cloud native technology (container-based distributed microservices) and operations, (2) Kubernetes had become the leading way to orchestrate and manage container-based applications, (3) customers were beginning to demand better ease of use, accessibility, and an independent provider of support, services and training, and (4) the best team in the world to build this company began with Craig and Joe, two of the Kubernetes co-creators.

Since that time, the team has executed extremely well and, if anything, the market for Kubernetes has continued to explode even beyond expectations.  Today, 50 of the Fortune 100 are using Kubernetes across industry verticals from retail to banking to manufacturing.  Kubernetes continues to be the most active open source project in the world, and all the major cloud platforms are adopting it.  Craig and Joe have begun to build a world class team at Heptio, launched three initial products, landed a number of high-profile (although still confidential) customers, and laid the groundwork for key partnerships.

Given all this progress, and our conviction that Heptio can be one of the next billion-dollar cloud companies in Seattle, we were honored to partner with great open source and infrastructure investors like Ping Li from Accel and John Vrionis from Lightspeed to lead the Series B.  We are looking forward to continuing to partner closely with the Craig, Joe, and team to build Heptio through this next phase and beyond.

POSTED IN: Madrona News

Day One in the Cloud with Skytap

It was the spring of 2006.  Professor Hank Levy, incoming Chair of the University of Washington Computer Science Department (now the Paul G. Allen School) and I were catching up.  Hank and I had previously worked together on a successful start-up that he and his grad students co-founded called Performant.  As I sat watching Hank type on a keyboard, the words he typed appeared on a nearby computer monitor.  But, the application was not running on a local device, it was running “in the cloud.”

As hard as it may seem, in the spring of 2006, AWS had not launched Simple Storage Service (S3) or Elastic Compute Cloud (EC2) yet.  But Hank, two other remarkable Professors (Steve Gribble and Brian Bershad) and PhD student, David Richardson, were working on the underlying networking and compute technologies that would help power the cloud. As this group discussed the potential customer needs their technology could help address, we decided to found a company.

As we have written about recently, it is both energizing and inspiring to partner with founders from Day One.  Skytap, originally known as “illumita”, is the company we seeded in the summer of 2006 along with the Washington Research Foundation and Bezos Expeditions.  Eleven years later, Skytap is announcing its $45 million Series E round led by Goldman Sachs.

Skytap has always attracted incredible talent to the company.  In the early years, the company had to build most of a ‘cloud infrastructure platform’ themselves as the market for modern hypervisors, public cloud infrastructure and enterprise customer readiness were immature.  At that time, the team naturally focused on hiring world class product management and engineering executives.  In more recent years, under Thor Cullverhouse’s leadership, Skytap has built a world class go-to-market team.  Enterprise customers are now fully embracing the cloud in all its forms – public, hybrid and private.  And Skytap is accelerating cloud innovation for the hybrid applications that are developed and increasingly deployed by enterprises in the cloud.

The Madrona team has had the privilege of partnering with Skytap’s founders and team from Day One.  Eleven years later, we have never been more excited about the success and long-term potential of the company.  It is interesting to note that the three Madrona backed companies that went public in the past 12 months were part of the Madrona family on average for thirteen years at the IPO date.  We look forward to seeing what happens in two years when Skytap celebrates their thirteenth birthday!

POSTED IN: Madrona News

Why We Invested in GawkBox … in Three Charts and One Photo

Pictured in the Photo – L-R Andrew Allison, CRO; Hope Cochran, Venture Partner Madrona, Daniel Li, Senior Associate; Chris Brownridge, CEO; Tony Chong, CTO

Today we are excited to announce our investment in GawkBox. Over the last few years, we have closely followed the macro trends in live streaming, digital marketing, gaming, and eSports, and we are thrilled to be partnering with the GawkBox team to build a company at the center of this ecosystem.

GawkBox is a platform for the live streaming market that lets fans send sponsored “tips” to their favorite streamers by downloading and completing actions in specific games or apps. Fans can make donations to streamers without direct credit card purchases, and advertisers can engage fans of live streamers with targeted and measurable marketing campaigns.

