Madrona Raises $300M New Fund, Focus Stays on NW

6/5/12Follow @curtwoodward

Madrona Venture Group, one of the top VC firms in the Seattle area, has raised a new $300 million fund that will continue the firm’s focus on early stage investments in the Pacific Northwest.

It’s the fifth fund for Madrona, whose previous, $250 million fund dates to 2008. In a statement, Madrona says its new fund surpassed an initial target of $250 million. It also says “most of the commitments” came from previous investors, including large endowments and foundations like the Kauffman Foundation. In addition, the fund drew investment from “a network of entrepreneurs and executives,” whose names weren’t disclosed.

Madrona’s marquee return in recent years was EMC’s $2.25 billion acquisition of Isilon Systems, and the firm is often known in the wider VC world for being one of the earliest investors in Amazon.com. Madrona has continued to invest in Northwest entrepreneurs over the years, backing companies including Decide.com, Cheezburger Network, and Appature.

In a statement, managing director Matt McIlwain said the local focus would continue, saying that “early stage venture capital is a local business.”

Madrona also made note of the fund’s size, saying that bigger isn’t necessarily better in venture capital. “Only a select few venture firms can profess strong historic returns while resisting the enormous temptation to raise funds that are too big to succeed,” Kauffman investment chief Harold Bradley said in the statement.

Madrona’s fundraising news follows similar reports out of other Seattle-area firms in recent months. Voyager Capital is seeking a new $125 million fund, while Founder’s Co-op closed its second early stage fund, at $8 million, in January.

Along with McIlwain, Madrona’s managing directors are Tom Alberg, Paul Goodrich, Greg Gottesman, Scott Jacobson, Len Jordan, and Tim Porter. We plan to update this post with more insight from McIlwain later this evening.

(Bloomberg first reported the new fund.)

Curt Woodward is a senior editor for Xconomy based in Boston. Email: cwoodward@xconomy.com Follow @curtwoodward

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