News & Views


Madrona Continues Hiring Spree with Trilogy Veteran Katie Drucker and Former Avvo CEO Mark Britton

POSTED IN: Portfolio Company News

Madrona Welcomes Katie Drucker and Mark Britton to the Team

Today, Madrona announced the hiring of technology entrepreneur, investor, and advisor, Katie Drucker, to head the industry and business development relationships and partnerships for Madrona and its portfolio of companies. Relationships, whether they be customer or partner, are crucial for companies at all stages. Recognizing this Madrona has built programs such as an annual CIO summit, CIO briefing days and regular tech meetups that bring enterprises and startups together. Katie will operationalize Madrona’s ability to create strategic relationships that move the needle for portfolio companies as they drive revenue, customer growth, and build market fit.

As the Head of Business Development and Partnerships, Katie brings a global and Seattle-based approach and network to building meaningful relationships with both corporate and governmental organizations looking to be on the cutting edge of technology innovation. Her role will include deepening and expanding of Madrona’s network of senior execs, advising companies on partnership strategies, and building deep customer relationships – all designed to enhance customer and partner engagement programs for Madrona’s portfolio.

Katie brings a career of building partnerships and creating networks at the highest levels as a founder, CEO and COO of technology-based startups in SaaS and cyber security and six years as an investor at Trilogy Equity where she sourced deals, served on boards, and developed strategic relationships. Within this role Katie led deals focused on the mobile industry, helped source and recruit talent, and led investments and follow on rounds for early stage companies. Most recently she was the Managing Partner at Cascade Target Group, a business development and consulting company focused on elevating technology startups to government agencies. Prior to Cascade, Katie was co-founder and CEO at Sigby/Protemo and COO of PolyVerse, where she led fundraising, shipped products, and drove business development and ecosystem creation. She is excited to focus in developing the tech ecosystem that surrounds Madrona and its portfolio companies, driving new opportunities and value for all stakeholders.

Mark Britton joined Madrona in early 2019 as a Strategic Director. As a long-time fixture in the Seattle technology scene for his perseverance and leadership of Avvo, Mark brings a point of view to Madrona built over a career of company building one of the landmark Seattle companies. Starting life as an SEC lawyer, Mark quickly discovered the entrepreneurial bug and founded Avvo in 2006, a marketplace to provide regular people with information and access to legal counsel. The company raised $132 million and was acquired by Internet Brands in January of 2018. Mark left Avvo in April to explore his next steps and we are excited that part of that step is working with Madrona and our portfolio companies.

Strategic Directors are established operators who work with the Madrona team as we evaluate investment thesis and specific companies, while also sharing their incredible wealth of knowledge with Madrona’s portfolio companies. Other recently appointed Strategic Directors at Madrona are Steve Singh, Betsy Sutter, Sujal Patel and John McAdam.

“As Madrona builds our team to support Seattle entrepreneurs we couldn’t be more excited to have Katie and Mark on board. We are excited to have Katie bring her drive and network to play an integral role with all of our companies as they work with us leading up to and after funding. We spend intense time with our companies, focused on adding value to them and their team from day one to the long run through their entire journey and go-to-market know-how and partnerships are incredibly valuable to companies of all sizes,” commented S. Somasegar. “Mark is an insightful leader and we are excited to have him on board to share his knowledge and experience of company building through economic ups and downs with us and with our portfolio companies. Having these two leaders on board illustrates our strong passion and capability to continue to deliver for our founders and companies. Welcome to both of them to the Madrona family.”

POSTED IN: Madrona News Debuts Edge AI That Runs on Solar Power

POSTED IN: Portfolio Company News

Welcoming Polly to the Madrona Family

Today, we are thrilled to announce our Series A investment in Polly, a company we believe is going to significantly impact how enterprises get work done and measure success.  We led this $7 million round and were joined with the existing seed investors Amplify Partners, Fathom Capital, and the Slack Fund.

We have known Samir and Bilal, the co-founders of Polly, since the 2016 Seattle TechStars class, when we had them into our offices to give a practice demo run.  We were excited about them then and have followed the progress as the company has graduated from delivering chatbots into the rich world of enterprise collaboration. Samir and Bilal have built a great team here in Seattle and they are passionate about delivering a quality experience to their customers – these customers, from individual developers to large enterprises are focused on being more successful and understanding their workflows better.  Polly’s success over the last year has been impressive and we are excited that they have decided to partner with us for the journey ahead.

Our investment in Polly follows from our core thesis that, enterprise workflows, for the most part, will move away from legacy systems and email to modern online collaborations platforms like Slack, Teams and Mattermost. While these platforms started their lives as messaging tools, they now have the opportunity to become the “operating system” for modern enterprise workflows. That is already happening. Forward-looking organizations are creating Slack teams whose mandate is to adopt and/or build applications to enable enterprise workflows on Slack.

This is driven by the following.

First, due to technology and societal changes, the nature of engagement between an enterprise and its key constituents (customers, employees and other stakeholders) is becoming more open, bi-directional and frequent.

Second, decision-making in a modern enterprise is becoming far more decentralized. Employees at every level are empowered to directly collect and analyze data in order to make decisions and be far more responsive than it was ever possible before.

Third, as a result, the collaboration tools are where enterprise work happens. We are already seeing early evidence of that with workflows such as IT support, employee on-boarding, site reliability engineering, cyber security operations, etc. moving to Slack/Teams and multiple startups building specific products for each.

As enterprise workflows move to collaboration tools, measuring the effectiveness of those workflows — so that those could be analyzed and further improved — becomes critically important. That is exactly what Polly enables. Polly enables organizations to collect and understand feedback from key constituents so that enterprises can measure and optimize their workflows and thereby, deliver a much better experience.

The early signs have been extremely encouraging! The adoption of the free Polly product, which enables simple surveys within Slack and Teams, has grown consistently over the last couple of years and Polly tripled their user base in 2018. More interestingly, the team has seen incredible ramps in use at large enterprises and the adoption of Polly’s Enterprise product just since launch in in the fall of 2018 has been very strong.  The company already has hundreds of paying enterprise customers with many others in the pipeline. The combination of the rapid organic adoption of the free product, strong inbound demand of its enterprise product and a team passionate about helping their customers, fuels our belief that Polly is poised to become the go to product for modern enterprises.