GawkBox’s users, creators, and advertisers all love the platform because it solves the problem of monetization in the live video market, creating a win-win-win for everyone. Obviously, they have a great product, but why else are we excited about this? Here’s why in three charts:

Live Streaming and Online Video is the Future of Media

Over the last 5 years, the average daily viewership of Twitch has increased 10x to an average of nearly 800,000 viewers per day. In the same time period, Disney has lost over half of its key demographic of kids age 2-11. (For an additional point of comparison, the average daily viewership of CNN is ~700-800K and ESPN is ~800-900K viewers). While Twitch and other online video channels continue to grow, traditional broadcast and cable viewership is shrinking.

Why? Online streaming video is accessible anywhere, on-demand, and interactive. The unique combination of social and broadcast media on sites like Twitch or Facebook also makes live streaming incredibly sticky because of the ability to interact in real time with the people creating the content. Live, online video will redefine media, and we’re not the only ones who think so – Mark Zuckerberg is “obsessed” with live streaming too.

We’re excited about this because GawkBox is building a platform that helps more content creators earn money and build careers in live streaming and online video. By solving a key monetization problem, GawkBox is going to accelerate the growth of the industry.

Digital marketing is growing rapidly as advertisers see positive ROI

 It’s not a coincidence that two of the largest companies in the world today are digital marketing platforms focused on measurability and performance. Marketers and advertisers spend a lot of money on ads if they can measure a positive return on investment. (If you want to learn more about performance marketing from an advertiser’s perspective, I highly recommend this video with Gabe Heydon, the CEO of MachineZone, on what the future of marketing will look like).

Over the last century, newspaper advertising revenue reached a peak of $49B across all newspapers. Alphabet surpassed that in just 15 years because they were the first company to offer a performance marketing solution at scale. Facebook is growing just as quickly because it offers a straightforward way to market products and acquire users while allowing advertisers to measure their return on marketing spend.

Today, as a marketer, it’s very hard to deploy dollars into the live streaming market because it is not scalable to sign many deals with individual streamers, it is difficult to measure installs from impressions, and the live streaming format does not lend itself to traditional display, banner, or video ads. GawkBox is the first company that allows marketers to access the live streaming market with a performance marketing solution, and their ad ‘unit’ is a fun, endemic way to engage with fans. 

Gaming and eSports are massive, early-adopter markets

The media loves to cover eSports, especially tournaments with big prize pools, billionaires spending tens of millions of dollars to purchase teams, and young players who earn millions of dollars playing video games. However, the other topic that gets covered less is the pure entertainment value of gaming. Big gaming companies (and small indie game studios as well) have experienced massive growth over the last 5 years, and we’re willing to bet more kids in the US have played Minecraft than football, baseball, or soccer. In fact, there are 2.6 billion gamers around the world in 2017, compared to 100 million in 1995, according to Mary Meeker.

The growth in gaming can be attributed to many factors, including the ease of marketing and distribution across platforms like Steam, Xbox Live, and app stores, the gaming industry’s ability and willingness to innovate on their products, and a larger trend towards more interactive forms of entertainment.

Many of GawkBox’s earliest partners are gaming publishers, gamers, and other people in the gaming ecosystem, and we think this is a fantastic initial market. We’ve seen before that many innovations in gaming like online networking, graphics computation, secondary markets, messaging, and free to use/play business models quickly make their way to other industries and use cases, so there is a lot of room for GawkBox to expand into other types of customers after this initial early adopter audience.

We are big believers in this team and their ability to build a big business

Chris, Andrew, and Tony, the cofounders of GawkBox, worked together as early employees of Vungle, where they pioneered the concept of rewarded video ads and built a $300+ million revenue business. Since our first meeting, we have been consistently impressed with their ability to lead, execute, and envision the future of this market.

At Madrona, our philosophy is to partner early with the best entrepreneurs in the Pacific Northwest, and we have been lucky enough to work with many of our most successful companies from day one. After working with this team, we are absolutely convinced they are going to be doing big things, and we are very excited to be leading their Series A.

Finally, here is a link to the GawkBox website. I highly recommend checking it out and telling your favorite streamer about it!

