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Lexion Raises $4.2M To Bring AI To Contract Management

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Our Investment In Lexion: Finding The “Data Needle” In A Haystack Of Documents

Today, Lexion announced a $4.2 million Series Seed funding round led by Madrona, and we couldn’t be more thrilled.

The business world is filled with and ruled by an ever-increasing mix of complex documents that need to be constantly managed – from customer and vendor contracts to insurance agreements to commercial real estate agreements. Exactly how and when “business gets done” is determined by the key details in these documents, and yet the process for tracking and acting upon these details is often highly manual, time consuming, and inconsistent. This is where the power of Artificial Intelligence (AI) and Natural Language Processing (NLP) come in.

Enter Lexion, a new offering for underserved mid-market businesses that provides a powerful application, based on AI and NLP technology developed at Seattle’s Allen Institute for Artificial Intelligence (AI2), built from the ground-up to ingest and understand your corporate contracts. Whether it be a pricing term, a partnership revenue share agreement, a renewal date, or an extension clause, the details are tedious to find and track and yet necessary to understand and be able to act on in order to run a business well. Lexion is your powerful magnet for locating that “needle hidden in the haystack” of your paperwork, and it helps make you smarter, faster, and more action-oriented when running your business.

Lexion Founders, Emad Elwany, Gaurav Oberoi, and James Baird.

Gaurav Oberoi, Lexion founder and CEO, is a Seattle-based entrepreneur whom we have known and have wanted to work with for a long time. He is a tremendous founder and well-known in the tech community both for his successes in and his enthusiasm for the Seattle startup scene. He founded and bootstrapped successful startups Billmonk (acquired by Obopay) and Precision Polling (acquired by SurveyMonkey) and originated the still popular startup email list, STS (SeattleTechStartups), over a decade ago. Gaurav, together with co-founders Emad Elwany and James Baird, came together at AI2 and formed the idea for Lexion over discussions on the common customer problem of intelligent document management and then built Lexion as a solution to solve it.

At Madrona, we love this customer- and problem-first approach to company creation and are excited to support the Lexion team from Day One. This investment also supports one of our core investment themes of ML-driven intelligent applications, in this case using advanced text mining and NLP techniques to extract structured data and insights from large corpuses of unstructured information to solve a vertical business problem, here specifically contract management. We think there will continue to be more opportunities in this form of entity extraction from large text sets, and this investment builds on the theme behind our other startup in this space, Lattice Data (acquired).

In talking to dozens of portfolio and other midmarket and growth companies, we heard this pain point and market opportunity reiterated over and over again. We were enthused as this company and technology came together to solve the problem, and are very excited to also have forward-thinking law firm, Wilson Sonsini, Goodrich and Rosati, the premier legal advisor to technology, life sciences, and growth enterprises worldwide, invest a sizable amount and join the board. WSGR clearly sees their clients dealing with this same issue of contract management and understands deeply the differentiated approach Lexion is bringing to market. We are looking forward to working with David Wang at WSGR and the team there to help build Lexion’s success.

Lexion is also the latest company to spin out from AI2 and the third we have funded (previous early stage investments were Kitt.ai and Xnor.ai). AI2 has proven to be an incredible incubation ground for companies – and it’s great to see Seattle and our region nurturing AI for the broader good.

To learn more about intelligently and cost-effectively managing your contracts – visit https://lexion.ai/

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Customer Data Management Company Amperity Raises $50M

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Can Seattle Become A Financial Technology Hub? Why Some Tech Leaders Are Banking On It

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Amperity Update Gives Customers More Control Over Customer Data Platform

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Uber Acquires Seattle Startup Mighty AI To Fuel Its Push Into Self-driving Cars

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This App Listens In And Fills Out Paperwork So Doctors Can Focus On Patients

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Gas Station On Wheels: Booster Fuels Raises $56M To Expand High-tech Mobile Fuel Delivery Service

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Crowd Cow Expands With New Local Beef Program, Lands More Investment From Ashton Kutcher

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Healthcare Tech Company Accolade To Double Headcount In Seattle With New HQ Office

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Suplari Named a 2019 Gartner Cool Vendor in Sourcing and Procurement Applications

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Seattle Is The ‘Landlord’ Of The Internet, Thanks to Amazon and Microsoft’s Cloud Prowess

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Highspot Reels In $60M For AI-powered Software Used by Fortune 500 Sales Teams

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Xnor’s AI2GO Serves Up Custom Edge AI Models With A Few Clicks

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Algorithmia Raises $25M Series B For Its AI Automation Platform

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Applying Machine Learning to Finding Great Talent – SeekOut

I’m excited to welcome SeekOut to our portfolio. SeekOut is a game-changing solution for recruiters and hiring managers to identify and connect with high performers who have a demonstrated track record of solving problems that are relevant to their needs.