We are excited and buckled up for the fun ride ahead!

POSTED IN: Madrona News

The Remaking of Enterprise Infrastructure – Investment Themes For Next Generation Cloud

Enterprise infrastructure has been one of the foundational investment themes here at Madrona since the inception of the firm. From the likes of Isilon to Qumulo, Igneous, Tier 3, and to Heptio, Snowflake and Datacoral more recently, we have been fortunate to partner with world-class founders who have reinvented and redefined enterprise infrastructure.

For the past several years, with enterprises rapidly adopting cloud and open source software, we have primarily focused on cloud-native technologies and developer-focused services that have enabled the move to cloud. We invested in categories like containerization, orchestration, and CI/CD that have now considerably matured. Looking ahead, with cloud adoption entering the middle innings but with technologies such as Machine Learning truly coming into play and cloud native innovation continuing at a dizzying pace, we believe that enterprise infrastructure is going to get reinvented yet again. Infrastructure, as we know it today, will look very different in the next decade. It will become much more application-centric, abstracted – maybe even fully automated – with specialized hardware often available to address the needs of next-generation applications.

As we wrote in our recent post describing Madrona’s overall investment themes for 2019, this continued evolution of next-generation cloud infrastructure remains the foundational layer of the innovation stack against which we primarily invest. In this piece, we go deeper into the categories that we see ourselves spending the most time, energy and dollars over the next several years.  While these categories are arranged primarily from a technology trend standpoint (as illustrated in the graphic above), they also align with where we anticipate the greatest customer needs for cost, performance, agility, simplification, usability, and enterprise-ready features.

Management of cloud-native applications across hybrid infrastructure

2018 was undeniably the year of “hybrid cloud.” AWS announced Outposts, Google released GKE On-Prem and Microsoft beefed up Azure Stack (first announced in late 2017). The top cloud providers officially recognized that not every workload will move to the cloud and that the cloud will need to go to those workloads. However, while not all computing will move to public clouds, we firmly believe that all computing will eventually follow a cloud model, offering automation, portability and reliability at scale across public clouds, on-prem and every hybrid variation in between.

In this “hybrid cloud forever” world businesses want more than just the ability to move workloads between environments. They want consistent experiences so that they can develop their applications once and run anywhere with complete visibility, security and reliability — and have a single playbook for all environments.

This leads to opportunities in the following areas:

  • Monitoring and observability: As more and more cloud-native applications are deployed in hybrid environments, enterprises will demand complete monitoring and observability to know exactly how their applications are running.  The key will be to offer a “single pane of glass” (complete with management) across multiple clouds and hybrid environments, thereby building a moat against the “consoles” offered by each public cloud provider. More importantly, the next-generation monitoring tools will need to be intelligent in applying Machine Learning to monitor and detect – potentially even remediate – error conditions for applications running across complex, distributed and diverse infrastructures.
  • SRE for the masses: According to Joe Beda, the co-founder of Heptio, “DevOps is a cultural shift whereby developers are aware of how their applications are run in a production environment and the operations folks are aware and empowered to know how the application works so that they can actively play a part in making the application more reliable.”  The “operations” side of the equation is best exemplified by Google’s highly trained (and compensated) Site Reliability Engineers (SRE’s). As cloud adoption further matures, we believe that other enterprises will begin to embrace the SRE model but will be unable to attract or retain Google SRE level talent. Thus, there will be a need for tools that simplify and automate this role and help enterprise IT teams become Google-like operators with the performance, scalability and availability demanded by enterprise applications.
  • Security, compliance and policy management: Cloud, where enterprises lose total control over the underlying infrastructure, places unique security demands on cloud-native applications. Security ceases to be an afterthought – it now must be designed into applications from the beginning, and applications must be operated with the security posture front and center. This has created a new category of cloud native security companies that are continuing to grow. Current examples include portfolio company, Tigera, which has become the leader in network security for Kubernetes environments, and container security companies like Aqua, StackRox and Twistlock.  In addition, data management and compliance – not just for data at rest but also for data in motion between distributed services and infrastructures – create a major pain point for CIOs and CSOs. Integris addresses the significant associated privacy considerations, partly fueled by GDPR and its clones. The holy grail is to analyze data without compromising privacy. Technologies such as security enclaves and blockchains are also enabling interesting opportunities in this space and we expect to see more.
  • Microservices management and service mesh: With applications increasingly becoming distributed, open source projects such as Istio (Google) and Envoy (Lyft) have emerged to help address the great need to efficiently connect and discover microservices. While Envoy has seen relatively wide adoption, it has acted predominantly as an enabler for other services and businesses such as monitoring and security.  With next-generation applications expected to leverage the best-in-class services, regardless of which cloud/on-prem/hybrid infrastructure they are run on, we see an opportunity to provide a uniform way to connect, secure, manage and discover microservices (run in a hybrid environment).
  • Streams processing: Customers are awash in data and events from across these hybrid environments including data from server logs, network wire data, sensors and IoT devices.  Modern applications need to be able to handle the breadth and volume of data efficiently while delivering new real time capabilities.  The area of streams processing is one of the most important areas of the application stack enabling developers to unlock the value in these sources of data in real time. We see fragmentation in the market across various approaches (Flink, Spark, Storm, Heron, etc.) and an opportunity for convergence. We will continue to watch this area to understand whether a differentiated company could be created.