  • If you’re a fan, you will love this product because you can support your favorite streamers without having to make actual credit card purchases. Just play games or download apps from the top publishers and earn tips for your streamers.
  • If you’re a streamer, you will love this product because it is a simple way for your fans to support you, and other streamers are doubling their monthly income after partnering with GawkBox.
  • Finally, if you’re an advertiser, you will love this product because you will be able to engage with the live streaming audience in a fun, unique, and native way. And you’ll be able to measure your return on advertising spend on a granular level and encourage users to reengage with your game or app after the initial install.

We are thrilled to be invested in this amazing Seattle-based team who has big plans for how they are going to change the world of live streaming, marketing, and gaming. It’s early days for this industry, and we are excited to be building the future together!

POSTED IN: Madrona News

Partnering from Day One with Founders

There is something very special about being part of the team that builds a company from Day One.  We at Madrona have been both dogged and fortunate in our pursuit of Day One opportunities.  Placed is one of those.  The company’s acquisition by Snap! which closed last week is the beginning of another journey for the company and a huge endorsement of the path the company has taken to this point.

In the past twelve months, five of the companies the Madrona team has been involved with since Day One  had significant positive M&A activity or have entered the public markets.  These companies are Apptio, Impinj Turi (fka Dato), Lattice, and the aforementioned, Placed. In every case, these companies had exceptional founders who were with the company at day one and continue to be key executives at those companies or their acquirers today. It is also true that these founders and their companies had moments of despair, uncertainty, exhilaration and ultimately success.  These stories are truly incredible journeys and we are thrilled to have been there from the beginning to participate in the evolution and support at many points along the way.

Placed – A Day One Journey from Sewichi to Snap

Placed is a great example of how these companies grow. While many of our companies have a founding team, Placed was initially founded just by David Shim.  David had previously worked for two other Madrona portfolio companies, Farecast and aQuantive, and we had recognized him as a talented “rising star” in those companies.  After a short stint in California at Quantcast, he moved back to Seattle in early 2011 and shared an idea he had for creating a company focused on location analytics.  We had liked David and his scrappy approach at Farecast so we jumped on board.  David set up shop in our innovation space (then more limited than now) and got to work.

David understood that mobile and the cloud made it possible to create intersections of data between digital and physical locations.  With that he started coding, testing and talking to potential customers.

Soon after he came to Madrona, we helped found and seed fund Sewichi (Korean for Location, Location, Location) and then set to work helping David refine his ideas and recruit his team.  Initially he hired engineers and data scientists to help work with the data they would obtain – people like Nick Gerner and Weilie Yi who he connected through his network.  And then David added Andrea Eatherly who he had worked closely with at WebTrends and Quantcast to lead audience recruitment and customer success. Over time, Madrona helped recruit other key team members such as Elliott Waldron and Aaron Averbuch.  All of these core team members are still with Placed today.

The early days were hard as the iOS and Android ecosystems were nascent and applications that measured location were prone to using battery life.  In addition, it was not clear what economic incentives would be required to build a meaningful panel of consumers.  And, then there was the challenge of figuring out what model would be best to monetize the location-related data – research, measurement, or becoming an ad network?

By listening to customers (in this case the combination of advertisers, online publishers and ad networks) and making a strategic decision to remain an independent measurement company, Placed began to gain traction in the market.  In the past five years, Placed transformed the way brands understand the impact of their marketing investments in the digital and physical worlds, and the company has consistently grown revenues 100%+, beat their operating plan and done so profitably.

There have been many important strategic and partnering decisions to make along the journey as the world of digital advertising continually was shaped by trends like programmatic buying, the shift to mobile-first customer usage and the rise of social media engagement.  Last year, Placed added another industry expert and long-time Madrona friend Brian McAndrews to the board to help navigate these changing market dynamics.

By early 2017, Placed was pulling away as the market leader and the board sensed an opportunity to “step on the gas” with an expansion round of capital.  Multiple options emerged, and one of those options turned in to a conversation with social media app company, Snap!  Placed ultimately took the route of acquisition by Snap, which closed last week.  We are really excited to see how the Placed team, as an independent line of business, will help Snap continue to innovate and differentiate in the markets where they compete.

