Seattle-based venture capital firm Madrona Venture Group plans to open a new office in the heart of Silicon Valley.
Along with an office in Palo Alto, the firm introduced Karan Mehandru on Tuesday as its newest managing director to lead the Bay Area outpost. Mehandru is the former venture capital lead at Steadfast Capital, a firm based in New York City.
But the Palo Alto office doesn't signal a new focus on Bay Area companies. S. "Soma" Somasegar, also a managing director at Madrona, said the office allows the firm to stay attuned to innovation trends that will help Madrona with its portfolio companies.
"It's not enough to just play in the Seattle ecosystem. We need to keep our eyes and ears closer to the ground in terms of what's happening and be willing to participate in some way, shape or form in other ecosystems," Somasegar said. "The largest ecosystem, even today, in the U.S. is the Bay Area for technology-based startups."
Madrona plans to open the Palo Alto office next month with Mehandru and an executive assistant to start. The firm might add another investing professional down the road, Somasegar said.
Madrona, founded in 1995, has invested in big names like Amazon.com Inc., Redfin Corp. and Rec Room Inc.. The firm raised more than $500 million between two funds in December 2020 and a $120 million extension for a separate fund in December 2021.
In addition to early-stage companies, Madrona also invests in what it calls "acceleration stage" companies, with Series B and C rounds being the sweet spot. While Madrona prefers investing in Seattle-area companies at the early-stage level due to the hands-on nature of growing the companies, the firm's technology knowledge has allowed it to invest in later-stage companies, expanding Madrona's geographical reach, Somasegar said.
The firm has already invested in companies outside the Seattle area, such as UiPath Inc., a publicly traded automation company based in New York City, and CommerceIQ Inc., a Mountain View, California-based company that focuses on automation for consumer brands.
In addition to his time at Steadfast, Mehandru spent more than 10 years at Trinity Ventures. According to Madrona, he invested in Seattle-area companies such as Auth0 Inc. and Outreach Corp. while at Trinity. Somasegar said Madrona heard about six or seven months ago that Mehandru was thinking about his next chapter, and the firm had known Mehandru for more than a decade and even co-invested in companies with him.
"We've seen how he comes to the boardroom. We see how he adds value to the founding team and the management team," Somasegar said. "We've been very impressed with him over the years."