Abstraction and automation of infrastructure

While containerization and all of the other CNCF projects promised simplification of dev and ops, the reality has turned out to be quite different. In order to develop, deploy and manage a distributed application today, both dev and ops teams need to be experts in a myriad of different tools, all the way from version control, orchestration systems, CI/CD tools, databases, to monitoring, security, etc. The increasingly crowded CNCF roadmap is a good reflection of that growing complexity.  CNCF’s flagship conference, Kubecon, was hosted in Seattle in December and illustrated both the interest in cloud native technologies (attendees grew 8x since 2016 to over 8,000) as well as the need for increased usability, scalability, and help moving from experimentation to production.  As a result, in the next few years, we anticipate that an opposite trend will take effect. We expect infrastructure to become far more “abstracted,” allowing developers to focus on code and letting the “machine” take care of all the nitty gritty of running infrastructure at scale. Specifically, we think opportunities are becoming available in the following areas:

  • Serverless becomes mainstream: For way too long, applications (and thereby developers) have remained captive of the legacy infrastructure stack in which applications were designed to conform to the infrastructure and not the other way around. Serverless, first introduced by AWS Lambda, broke that mold. It allowed developers to run applications without having to worry about infrastructure and to combine their own code with best-in-class services from others. While this has created a different concern for enterprises – applications architected to use Lambda can be difficult to port elsewhere – the benefits of serverless, in particular rapid product experimentation and cost, will compel a significant portion of the cloud workloads to adopt it. We firmly believe that we are at the very beginning of serverless adoption and we expect to see a lot more opportunities in this space to further facilitate serverless apps across infrastructure, similar to (toolkit for building serverless apps on any platform) and IOpipe (monitoring for serverless apps).
  • Infrastructure backend as code: The complexity of building distributed applications often far exceeds the complexity of the app’s core design and wastes valuable development time and budget. For every app,  a developer wants to build, s/he ends up writing the same low-level distributed systems code again and again. We believe that will change and that the distributed systems backend will be automatically created and optimized for each app. Companies like Pulumi and projects like Dark are already great examples of this need.
  • Fully autonomous infrastructure: Automating management of systems has been the holy grail since the advent of enterprise computing. However, with the availability of “infinite” compute (in the cloud), telemetry data, and mature ML/AI technology, we anticipate significant progress towards the vision of fully autonomous infrastructure. Even in the case of cloud services, many complex configuration and management choices need be made to optimize the performance and costs of several infrastructure categories.  These choices range from capacity management in a broad range of workloads to more complex decisions in specific workloads such as databases.  In databases, for example, there has been some very promising research done on applying machine learning to basic configuration all the way to index maintenance. We believe there are exciting capabilities to be built and potentially new companies to be grown in this area.

Specialized infrastructure

Finally, we believe that specialized infrastructure will make a comeback to keep up with the demands of next-general application workloads. We expect to see that in both hardware and software.

  • Specialized hardware: While ML workloads continue to proliferate and general-purpose CPUs (and even GPUs) struggle to keep up, new specialized hardware has arrived from Google’s TPUs to Amazon’s new Inferentia chips in the cloud. Microsoft Azure also now offers FPGA-based acceleration for ML workloads while AWS offers FPGA accelerators that other companies can build upon – a notable example being the FPGA-based genomics acceleration built by Edico Genome. While we are unlikely to invest in a pure hardware company, we do believe that the availability of specialized hardware in the cloud will enable a variety of new investable applications involving rich media, medical imaging, genomic information, etc. that were not possible until recently. 
  • Hardware-optimized software: With ML coming to every edge device – sensors, cameras, cars, robots, etc. – we believe that there is an enormous opportunity to optimize and run models on hardware endpoints with constrained compute, power and/or bandwidth., for example, optimizes ML models to run on resource-constrained edge devices.  More broadly, we envision opportunities for software-defined hardware and open source hardware designs (such as RISC-V) that enable hardware to be rapidly configured specifically for various applications.

Open Source Everywhere

For every trend in enterprise infrastructure, we believe that open source will continue to be the predominant delivery and license mechanism.  The associated business model will most likely include a proprietary enterprise product built around an open core, or a hosted service where the provider runs the open source as a service and charges for usage.

Our own yardstick for investing in open source-based companies remains the same. We look for companies based around projects that can make a single developer look like a “hero” by making her/him successful at some important task. We expect the developer mindshare for a given open source project to be reflected in metrics such as Github stars, growth in monthly downloads, etc. A successful business then can be created around that open source project to provide the capabilities that a team of developers and eventually an enterprise would need and pay for.


These categories are the “blueprints” we have in our minds as we look for the next billion-dollar business in the enterprise infrastructure category. Those blueprints, however, are by no means exhaustive. The best founders always surprise us by their ability to look ahead and predict where the world is going, before anyone else does. So, while this post describes some of the infrastructure themes we are interested in at Madrona, we are not exclusively thesis-driven.  We are primarily founder driven; but we also believe that having a thoughtful point of view about the trends driving the industry – while being humble, curious and open-minded about opportunities we have not thought as deeply about – will enable us to partner with and help the next generation of successful entrepreneurs.  So, if you have further thoughts on these themes, or especially are thinking about building a new company in any of these areas, please reach out to us!

Current or previous Madrona Venture Group portfolio companies mentioned in this blog post: Datacoral, Heptio, Igneous, Integris, IOpipe, Isilon, Pulumi, Qumulo, Snowflake, Tier 3, Tigera and

POSTED IN: Madrona News

Echodyne Seeks Thumbs-up From FCC For Super Bowl Test of Drone-detecting Radar

POSTED IN: Portfolio Company News Lands Redfin As An Investor And Potential Partner In $33M Round

POSTED IN: Portfolio Company News

New Positions and Faces at Madrona

From left to right: Troy Cichos, Jennifer Chambers, Tasha Tieu, Ted Kummert. January 2019.

Recognizing the achievements of employees and the expanding footprint of the firm, Madrona today announced a set of changes to the core team that administers and operates the day to day business of the firm.  Additionally, the firm expanded Venture Partner Ted Kummert’s role to include Chief Product Officer in Residence.

Also announced today that Hope Cochran became Managing Director.

In the administrative team, Troy Cichos was promoted to COO and Partner, and Jennifer Chambers was promoted to Administrative Partner. The firm also welcomes a new Controller, Tasha Tieu.