It is a privilege to work with companies from Day One – and we celebrate the founders who have the persistence, grit, and humility paired with the conviction to build a business, nurture a team and partner with both us and also the important industry stakeholders to move their company forward.  We have been on a similar journey with many other companies including Rover, Redfin, Turi, Lattice, Apptio, and Impinj – to name just a few that have been recently in the news, and look forward to applying our learnings and experience to working with new Day One founders.

If you are a potential Day One founder interested in working with a Day One partner, give us a shout!  Check out the bios here and reach out.


POSTED IN: Madrona News

Our Investment in Algorithmia

We first met Diego and Kenny in 2014 after being introduced by our friend Joe Heitzeberg, and immediately knew they were founders we wanted to work with.  Their idea resonated.  The world needed an app store for algorithms.  As all applications become intelligent applications, better ways were (and are) needed for developers to quickly and efficiently tap into intelligent algorithms – especially for machine learning.

Kenny and Diego’s vision was to bring together the largest collection of algorithms in the world, each with their own product detail page and community reviews, each accessible with a consistent API, each modifiable and combinable, with production-ready performance and reliability, no friction to get started, and affordable to use deeply and broadly.  And unlike most marketplaces where demand does not care until there is supply, and supply is not interested until there is demand – Algorithmia had a an elegant way to bootstrap their marketplace.  “Supply” was sourced from open source, from universities, and from bright algorithm developers around the world who did not have an outlet for their work, much less monetize it.  The Algorithmia marketplace launched in 2015.  Fast-forward two short years and over 3500 algorithms are now in the marketplace with almost 50,000 developers using the system.  The company’s early investments making Algorithmia one of the best platforms in the world to do ML and deep learnings have paid significant dividends.


Part of Kenny and Diego’s thesis has always been that enterprises and large organizations would want to tap into the Algorithmia “brain” of algorithms.  They started receiving signal to validate this idea early on.  Enterprises began to ask:


“Can we have our own Algorithmia?”

“Can we get an Algorithmia-in-a-box that we can populate with our own algorithms and also pull in yours?  We have a difficult time sharing our in-house developed algorithms across divisions and groups, which creates a huge cost of re-inventing the wheel.” 

“We need infrastructure and a microservices platform that can allow us to be agile with our machine learning models, and spin up these workloads as quickly, reliably and cost-effectively as Algorithmia.”

Thus, Codex was born, with In-Q-Tel becoming one of the early customers.   Now many enterprises are using Codex as their in-house machine learning platform.  The synergy between Codex and the public marketplace is essential – every enterprise customer or prospect has already tried, if not discovered, the company via Algorithmia marketplace.  Algorithmia today is truly more than a marketplace for algorithms – it is a microservices platform for machine learning both in the cloud and on-premise.

Kenny and Diego had a compelling vision, and they are also great full stack entrepeneurs.  Maniacally customer focused, tireless workers, very technical with sound business instincts.  They also have hired a GREAT team that has gotten more done, consuming fewer resources, than almost any team we have worked.  This has all translated into excellent execution.

Now, we are thrilled to have the new Google fund focused on AI and ML lead Algorithmia’s $10.5M Series A.  I am particularly excited to work on the board with Anna Patterson, a visionary engineering leader who has led large scale machine learning work and teams across Google, within Android, core search, and her own startup.  The broader Google team and world-class platform will be an incredible help to the company.

Algorithmia fits into Madrona’s goal to fund smart teams early in large, growing markets within key thematic areas. The shift to DevOps focused, cloud native enterprise computing and the rise of intelligent apps powered by AI and ML technologies are the megatrends driving Algorithmia and have been core themes for Madrona over the past several years.

We could not be more excited to continue to help Diego, Kenny and the team build and even more rapidly scale Algorithmia.  We are honored to be part of the investor group that includes other returning investors Rakuten, Osage Partners, as well as excellent new investor Work-Bench.

Whether you are a developer of any level – Algorithmia users range from university students and hobbyists to senior enterprise architects and data scientists — or an enterprise that needs a (better) ML platform, I highly encourage you to go give Algorithmia a try!