In our capacity as the Talent Team at Madrona, Matt Witt and I help our portfolio companies – and the ecosystem at large in greater Seattle – uncover, attract, select and retain a diverse workforce of high performing individuals. We need great tools to do this work. Once every couple of decades a game-changing recruiting tool like SeekOut comes along to provide an order of magnitude advantage over previous solutions. Matt and I took SeekOut out for a spin last year to give feedback to Soma on the capabilities of the product. It didn’t take long for SeekOut to become an extension of our brains and our sourcing platform of choice. We now use it daily and recommend SeekOut to our portfolio companies as one of the most important tools they need for candidate discovery and engagement.

S. Somasegar (Soma) led our investment in SeekOut and he along with the founders, Anoop Gupta and Aravind Bala, know firsthand the pain of recruiting engineers from their days at Microsoft leading teams of engineers on projects with huge scopes. But since Anoop and Arvind were not recruiters by profession they spent a lot of time with their customers and that has paid off with a rich feature set that works for recruiters across a broad set of industries. They have applied the tools they used as engineering leaders on massive computational projects to the problem of matching data on people with the needs of companies that are trying to grow both quickly and intelligently.

“We see a lot of recruiting related solutions focused on the talent market. What made SeekOut stand out was the team’s pursuit of the solution, customer focus and perseverance which has paid off with the incredible customer adoption we have seen this year since the launch of the product,” commented Soma.

SeekOut recognized there is significant room to go beyond the open web or LinkedIn in terms of both data sources and ML/AI and with that, provide better insights on candidates in competitive markets. SeekOut leverages self-reported data from platforms like LinkedIn (what individuals say they’ve done) and performance data like GitHub and Patents/Publications databases (what they’ve actually done) and who they actually are (pedigree, work history, geography and specific demographics including diversity and contact information). The result is a massive, dynamic database that is constantly being updated to more effectively reach out to highly relevant candidates. We recently published our investment themes and SeekOut is a perfect example of our intelligent app category – they are taking a huge amount of raw data, organizing it and applying intelligence to it to deliver better outcomes for users.

Anoop and Aravind also found that SeekOut made it possible for non-technical recruiters to gauge the relative merits of engineering candidates based on the quality of their work products. Gauging engineering talent is something most non-engineers find impossible to do and is a constant source of frustration between engineering leaders and tech recruiters. SeekOut’s advanced features help recruiters dissect keywords to their root and suggests derivatives and alternatives while simultaneously learning about use cases and teaching recruiters what the terms actually mean. This gives recruiters the ability to go fast and compete more successfully.

As recruiters on the front lines, we can tell you that no other tool does this combination of things as well as SeekOut. Another recruiter told me “I was able to access hundreds of candidates through SeekOut that I hadn’t ever seen before on LinkedIn. It has been powerful specifically searching for female engineering managers. I’ve recently started looking at Data Science as well, and it feels like I’ve found a gold mine!”

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‘Airbnb For Warehousing’ Startup Flexe Raises $43M To Help Online Retailers Take On Amazon

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Seattle Startup Spruce Up Raises $3M For AI-powered Home Shopping Platform

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Introducing Madrona’s Acceleration Fund

Today we are introducing a new Madrona fund, the $100 million Madrona Acceleration Fund. This new fund expands our ability to work with entrepreneurs around the country as their companies move from product-market fit to accelerating business growth.

Over nearly 25 years, Madrona’s main passion has been working with exceptional entrepreneurs from the earliest stages by rolling up our sleeves to help them build successful companies. We believe that getting involved at an early stage (seed and Series A) is primarily a local business. Our focus has been on the Seattle/Pacific Northwest region which is one of the leading centers of innovation in the world. It can take more than a decade to build a great and lasting company and we have been there for all the ups and downs of the journey. Amazon, Apptio, Isilon, Impinj, Redfin and Smartsheet are just some examples of Madrona’s strategy in action.

As other companies find product-market fit, we believe there are investment opportunities where Madrona can add value in a complimentary way to existing investors and help this additional set of companies succeed. So, today we are announcing our first $100 million Acceleration Fund to make initial Madrona investments at a Series B or C stage in leading companies in both the Pacific Northwest and beyond. For us, Acceleration Stage means the company has strong evidence of product-market fit, has demonstrated customer value and product differentiation, and has complimented exceptional founders with key executives to help build AND sell those products. Additionally, we look for market signals that indicate the company has a clear path to become a lasting and significant company. With this new fund, we will lead rounds or partner with other investors on a few select Acceleration Stage companies each year.