Running a venture firm with nearly $1.6 billion under management is no small feat.  With five active funds, a staff of 35 including a value-add team and a full administrative assistant cohort, Madrona’s administrative team has taken on bigger and bigger roles over the past several years.

Troy Cichos joined Madrona in 1999 and was most recently Administrative Partner and CFO.  Over the past twenty years, Troy has provided the firm with exemplary guidance as the firm has consistently raised funds, invested in companies, expanded in staff, facilities and founded new entities such as Madrona Venture Labs and Create33.  As COO, Troy manages all legal, HR, IR, Tax/Audit for the firm and for Madrona’s venture funds.  He manages the team of value-add staff and back office administrators and advises Madrona’s companies on financial management, tax, and legal issues.  His role encompasses all operations of the firm.

“Troy brings a unique mix of subject-matter expertise, operational excellence, great people skills, and a love for Madrona and all our constituents.  His leadership and counsel is indispensable to our firm and portfolio companies in areas from structuring deal documents, advising on tax strategy, consulting on leases and real estate questions, working with our investors, and providing leadership for all our firm’s operations.  Troy always brings his A game and is a constant positive presence in the office and with all the important partners we work with to help our companies and support the Seattle ecosystem,”  Tim Porter, Managing Director.

Jennifer Chambers joined Madrona in 1997 and as Administrative Partner works on both fund and Madrona office management.  During her time at Madrona, she built and scaled the back office to accommodate the growth of Madrona’s funds, portfolio, team and facilities.  As part of the value-add team she assists Madrona portfolio companies with the decisions and vendors they need to successfully set up their own back office – everything from choosing a benefits provider to finding office space.    She works with Madrona’s investors as part of the fund management, both distributing and calling capital as needed in the life of a fund and planning and managing the content of our quarterly and annual meetings.  Additionally, she manages a team of administrative assistants and Madrona facilities. Jennifer’s prior title was Fund Administrator.

“Jennifer has been a crucial piece to the success of Madrona.  There are very few if any aspects of Madrona that Jennifer does not regularly influence and she sets the tone for Madrona’s culture with her contagious positive attitude,” Paul Goodrich, Managing Director.

Tasha Tieu joined Madrona in late 2018 as a controller focused on accounting, tax and audit functions for both Madrona and Madrona’s venture funds.  She comes to Madrona from four years working in audit with technology and retail clients at EY.  Tasha holds a Bachelor of Arts in Business Administration and Master’s in Professional Accounting from the University of Washington Michael G. Foster Business School. Tasha is also a Certified Public Accountant in the state of Washington.

Venture Partner Ted Kummert is excited to expand his role to Chief Product Officer in Residence.  In this role, he works deeply with Madrona’s growing startups who are facing product, business or engineering challenges that require some hands on, in the trenches work.

Building on his over two decades at Microsoft leading the development of several of that company’s core enterprise products, Ted also spent four years at then Madrona portfolio company, Apptio, leading the transformation and creation of SaaS solutions for enterprise and federal CIOs and CFOs based on the company’s core platform.  Apptio went public during his tenure and was recently acquired by Vista Equity Partners for ~$2billion.

Ted applies this and his years of management experience to work closely and, for extended periods of time, with engineering and management teams of Madrona portfolio companies in the early and growth stages to help navigate some of the difficult decisions they face as their business, product offerings and organizations grow and scale.  Continuing to serve as a Venture Partner as well, Ted will also work on identifying, vetting and making new investments.

Kristina Bergman, Founder and CEO of Integris Software commented, “Ted has been an invaluable partner for our management and engineering team as we help companies comply with new data privacy laws, such as GDPR and CCPA – map data, apply policies, and automate remediation. Building for enterprises, especially in a heavily regulated area is a complex task and Ted’s years of experience helped us execute and build a highly scalable distributed solution for Data Privacy Automation that is being adopted by global brands to protect their most important assets.”

POSTED IN: Madrona News

My Next Role – Managing Director at Madrona

Hope Cochran and Amy Nelson, Founder and CEO of The Riveter. March 2018.

I am so honored and excited to be expanding my role with the Madrona team. I have long admired Madrona, not only for their sustained excellence in investing in local NW companies, but for their well-earned reputation for doing so with intellectual rigor, hard-work and integrity. And when I joined the firm as a Venture Partner two years ago, I found that the Madrona reputation is built through careful attention to the needs of entrepreneurs. That is why I am proud to be deepening my relationship with Madrona as a Managing Director. It marks the beginning of a new professional adventure, one in which I plan to lean heavily upon my own experiences as an entrepreneur and CFO as I work directly with our companies.

People, first and foremost, will continue to be my overriding focus. Having been a founder and executive in both small and large companies, I understand what it’s like to create business plans, navigate tricky financings and launch new products and services; but as I reflect upon my own successes and failures in business, what is most impactful is the quality of the people within each venture. I understand the importance of surrounding yourself with talented and driven personalities who are comfortable in periods of tumultuous change, who keep calm and focused in times of crisis or extreme growth. The stresses and strains of being an entrepreneur can be very challenging day-to-day, but the rewards are worth the challenges. The most important of which has been the life-long relationships I have with the people from my previous companies, relationships that have been forged from periods of intense joy, frustration, success and failure. I’m looking forward to investing in NW entrepreneurs who are eager and ready for a similar ride. So as I develop my investment thesis while at Madrona, it will always start, and stop, with identifying great people and teams regardless of industry or technology. In my opinion, successful teams and leaders are the most important factor in any venture.

So what am I looking for in new ventures besides great entrepreneurs? I will obviously rely heavily on my past experiences. I have worked in several technology-based industries during my career as an entrepreneur and executive—ERP, B2B software (PeopleSoft/Oracle), telecom and wireless (Clearwire/Sprint) and most recently, video games (King Digital/Activision). In addition, I am on the Board and Audit committees for a diverse set of public companies  – MongoDB, Hasbro and New Relic. All these experiences and roles will inform my analysis as I add to the Madrona portfolio with new investments. As I have led companies through period of rapid change, there have been several areas that always seem to need attention and improvement.