POSTED IN: Madrona News

Announcing GoVertical Machine Learning Workshop Weekend at Madrona Venture Group – June 9-12th

Machine Learning technology is everywhere!  Yes, it is hyped but it’s also rapidly transforming how we work and live.  Would you like to join the movement of innovators changing the world?  Come to Madrona Venture Group offices the second weekend in June to show off your machine learning, product and business skills to create prototype analytical business solutions based on real data.  Meet and collaborate with top business and technology leaders in our region along with other aspiring entrepreneurs. The best ideas will have a shot at blossoming into real companies!

Co Hosted with TiE Seattle and KRNL Labs and led by Amit Mital and me, this is the first in a series of GoVertical experiences we plan to offer around leading edge technologies changing our lives. Participants will be supported our roster of rockstar machine learning and startup mentors which includes experts from Amazon, Costco, Apple, Microsoft, Placed, OfferUp, Socrata and AI2.

We will convene on Friday night and work through the weekend, powered by our creativity and free food.  Over the course of the weekend teams will build prototype analytical solutions alongside product and business plans, culminating with presentations on Sunday afternoon to a panel of expert judges that includes Oren Etzioni, CEO of AI2, S. Somasegar, managing director, Madrona Venture Group, Gurdeep Singh Pall, CVP, Microsoft; Greg Gottesman, founder Pioneer Square Labs, and Amit Mital, founder KRNL Labs.

Unleash your inner entrepreneur – Come join us for a fun and challenging weekend!

Get Info and Sign up here!

POSTED IN: Madrona News

The State of Today’s Autonomous Vehicle Market

Only five years ago, the autonomous vehicle future seemed like a distant vision.
This year at CES, the “frenzy” over autonomous vehicles stole the show with dozens of live demos, partnerships, and product announcements. In fact, 13 of the world’s 14 largest automakers have announced plans to bring autonomous vehicles to market, and 12 of the world’s 14 largest technology companies have announced plans to build technologies to support and operate autonomous vehicles.

This sudden interest in autonomous driving has bid up the “going rate” for autonomous driving talent to, at least in one case,  $10 million per person (Harvard, MIT, CMU, and Stanford students take note!)

Clearly, many large companies are investing heavily in autonomous driving technology because they see that autonomous cars not only have the ability to drastically change the auto industry but also see the enormous cultural change that the presence of AVs could create. If we spend more time in the car and have more time there to do stuff . . they want to to be there.

As investors we have been most interested in watching how different stakeholders are shaping their strategies for competing in this market. For example, will automakers build their own autonomous technology, rely on partners, or both? Do automakers think they will continue selling autonomous vehicles to consumers or only to ride-sharing services? Will ride-sharing services companies want to move into other areas of the industry including building autonomous technologies?

The Ever Changing Autonomous Vehicle Value Chain

Here is our view of the current state of the autonomous vehicle value chain. The three high-level layers of the autonomous vehicle market are

  • Service providers (e.g., ride-hailing, ride-sharing, rentals),
  • Technology providers (both hardware and software), and
  • Automobile manufacturing

We see a significant number of companies sitting in between layers – such as Tesla building an autonomous driving system as well as being a car manufacturer – and we also see companies that have historically operated in one area making large investments of capital or time in other layers in order to move into other areas of the value chain. An example of this is

ReachNow, BMW’s rental and ride hailing service which is, among other things, a hedge against being cut out of a possible future where ride hailing vs car owning is the norm. Each of these companies sees an opportunity to capture a larger portion of the end-state autonomous vehicle value chain for themselves, and they are positioning themselves accordingly.

The AV Partnership Matrix – De-risking the future by teaming up

In addition to investing or acquiring companies or talent, companies have also begun forming partnerships to ensure they do not get cut out of valuable portions of the autonomous vehicle market or caught with single source suppliers for key technologies.

For example, with the rise of autonomous vehicles, companies realized that detailed maps might (though it is still under debate) be one of the most critical inputs to self-driving cars for determining whether the car is seeing the environment or another vehicle, person, or object in its environment. This led to several big moves in developing in-house maps and/or acquiring access to other sets of mapping data. For example, in August of 2015, a consortium of automakers bought Here maps for $3 billion; in July of 2016, Uber announced a $500 million plan to map the world’s roads; and in December of 2016, Mobileye announced a partnership with Here’s owners to share their mapping data.

