Leading Seattle VC firm Madrona Venture Group expands to Palo Alto

Madrona Venture Group, a Seattle-based investment firm known for its big bets on companies like Amazon and Redfin, is expanding to the Bay Area.

The company said Tuesday it is opening its first office outside the Pacific Northwest in Palo Alto, California.

After 27 years of investing in Northwest startups, the firm has recently backed “acceleration-stage” companies in California, Utah, Illinois, Ohio and New York, it wrote in a blog post announcing the new office. Recognizing “proximity is important to company building,” Madrona is moving to expand its footprint outside the region.

Karan Mehandru, a venture capitalist and Madrona’s new managing director, will lead the Palo Alto location.

“With our roots firmly grounded in Seattle and the PNW, we will continue to double down on our differentiated network in Seattle while extending our footprint and network into California and beyond,” Mehandru wrote in a statement, adding the firm is “building a deep bench of investors, entrepreneurs and advisors” with expertise in machine learning, artificial intelligence, data infrastructure, computational biology and the future of work.

Founded in 1995, Madrona marked its 25th anniversary with a $500 million fund two years ago, its largest to date. The funds were split between two groups of companies: early-stage startups based in the Pacific Northwest and companies around North America that had honed their product and were focused on scaling up.

The investment firm was co-founded by William Ruckelshaus — the first Environmental Protection Agency administrator and former acting FBI director — Paul Goodrich, Jerry Grinstein and Tom Alberg, a lawyer and writer who is well-known for his early investment in Amazon.

Alberg, who died Aug. 5, is often credited with helping to usher in a wave of innovation in Seattle. Through Madrona, he backed and guided Redfin, business management software company Apptio, and Impinj, the maker of radio-frequency identification devices and software. But it wasn’t all grand successes, he told The Seattle Times in a 2015 interview.

“You have to be willing to take a risk,” Alberg said. “And you protect against that partly by not making two investments a year but making eight investments a year.”

Now, “technology-driven innovation in the PNW is still at Day One,” Madrona wrote in its blog post Tuesday. And we “are excited to help exceptional founders based here build their companies from the earliest days to the long term.”