When a company grows quickly, processes often break under the strain. Having been an executive at companies that experience very rapid growth, I understand and appreciate that the systems and processes required to build a sustainable company must be flexible, scalable and easy to roll-out. Therefore, I am interested in cloud-based B2B systems and software that enable companies to be more nimble as they manage their internal and external processes. Legacy solutions that are inflexible and hard-to-upgrade just don’t work anymore. Furthermore, there is a great need for ML/AI and robotic automation processing to improve various internal processes within organizations. Every department within an organization, from tasks as varied as financial forecasting to determining efficient locations for holding inventory, can be improved with thoughtful application of technology.

In the role of CFO, you often realize that your best forecast, or most consistently produced dashboard is only as good as the data that sits below it (customer, inventory, financial, sales, etc.). How many times was I proud of my finance team’s ability to produce metrics, only to realize that the data behind it wasn’t being stored or sorted accurately?!  Today, a company needs to be able to make instant decisions, based on trends and patterns they read in real time. The ease and speed of access, the cleanliness, consistency, analysis and protection of underlying corporate data is crucial.

Finally, CFOs ultimately deal with the money, so this is an area where I have my own bumps and bruises from first-hand experience. Banks come to you with promises of ease of use, the ability to quickly move money, invest it wisely, low fees, etc.  But all CFOs know, this is an area of great frustration.  It often comes with multiple fees, low yields and difficulty in managing across multiple institutions and regions. On a consumer level the problem is only magnified and often misunderstood by the individual user. There are a lot of burgeoning Fintech companies out there tackling many of these problems, but there is much to be done. As you watch the flow of funds from the point of a consumer or a business, it is astonishing how much margin is taken at each juncture – whether it be fees, the days lost in the movement, currency exchanges, credit card processing, etc.  I love the innovation that is happening in this space – both at the level of large scale corporate clients to the individual consumer and look forward to finding and supporting companies that are diving into this challenge

It can’t be ignored that I am a woman executive and investor in a largely male world. I have loved my career but at times I have had to fight for it. It is a joy and passion of mine to support women to thrive in all ranks of a corporation. It is not an issue of not enough female talent in the workforce. I hear that counter-argument all the time and I am amazed that some believe this to be true – have they met the women I know?!

Businesses today can and are starting the journey to recognize the untapped talent they have in their diverse workforce. It needs intentionality. In my experience, it is not going to happen by being passive. I applaud companies and other organizations that are taking intentional steps to address equality in all areas of a company.  And, I am a staunch believer that businesses today should be active in addressing equality of opportunity throughout their organizations, from boardroom and C suite and at every level and department.

Madrona has been a leader in working for greater equality at our companies. Over the past two years, I have led Madrona’s participation and support of OnBoarding Women, with our partners at Deloitte, Perkins Coie and Spencer Stuart. OnBoarding Women is focused on creating more opportunities for women to serve on corporate boards in the Pacific Northwest. At Madrona, we recognize that the disparity in the public company boardroom often starts when the company is private and the board is primarily investors – often not a very diverse group. By opening up independent seats early in a company’s journey, the company has the opportunity to diversify the perspective at a crucial point in the company lifecycle, ideally with a woman or otherwise diverse candidate.  One of my fellow managing directors has had 5 of the last 6 independent director appointments on his portfolio company boards be women.

As I embark on the next phase of my career, I am so honored to be part of the Madrona team.  My most important asset as a professional is my reputation. A reputation is shaped by the people with whom you surround yourself. I couldn’t ask to be surrounded by a more fantastic group than the entire Madrona team.

POSTED IN: Madrona News

Madrona Appoints Hope Cochran Managing Director

Madrona Managing Directors, from left to right: Tom Alberg, S. Somasegar, Scott Jacobson, Matt McIlwain, Tim Porter, Hope Cochran, Len Jordan (missing from photo: Paul Goodrich). January 2019.

We are excited to announce today that Hope Cochran is our newest Managing Director.  We have worked with Hope in her role as a venture partner at Madrona over the last two years and have known her for many more.  In the time she has been a Venture Partner at Madrona, Hope has worked with dozens of our companies on business strategies, financial planning and operational effectiveness.  Hope has built her extensive experience over twenty-five years as a founder of her own successful company, as a CFO at both Clearwire and King Digital, as an executive taking companies public and then selling them for billions to strategic buyers, and as a senior leader who brought teams together to achieve a goal. Her clarity of approach and expertise in not only how to financially organize a company, but in how to lead one, has been invaluable to our entrepreneurs and founders.

As a Managing Director, Hope shares the responsibility of investing Madrona’s newest $300 million Fund VII in early stage companies that we believe will change the future of Seattle and the global technology industry.  When we shared the news of Hope’s new role with our mutual, long-time friend John Stanton, he commented that “I worked closely with Hope for five years at Clearwire.  In a very challenging environment, Hope was a consistent and calm leader with clear vision.  Hope managed the complexity of Clearwire’s financial position and was vital in every strategic decision.  Hope’s experience in managing people and leading a business will make her an extremely valuable Managing Director at Madrona.”

Hope brings both a bold and practical approach to working with companies.  She has already been of invaluable help to the whole innovation ecosystem by leading our annual CFO Summit to address everything from broad themes of leadership and to details of audit rules.  In fact, before Hope worked at Madrona, she shared her experience of taking King Digital from 0-60 and onto the public markets at one of our CFO conferences.  She has helped portfolio companies of all sizes including later stage Madrona’s portfolio companies like Smartsheet and Rover on their growth and IPO planning, and some of our youngest companies like Gawkbox and Integris through the building and scaling of teams and processes.  Her ability to scale up or down and understand the operational challenges of the entrepreneur, is what they value.   She is a trusted member of our team and a sought-after voice of counsel.

Hope helped source and led Madrona’s seed investment in the Riveter, the female forward work space and community with five locations thatwill be expanding to more locations this year.  Since our initial seed investment, the Riveter has already raised a substantial follow-on upround financing bringing its total capital raised to $20 million.  She has also led our involvement in the OnBoarding Women program, which focuses on bringing executive women onto public and private company boards through business-oriented education.  For several years now, Madrona companies have been more intentional about recruiting female candidates as independent board members and our work with OBW is invaluable to these candidates and these companies.