Some other interesting takeaways we see from looking across the autonomous vehicle landscape are:

  • The companies working with the major technology providers are also developing their own homegrown systems. For example, while Volvo is providing Uber with vehicles for their well-publicized Pittsburgh, San Francisco, and Arizona tests, they are developing their own autonomous systems as well through their Drive Me research project.
  • There have already been some high-profile ‘breakups’ in the autonomous vehicle space. After Tesla’s crash, Tesla and Mobileye have pointed several fingers on who fired who (and whose technology led to a fatal crash), Baidu and BMW called off their joint work citing different development paces and ideas about research; but over time we will likely see more differences in tech and/or business philosophies that will lead companies to go their separate ways.
  • Most of the major automakers have aligned themselves with a ride-hailing service – either via investment in the case of Toyota-Uber or GM-Lyft or in other cases building it in house or making a full acquisition. These moves have been interesting because the strength of Uber or Lyft’s driver network becomes less relevant in an autonomous, ride-hailing future. When you can put cars on the road without a person at the wheel, different elements become more important levers of success – namely the ability to manufacture, finance, and maintain cars.  This could give automakers a head start later in the game, so to speak. Though success in ride hailing is also dependent on consumer penetration so companies like Uber and Lyft might have their own leverage over the automaker latecomers.

Other Stakeholders – What are the regulators, drivers, and consumers doing?

As we continue watching the moves that software companies and automotive companies are making in the autonomous vehicle space, we have also been keeping track of what regulators, drivers, and consumers are thinking and saying about autonomous vehicles.

To date, we have been impressed with how proactive the federal, state, and local governments have been in their support of autonomous driving technology. It appears regulators and planners at multiple levels are bought into the potential promise of fewer accidents, less congestion, more productive time for citizens and freed up space now devoted to parking lots in cities. But they are treading carefully, encouraging companies to experiment in safe, controlled ways. When the US NHTSA investigated the fatal crash involving Tesla’s Autopilot – the findings were actually that, though it failed in that instance, Autopilot had decreased the amount of crashes by 40% since introduction of the technology.

However, as this technology becomes mainstream and moves from high-end cars to widespread adoption among ride-hailing and trucking companies, there could be massive disruption to the way the workforce is structured in many different places around the country. A 2015 NPR review of Census data shows that Truck Driver is the most common job in nearly every US state. Autonomous trucks will have a massive impact on the trucking industry.

As more startups and large companies begin public demonstrations and public releases of their products, they must find the right ways to introduce these technologies for both public safety and public perception. “Drive fast and break things” will not be the right approach to releasing autonomous vehicles, and companies need to be thoughtful about the best way to introduce these technologies.

As investors (and eager consumers and citizens) we are watching how the AV market is evolving and looking for opportunities. If the innovations in the last five years happened twice as fast as expected, imagine where we could be in another five – or maybe just two and a half!

POSTED IN: Madrona News

A Brexit Breakfast

(Photo:L-R, Rt. Hon Greg Hands, MP; Liam Maxwell, UK National Tech Advisor; Hope Cochran, Venture Partner, Madrona Venture Group; Rex Hughes, Advisor to Madrona ) 

This week, Madrona hosted the Right Honorable Greg Hands, MP the UK Minister of State for Trade and Investment to talk about the future of Seattle/UK relations in the face of Brexit.

Meeting in Madrona’s appropriately named Alan Turing conference room, and co-hosted with the Discovery Institute, 30 technology company execs, investors and policy experts engaged with Minister Hands and UK government representatives from the Seattle, San Francisco and Los Angeles consulates on a variety of political and economic topics focused on the British Brexit from the European Union.

Minister Hands opened his remarks by emphasizing the strong high tech links between the two countries. Cambridge, and the cluster of companies and labs located near the city which is also known as Silicon Fen, has strong ties to Seattle and Bellevue.  It is the site of a substantial Microsoft Research Lab and the location of Amazon’s first Prime Air flight in 2016.