MADRONA VENTURE GROUP FUND STRATEGY

Some folks have asked us why we are creating the Acceleration Fund and why now?  We wanted to share with the innovation ecosystem, and especially entrepreneurs, how we are thinking about this opportunity:

  • Madrona has nearly 25 years of experience and success adding value at every stage of a company journey – from Day One for the long run. This includes the acceleration stage of growth that is often marked with a B or C funding round, and then the ongoing progress that lead to IPO’s or M&A outcomes.
  • Our hometown, greater Seattle, has emerged as a global leader in cloud computing, AI/ML, new retail and much more. Madrona has been an early leader and investor in these sectors leveraging our longstanding relationships with outstanding research organizations like the Paul Allen School of Computer Science at the University of Washington and Allen Institute for Artificial Intelligence and outstanding entrepreneurs.
  • Seattle is home to two of the top three largest market cap companies in the world (Microsoft, Amazon) and a thriving ecosystem. Madrona has a proven ability to help companies navigate and partner with these companies as well as the over 100 global technology companies that have a significant presence in our region.
  • We have built deep relationships with entrepreneurs, co-investors and strategic partners who increasingly encourage us to evaluate new Madrona investments at the acceleration stage (examples include Accolade, Jama, Snowflake, Tigera, and UIPath) in our region and beyond it.
  • Being self-aware, we have also missed out on investing in some high potential, Seattle area acceleration stage companies. Quality companies like Outreach, iCertis, Textio and Auth0 come to mind. We are excited to be considered by both best-in-class acceleration stage companies around the country and in Pacific NW companies where management teams believe we can add complimentary value for their next stages of growth.

We believe our understanding of building value from an acceleration stage forward is differentiated and high impact. But, the real validation comes from what entrepreneurs believe and the results their companies produce.

Mark Mader, CEO of Smartsheet

“Madrona invested in Smartsheet in the Series A and then two years later during the depth of the recession with a product revamp in front of us – they invested further.  As product-market fit was achieved and we scaled 20x, they also effectively partnered with other investors — all the way through to our IPO in 2018.  Madrona delivered value across hiring, partnering, go to market strategy, capital raising, and more.  High quality companies poised for growth will clearly benefit from the new Acceleration Fund.” 

Daniel Dines, founder and CEO of UIPath

“UiPath has been on a long journey of growth and when we first started talking about building an R&D center in the Seattle area, I immediately knew we needed a local partner with experience building products, teams and go to market partnerships.  We found that in Madrona.  The team has helped us accelerate some key product strategy objectives, recruit important team members to help scale the team and also connect with local technology and business leaders at Microsoft who are very important to fulfill on our partnership goals together.” 

Raj Singh, CEO of Accolade

“When I joined Accolade almost four years ago – the mission was to accelerate the company’s growth by finding the best talent to build a world class product and distribution team. To do that, you need world class partners. Having worked with Matt McIlwain and Madrona on both the Apptio and Amperity board of directors, reaching out to Madrona was high on my priority list on day one. And they have lived up to my expectations – helping with customer acquisition, critical hires, key partnerships, and invaluable counsel.”

Let’s talk!

Madrona has been adding to our team so that we can continue to partner with our Day One investments over the long term and selectively make a few acceleration stage investments each year. Hope Cochran, with over two decades of scaling, taking public and guiding exceptional companies, recently became a Managing Director. Sudip Chakrabarti, with extensive experience investing in Silicon Valley, moved up last year to join us as a Partner. Katie Drucker became our Head of Business Development and Partnerships. And, we continue to add to our network of Venture Partners and Strategic Directors with a set of highly accomplished leaders including Terry Myerson, Luis Ceze, Betsy Sutter, Ted Kummert and Mark Britton.

We look forward to investing with companies that are approaching the “acceleration stage” of their company life and are interested in exploring a fit with Madrona. We are looking to lead rounds, partner with your existing investors and roll up our sleeves as a team to have a positive impact on your company’s trajectory. So, please reach out to one of us directly or feel free to send a note to acceleration(Replace this parenthesis with the @ sign)madrona.com.

There has never been a better time to be an entrepreneur and innovator. And, we believe, it is essential to have the “Seattle Perspective” as part of your team to accelerate growth and maximize long-term value. We encourage you to talk to the entrepreneurs, co-investors and partners we have had the honor to work with for almost 25 years. And, we look forward to being a resource to you in the months ahead.

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More Cash Crops Up For TerraClear As Startup Raises $6.1M In Bid To Change Farming With Advanced Tech

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