To Madrona she has brought her deep operational experience and also her depth of experience serving on public company boards, including New Relic, MongoDB and Hasbro.  It is clear that she is a leader in our region, and we are thrilled to have her focused on uncovering the next great companies being built in Seattle.

We also want to celebrate that Hope is Madrona’s first woman Managing Director.  As investors, we seek to attract the best entrepreneurs and the best company-building team that are eager to roll up their sleeves to help companies when they need us. Having an investment team that is diverse in terms of experience, expertise, company background, gender, age, culture, and points of view enables us to build better companies faster.   We are excited to have Hope on board and look forward to years of investing and working with companies from day one for the long run including all the key decision moments along the journey.

For Hope’s take click here.

POSTED IN: Madrona News

Tigera Raises $30M Series B For Its Kubernetes Security And Compliance Platform

POSTED IN: Portfolio Company News

The Riveter, A Female-centric Coworking Startup, Raises $20 Million

POSTED IN: Portfolio Company News

Eclypsium Raises $8.75M Series A Round Led By Madrona Venture Group To Tackle Hardware Security

POSTED IN: Portfolio Company News

Welcome Eclypsium – Creating and Leading the Next Major Security Market – Firmware Protection

At Madrona, we look for exceptional founders attacking big markets.  Today, we are thrilled to announce our Series A investment in Eclypsium, the industry’s first enterprise firmware and hardware security platform. We couldn’t be more excited to lead another investment in a phenomenal Oregon-based team and join forces with returning investors Andreessen Horowitz and Intel Capital. Our investment in security has been enterprise focused – with Tigera, ExtraHop and the recently acquired Icebrg – and we are always on the lookout for unique approaches to this ongoing issue in modern computing.

Firmware is in every device in the modern enterprise – from end-user devices like mobile phones and laptops, to the servers, switches, and networking infrastructure that power data centers and networks globally. Exploits at the firmware or hardware level can have the worst possible consequences:  attackers can “own” the machine and wiping/re-imaging may not get rid of the threat. Historically, the sophistication required to implement this type of attack made them relatively rare.  In recent years, however, organized cybercrime and nation-states have provided the necessary funding and talent to make hardware exploits a reality.  More recently, firmware attacks have become pervasive and persistent  for certain industries; and they have the ability to permeate and compromise entire data centers, remaining undetected on thousands of devices. A wave of new attacks like the recent supply chain compromises or the LoJax UEFI exploit have clearly shown that organizations can no longer afford to rely on “security by obscurity” when it comes to their hardware.  While the alleged Super Micro brouhaha is a bit of a different beast (and we were already well into discussions with Eclypsium when the story broke), it still illustrates the high-stakes nature of hardware and firmware-related exploits.

We were fortunate to be introduced to Eclypsium’s co-founder and CEO Yuriy Bulygin in the summer of 2017 by Will Peteroy from Icebrg (Madrona portfolio company acquired by Gigamon) and Drew Smith from the Oregon Venture Fund. We were instantly impressed by Yuriy’s deep firmware security expertise, passion for solving some of the hardest security problems and ability to build a world-class team of experts. We knew that the market for endpoint and data center security is massive with over $15B in spending combined, with hundreds of vendors offing a variety of solutions.   All of the existing solutions, however, address risks at the software level from the operating system up to the applications. We hadn’t seen any companies focused on the attack surface from firmware down to hardware, arguably an equally large and significant attack vector.  While the need for more effective security solutions is obvious, finding original security ideas addressing large new markets is very rare.  Eclypsium represents both.

In getting to know the Eclypsium founders, Yuriy Bulygin and Alex Bazhaniuk, we quickly realized they were not only creating a potentially huge new market, they were conceivably the best team in the world to do it.  Before founding Eclypsium, they had spent years at Intel’s Advanced Threat Research and McAfee on the front lines of discovering new threats and analyzing the world’s most sophisticated hardware and firmware attackers. There they created the open source project, CHIPSEC, a framework for analyzing the security of PC platforms including hardware, system firmware (BIOS/UEFI), and platform component, which has garnered participation from many of the leading hardware manufacturers and cloud providers.  They bring together a truly unique collection of talent and experience in firmware threat research and real-world mitigation. Eclypsium’s mission is to find, stop and remove such attacks, which threaten the heart of every enterprise and organization today. They protect organizations from the foundation of their computing infrastructure upward, controlling the risk and stopping threats inside firmware of laptops, servers, and networking infrastructure.

We believe the Eclypsium team has the opportunity to create one of the next very large security companies and be the number one player in the evolving firmware security landscape. We look forward to working closely with Yuriy, Alex and team to build another leading technology company here in the Pacific Northwest.

You can learn more about Eclypsium and firmware security here:

POSTED IN: Madrona News

re:Invent 2018: What to Expect and What I’ll Be Looking For

Four Trends — The Enterprise’s Time has Finally Arrived

Amazon is hosting their 7th Annual re:Invent conference this week with over 50,000 attendees expected. AWS is approaching $30 billion in annual revenue run rate with a growth rate just shy of 50%. Amazon is the market leader in public cloud services and this year’s re:Invent conference comes at a fascinating time. Enterprise customers are embracing a broad definition of the cloud that is leading to more rapid adoption of both the public cloud and various edge cloud use cases. IBM is buying RedHat for $34 billion, Microsoft has emerged as the clear #2 player in the cloud market and Google is struggling to find their way (as evidenced by Diane Green relinquishing the Google Cloud role to former Oracle executive Thomas Kurian).