According to Minister Hands, despite the uncertainties that continue to unfold after the 2016 United Kingdom European Union membership referendum, the UK remains a good place for American firms to conduct European business due to a 1) Established Political system (mature institutions and rule of law)  2) Strong Economy (educated workers to hire and a relatively wealthy populace) 3) Business Environment (employment is at record high and the UK boasts the lowest corporate tax in the G20.)

In his remarks the Minister outlined the desire to create free trade agreements bi-laterally with the US and advocated why this benefits all involved.  John Miller, Senior Fellow at the Discovery Institute has advocated such policies and proposed a broad free trade agreement along the lines of the ones the US has with two other countries in the Commonwealth – Australia and Canada.

Companies around the table agreed that the UK is an incredibly important market and also a great jumping off point for them to the rest of Europe.  To concerns about freedom of movement from the UK to the EU, the Minister gave reassurances that the present government is working to create relationships that benefit the UK and its partners.  Another issue that will be up for discussion is how the UK will implement (or not) the GDPR. The General Data Protection Regulation, a landmark privacy regulation set to go into effect soon, governs how companies can use consumer information and assigns the hefty fines associated for mismanagement.

It will be an interesting two years as UK-EU Brexit negotiations continue and the policies of the new UK Department of International Trade go into effect.




POSTED IN: Madrona News

M87 – A New Wireless Infrastructure Company Comes to Seattle

The wireless infrastructure industry in the Pacific NW has a long history – from McCaw to AT&T Wireless to T-Mobile.  Madrona is very excited to be announcing our investment in M87 which provides better connectivity over existing infrastructure to wireless consumers, infrastructure providers and app developers. This company brings together technology that is crucial as data on our wireless infrastructure increases 50% annually, with a team that is deep on technology and business leadership.  Cole Brodman, who has over 25 years of wireless experience, much of it right here at T-Mobile, is also joining the company today as CEO.  Cole is someone we have worked with over the last several years and we are excited to be backing a company he is behind.

M87’s technology focuses on the edge of the network.  The idea of ‘edge networks’ is not new, early content distribution networks (CDNs) like Akamai started putting edge nodes at internet points of presence in 1998 in order to move content closer to end-users.  We built a related system of audio/video streaming splitters in the same era at RealNetworks to exploit the multiplier effect of shared infrastructure and improve network performance.

Today’s mobile devices offer the ability to move the ‘edge of the network’ all the way to the end-user.   Technologies such as Wifi Direct and LTE, which the majority of the world’s 4B+ mobile phones use, enable end points to redistribute content back into the network.   M87’s technology taps into this ability and liberates an incredible array of new applications around industrial and consumer IoT, messaging and retail, presence awareness and instant connectivity.  Two thirds of all US internet traffic is now mobile.  Outside the US, the dominance of mobile networks, rather than terrestrial based internet, creates even more opportunity to improve networks and applications as emerging markets invest in new ways to expand coverage.

I’m most excited about the team and Seattle story M87 represents.  Vidur Bhargava founded the company based on his research at the University of Texas and he partnered early with David Hampton who has terrific public wifi experience from his leadership of Wayport.  They share Texas roots with M87 CEO Cole Brodman who moved to Seattle 21 years ago as an early product leader for Western Wireless.  As CTO Cole led what became T-Mobile to more than 30M subscribers.  Collectively, the m87 team has an exciting blend of experience and capabilities and we are fortunate that they are moving the company to Seattle.  We will struggle to compete with their famous ‘BBQ’ but let’s welcome them to the world of coffee, a little rain and a great startup ecosystem.

And as a note the company’s name, M87, refers to one of the largest galaxies in our universe, Messier 87 that is one of the brightest sources of radio waves.

POSTED IN: Madrona News

Why We Invested in Heptio

We could not be more excited to be investing in Heptio.  Heptio is aiming to become the Kubernetes company and is founded by two of the creators of Kubernetes at Google, Craig McLuckie and Joe Beda.  Specifically, Kubernetes is the leading open source cluster manager for containers; but, broadly, we feel Kubernetes is a core technology that is changing how IT in enterprises works.  Joe and Craig are two world class entrepreneurs who have the technological expertise, the industry and customer relationships, and the leadership and respect of the Kubernetes community necessary to build a massively successful business in this field. Heptio also represents an investment in one of the biggest themes Madrona has been tracking over the past several years:  the move to “Cloud Native.”