The four themes below highlight areas that Amazon will emphasize at re:Invent and provide a roadmap for the world of cloud computing from both a technology and go-to-market perspective in the years ahead. These themes will be highlighted and discussed in the main keynotes, working sessions and conversations throughout the week:

  1. Cloud computing is now the pervasive software model everywhere
  2. Data’s role has been transformed from system of record to system of action and intelligence
  3. Enterprise customers are finally ready to embrace the full potential of cloud models
  4. Partnership alignment is emerging as the key competitive dimension for cloud platforms

Cloud Software Models Are Everywhere

In the past several years terms like public cloud, private cloud, hybrid cloud, edge cloud and more have been used to try and distinguish between types of cloud deployments. But, increasingly any modern application is a cloud application in some form. The core technologies popularized in the public cloud like object stores, event driven functions, and scalable data services are being used everywhere. Those applications may still live “on premise” in a virtualized environment or they may live on a “thing” at the edge connected to massive computing resources at the cloud core. Regardless of where the application was developed or lives, it is based on technologies and processes that were built for the cloud. The pervasive development methodology is agile and iterative. And, the lines have blurred between developers and technology operators for the DevOps that keep these apps running. In that context, “clouds within cloud” and increasingly specialized cloud solutions are emerging for specific customer needs.

My expectation is the emphasis this year at AWS will be on expanding capabilities across several technology categories that make it easier for enterprises to adopt cloud. Compute instance types for CPU’s, GPU’s, FPGA’s and specialized deep learning processors will be expanded. Improved data management, databases and data warehousing capabilities will get launched. AWS’s suite of IoT offerings like Greengrass, CloudFront and FreeRTOS (operating system for microcontrollers) will be enhanced and highlight the growing opportunities for cloud at the edge. And, the capabilities popularized by the public cloud, including containers, event-driven functions, and EC2 instances will increasingly be available “on premise” to enable more hybrid application scenarios.

Data Unlocks Systems of Action and Intelligence

Even more important than “cloud everywhere”, is the transformation of applications through the power of data. Public clouds like AWS are a compelling place for data aggregation, preparation, manipulation, training and automated actions. Once your data systems are enabled in the cloud, you can evolve legacy “systems of record” into “systems of action” that are increasingly automated. From there, your data systems can expand to “systems of intelligence” that increasingly “know” the next best action to take. AWS, Azure, Google Cloud and others understand that if your data is stored and managed in the cloud, the next step is leveraging more advanced data intelligence services offered by your cloud of choice.

I expect that AWS will announce new or improved underlying data services in data streaming, data integration, data management and databases.They will also improve their machine learning application training and deployment capabilities (SageMaker) and their finished ML services (Rekognition, Translate, Comprehend (NLP)). Some of these services are built upon open source platforms and that community has raised concerns about how AWS leverages open source to build their own services. Finally, while subtle, AWS’s data services messaging will focus more on the benefits of AWS versus Azure rather than Oracle.

As it relates to data services, there are two key questions I will be looking to get answered:

  1. How will AWS position new and improved services relative to data services partners like Databricks, MongoDB and Snowflake who offer managed services on AWS today?
  2. Will AWS’s new data service offerings focus more on discrete services or integrated services that focus on holistic customer use cases and needs?

Enterprises Fully Embracing Cloud Models

With most central IT organizations and senior management now embracing the cloud, the products and messaging at re:Invent will be heavily focused on the enterprise “abilities”. These capabilities include securability, scalability, manageability and, increasingly, flexibility. While it is valid to assert that cloud security is better than most on premise data centers, security issues remains a risk to cloud adoption. Security offerings in the cloud and between the cloud and on-premise offerings are becoming more sophisticated. AWS will highlight their new offerings, but so will technology partners like Palo Alto Networks, F5, Tigera, and ExtraHop who can help enterprises secure workloads and enhance security operations on premise and in the cloud.

Central enterprise buyers also care about simplicity, transparency and standardization in the provisioning and management of workloads. I expect AWS to announce some new offerings in these areas as well. To do this, AWS will leverage their substantial investment in the AWS Marketplace which helps customers find, try, buy, deploy, measure and bill different cloud services to become a full-fledged services catalog and automated provisioning offering. AWS will also improve their broader billing and monitoring services to help enterprise customers address the increasingly complex world of Enterprise Discount Plans (EDP’s), Reserved Instances (RI’s) and various cloud migration incentive programs.

Despite not being part of the main keynote this year, VMWare will continue to have a major presence focused around enterprise customers. They have purchased CloudHealth and Heptio and increasingly partnered with companies like Apptio to assist enterprises with their journey to the cloud. Those services could be bundled with VMWare offerings to address the enterprise’s desire to have an independent partner’s perspective on cloud costs, management and innovation.

Partner Alignment Becoming Core Cloud Competition

With cloud deployments everywhere, data transforming applications and enterprise readiness high, the emerging competitive framework for major cloud providers is around how they partner with other technology-driven companies to meet the needs of customers. This is especially true in the enterprise, but the competition between clouds, cloud services and service providers exists across use cases.

AWS is the market leader and that position creates some advantages and challenges for them. On the advantage side, they can buy at sufficient volumes to partner well with infrastructure technology companies. Chip companies like Nvidia and Intel will undoubtedly have new offerings on AWS in the form of modern CPU and GPU service offerings. Contract manufacturers like ZT Systems will benefit from the massive scale and growth of AWS as a behind-the-scenes provider of infrastructure. And, while owned by Microsoft, a service like Github will continue to benefit from AWS’s early and ongoing deep relationship with the cloud developer community who offer ongoing feedback and insights to AWS product teams.

AWS’s relationship with other software providers, systems integrators and modern managed services providers are more complex. Some software companies, like the data services ones referenced earlier, face competing AWS offerings. And, sometimes those AWS offerings are built on open source software shaped by a community that favors “openness”. Established software companies like AppDynamics/Cisco, Splunk, and NewRelic are trying to make it easy for an enterprise to manage workloads whether they are in the public or private cloud. And, larger companies like VMWare and IBM/RedHat will increasingly be emphasizing how their software and services work and can help move workloads across the different cloud providers. Of course, hundreds of smaller, private companies will be attempting to leverage the AWS core infrastructure to deliver new solutions across application areas and vertical solutions with many of them building “intelligent applications” that leverage data, cloud compute and domain knowledge to solve specific customer problems.

In addition, enterprises are still trying to determine which workloads they can “lift and shift” in to the public cloud, which ones they can extend/expand to the cloud, and which ones are just not ready for the cloud (because of their proprietary hardware, high latency requirements or privacy/security concerns). These enterprises are looking for help from AWS directly and from a growing mix of cloud-native and traditional systems integrators. Those systems integrators are shaping the cloud strategies of enterprise customers by delivering more value in professional and modern-day managed services.

These realities lead me to focus on two key questions around cloud partnering:

  1. What role will AWS Marketplace play in aligning AWS with other technology partners and their end user customers?
  2. How do different partners view the quality of alignment they have with AWS relative to Microsoft as well as other cloud providers?

Beyond these four core areas, it will be exciting to see a broad mix of customer use cases at re:Invent. The agility and flexibility of the public cloud have unlocked innovations for private, non-profit and public sector customers of many shapes and sizes. Work done on AWS is helping people collaborate more effectively, improve their customer relationships, bring intelligence to automobiles, and even cure cancers. In the “cloud everywhere” world that exists today, AWS, their customers and their partners are only getting started!

Note: ExtraHop, Tigera and Snowflake are Madrona Venture Group portfolio companies.

POSTED IN: Madrona News

Software Robot Startup UiPath Lands Funding From Madrona And Others, Plans Seattle-area Expansion

POSTED IN: Portfolio Company News

Datacoral Raises $10M Series A For Its Data Infrastructure Service

POSTED IN: Portfolio Company News

The Difficult Decision For Heptio To Sell to VMware

We are thrilled for Heptio’s acquisition by VMware!  This transaction is another resounding reinforcement that Kubernetes has become the de facto standard for infrastructure across clouds.  It is also a tremendous validation of Heptio’s team, vision and execution.

Deciding “when to sell” is one of the toughest decisions faced by founders, boards and investors in growing companies.  When presented with an attractive alternative to continuing to build the company independently, boards have a “high class problem” — but one they must consider with utmost thoughtfulness.  Heptio was presented a very difficult challenge in this regard.

Heptio was founded by Kubernetes co-creators, Joe Beda and Craig McLuckie, less than two years ago.  Madrona had the privilege of investing with Accel in the $8.5M Series A round at the company’s formation, and I joined the board as an Observer.  Since this Day One, I’ve never been associated with a company that has accomplished more in as short a period of time.  Craig and Joe had an original vision that the Kubernetes’ community would continue to strengthen and its rapid adoption would continue to increase; however, it needed to become easier and enterprises needed help with adoption.  From this starting point, they saw an opportunity to lead a cloud native transformation in the enterprise and redefine the deployment and operations of modern applications across clouds.

This vision has exactly played out, and Heptio backed it up with great execution landing a blue-chip array of Fortune 500 customers for their Heptio Kubernetes Service (HKS) including 3 of the 4 largest retailers in the world, 4 of the 5 largest telcos in the US, and 2 of the 6 largest financial services companies in the US.  They also made significant impact on the Kubernetes community by contributing 5 OSS projects (ksonnet, sonobuoy, contour, gimbal, ark) and collecting over 5000 Github stars.  With this great execution, more funding followed.  Nine months in, Madrona led the $25M Series B and the company invited me to join the Board and my colleague Maria Karaivanova  joined as an Observer.

Through it all, Craig and Joe were the consummate founders.  They approached building their business with laser-focus and a driving ambition to genuinely help customers and create a large, lasting business in the process.  They were rock stars in the Kubernetes community, but approached all interactions with humility and pragmatism.  They were extremely strategic in thinking through potential moves on the industry chessboard in what is a very dynamic market; but they always realized that none of it would matter if not paired with week-in-week-out blocking and tackling.  Perhaps most importantly, they were relentless recruiters and built a world-class team of over 100 employees in less than 2 years, attracting other great leaders like Shanis Windland, Marcus Holm and Scott Buchanan.  In doing so, they walked the talk that culture and diversity matter deeply in building a successful business, often passing on a good hire in favor of the right hire who was an even stronger fit for the business.

So, why in the world did we decide to sell?  In short, sometimes you receive an offer too good to refuse.  Heptio had the team, momentum and plenty of funding to continue; but in VMware, they saw a partner who not only recognized Heptio’s unique insights, assets and market position, but also had the resources and reach to execute more quickly on their vision and deliver an enterprise Kubernetes service to any cloud.  The excitement over this potential – and a great financial offer – drove this deal.  Market consolidation was always anticipated, and this decision was certainly not a reaction to IBM acquiring Red Hat or other market externalities.

In this decision process, the role of the investor is to ensure the founders and management team have the broad perspective of “what might be possible,” provide an objective view on the market (both opportunities and risks), and ensure the company has the necessary resources.  At the end of the day, we support the founders and management team.  In this case, while this acquisition came sooner than anyone anticipated, we all agreed that the strategic fit and economics made joining forces the right decision.  Through it all, Craig and Joe balanced the interests of shareholders and employees along with other strategic considerations in exactly the way you hope any founders would.  Ping Li from Accel was also an incredible thought partner from before company formation through this decision, and overall was one of the best board directors I’ve ever had a chance to work with.

Congratulations again to the Heptio team!  We wish you all the best in furthering your mission and vision via the leadership roles you are taking inside VMware.  We are excited the whole team is staying intact in Seattle and will continue to grow here.  This acquisition is also a great validation of our broader investment theme around the enterprise move to cloud native and open source, and we continue to be very excited about our related investments in companies like Tigera, Shippable, and Pulumi.

Now my and Madrona’s fortunate job is to go find the next great Day One company … but I know it will be difficult to find another quite like Heptio.

POSTED IN: Madrona News

Spruce Up Makes Digital Interior Design Services Available For Everyone

POSTED IN: Portfolio Company News

Rover Acquires U.K.-based Dog Care Company DogBuddy, Accelerating Its European Expansion

POSTED IN: Portfolio Company News