Over the past decade plus, we have seen enterprises steadily evolve towards a cloud native world.

Over the past decade plus, we have seen enterprises steadily evolve towards a cloud native world.  This movement began with application workloads moving from operating systems running on bare metal servers to virtual machines running on hypervisors, primarily to reduce cost by consolidating hardware.  Then we saw the move of these virtual machines into the cloud to greatly increase operational agility and further reduce cost.  This enormous move (of which we are still in the relatively early innings), led first by Amazon Web Services as well as Microsoft Azure, turned Seattle into the Cloud Capital of the world.  While much of this move to the cloud has meant migrating from on-premise to a public cloud infrastructure, enterprises have also altered their approach to internal infrastructure and created private clouds to capture many of the same advantages of the public cloud. This brings us to cloud native – the current wave of the cloud evolution that is really a combination of technologies, practices and culture.

The cloud native technological shifts that are occurring are accelerating adoption of containers (usually replacing VM’s but also running inside them) and application architectures moving to distributed microservices.  All of this requires a different approach to working and managing resources, often referred to as DevOps, but perhaps better described as “cloud native ops.”  The advantages of this approach are many:  further reduced cost and complexity, greater developer productivity, easier to manage and scale applications, and better performance – all without sacrificing security.  Now, as containers and microservices proliferate, managing them and the server clusters they run on at scale has created new challenges.  Thus, Madrona and many VC investors have been hunting for and investing in companies that make it easier to orchestrate, network, secure, monitor, and attach storage to container-based, microservice architectures.

However, orchestration and management are the most strategic capabilities needed by enterprises for these container-based, cloud native environments.  Docker is a company that has become one of the better known names in IT because of their container technology and its widespread popularity with developers.  Now Docker is also offering and attempting to monetize their orchestration software.  Google has been the leader in developing and managing container-based applications and infrastructure far longer than Docker.  In February 2015, Google released Kubernetes as an enterprise-friendly open source project that encapsulated a decade of experience building their internal container-based cluster management system called Borg, which is the core of how Google manages their datacenters. Then in July 2015 when Kubernetes hit version 1.0, Google donated control of the project to the Cloud Native Computing Foundation.  While everyone in this industry knows Docker and has heard of Kubernetes, what you might not know is that Kubernetes is now the most active project on Github.

Further, the most popular way to manage and orchestrate Docker containers is not actually Docker.  It’s Kubernetes.  While many chapters in this story certainly remain to be written, we feel that Kubernetes is the key platform technology for this continuing evolution to cloud native and is on a path to be the default management system for this new way of computing.  This is a hugely valuable opportunity, and Heptio can be the go-to partner for cloud native enterprise IT transformation.

We feel that Kubernetes is the key platform technology for this continuing evolution to cloud native and is on a path to be the default management system for this new way of computing.

In the world of start-ups, it’s not enough to just have a great idea and a big market.  You have to have the right team.  And Craig and Joe are literally the best team in the world to go after this opportunity.  As Kubernetes co-creators here in Google’s Seattle offices, they understand the space inside and out, know and are known by the Kubernetes open source community, and have a deep appreciation for the users of Kubernetes and the challenges faced by enterprise customers in adopting this technology.  You could say that the founders of Kubernetes are carrying on the mission as a stand-alone company.

While Kubernetes has become very popular, it is still too difficult to get up and running.  Companies also have nowhere to turn to get enterprise-level support, which is a necessity for broad corporate IT adoption.  Heptio will provide this commercial support, while also building on the open source base to improve usability, installation, and eventually adding and extending Kubernetes features and functionality.  They will do this in a way that supports the existing ecosystem, not competes with it.  Over time, we think Heptio can become a centerpiece for how companies develop and operate software.

We are also pleased to be partnering with Ping Li from Accel, who led the investment round, in our support of Heptio.

At Madrona, we aim to invest in the best entrepreneurs attacking the biggest markets in the Pacific NW, who have the opportunity and ambition to build long-term, standalone businesses. We feel that Heptio can be the next iconic cloud company based here in Seattle, and we are excited to help Craig and Joe along this journey.




POSTED IN: Madrona News