Fueling Innovation: Madrona’s $770M Funds, The Resurgence of Domain-Specific Models, 2025’s Risk-On Era, and Enterprise AI’s P&L Potential
DeepSeek has made the start of this week very interesting — and we're still buzzing from our big news last week! With $770M in new funds, Madrona is doubling down on backing visionary entrepreneurs shaping the future of applied AI — read more about the new funds and our vision for the next 30 years on our blog. Jon Turow shares his take on DeepSeek and how deep domain expertise might matter more than raw compute. Matt McIlwain explains the current?“risk on” moment, with macroeconomic shifts and market enthusiasm creating the perfect storm for founders and investors to lean into innovation. Vivek Ramaswami and Sabrina Wu explore how enterprise AI agents can deliver real ROI by analyzing opportunities through the lens of company P&Ls.
Portfolio updates include Read AI's new one-click sharing and groups, Spice AI's open source 1.0-stable, and Common Room's Linda Lian was named one of Pavillion's 2025 CEOs to watch.
Perspective
DeepSeek R1 and the Rise of Expertise-Driven AI
DeepSeek R1's performance and cost numbers have the industry's attention, but its approach to model building might be the bigger breakthrough. Yes, it's a gift to app developers who get powerful new open-source models to build on. And yes, major labs will use these efficiency innovations to build even bigger models.
But there's a deeper story here: DeepSeek shows how domain expertise might matter more than raw compute in building specialized AI models. Their approach - using verifiable data and efficient reward functions — creates a new path for teams with deep domain knowledge to build their own models at a fraction of the usual cost.
Consider that DeepSeek emerged from a hedge fund, where the reward function is crystal clear. This hints at how other domain experts might leverage similar techniques - whether in finance, medicine, law, or industrial operations.
We're entering an era where smart training may matter more than raw compute. The future of AI may not just belong to those with the biggest GPU clusters but to those who can most effectively combine domain expertise with clever training techniques.
Madrona Partner Jon Turow explores this shift in depth here.
Madrona News
Madrona Raises $770 Million to Back Visionary Founders Building Applied AI
As Madrona celebrates three decades of company-building, we’re reflecting on what makes our journey so special: the founders. And the $770M in new funds we announced this week to back visionary founders underscores our commitment to partnering with exceptional entrepreneurs shaping the future.
From the earliest days of the internet to the incredible advancements in applied AI today, we’ve had the privilege of partnering with entrepreneurs who see the world differently — and who have the grit to turn bold ideas into industry-leading companies.
With Madrona Fund X and Acceleration Fund IV, we’re doubling down on what we do best:
Embrace the “Risk On” Mindset in America 2025: The Year to Bet Big on Innovation
With steadying inflation, resilient employment, growing corporate cash reserves, and a wave of investor enthusiasm, 2025 is shaping up to be a year defined by bold entrepreneurial moves and calculated risk-taking.
Matt McIlwain explores these topics in this post, focusing on four pillars:?
This is an environment where hesitation could cost dearly, while strategic bets could redefine the future of industries. From operational execution and AI-driven innovation to IPOs and M&A opportunities, 2025 presents a unique opportunity for leaders to lean in.
Newsletters
领英推荐
Aspiring for Intelligence: Agents by P&L
Vivek Ramaswami and Sabrina Wu Wu have extensively written about how enterprise AI agents are redefining industries in their Aspiring for Intelligence newsletter. But from a TAM perspective, where are the biggest opportunities, and what will it take for these agents to be adopted?
This week, they break it down by analyzing company P&L statements to identify where the biggest opportunities for impact and spend truly are. For AI agents to succeed, they must deliver tangible ROI to their customers, serving as either a revenue driver or a?cost saver. Although the tech sector has been quick to adopt these solutions, Sabrina and Vivek believe huge opportunities exist in non-tech industries.
Portfolio News
‘The Best AI Has the Best Data’: Highspot?GeekWire 200 Leader
Highspot kept the No. 1 spot in the 2025 GeekWire 200, the news outlet's list of privately held technology companies in Seattle and the Pacific Northwest.
Last month, Highspot unveiled its “AI roadmap,” highlighting new products, including “Highspot Copilot Actions,” which recommend actions to users, and “Copilot Agents,” which complete tasks autonomously. The company has spent more than a decade collecting insights on the sales strategies used by its customer base — which includes NVIDIA, Siemens, FedEx, and HSBC — and uses?that data to fuel a proprietary “knowledge graph” that drives recommendations for customers — both based on their internal performance and within the broader Highspot ecosystem.
Events
Demos and?Discussions With?GenAI Collective
Join The GenAI Collective and Madrona for an evening celebrating AI innovation and collaboration, featuring demos from five cutting-edge startups: Moondream AI, Numbers Station, Ravenna, OpenPipe, and Edgerunner. Each presenting company will facilitate table discussions on a theme connected to their expertise.?Wrap up the night with open networking, great food, and drinks, making meaningful connections in a vibrant and relaxed setting.
Portfolio Roundup
Clari CEO Andy Byrne was featured in an article by ITPro Today.
iSpot Chief Commercial Officer Mark Myers joined ClickZ to discuss how they're using AI to shape the future of add measurement.?
Read AI introduced one-click sharing and groups.
Stacklok Sr. Security Researcher Poppaea McDermott continues her series on threat hunter tactics in The New Stack.
Spice AI announced Open Source 1.0-stable.
Echodyne was featured in an article in Aviation International News.
MotherDuck Designer & Builder Hamilton Ulmer joined The Ravit Show at the Small Data SF.
Common Room CEO and Co-founder Linda Lian was included in Pavilion's 2025 CEOs to watch.
Cohesity makes CRN’s list of Top 100 Cloud Companies.
MontyCloud?secured investment from S3 Ventures.
Grammarly CEO?Shishir Mehrotra?was featured in a story by The Information.
Early stage lifescience investor & strategist
1 个月Congrats to Madrona. And thanks for sharing your insights!
Builder. Madrona Partner. Ex Amazon AWS.
1 个月There is SO MUCH innovation and opportunity, and we're honored to back the founders who are getting after it.
Managing Director at Madrona Ventures
1 个月We are extremely grateful to our entrepreneurs for trusting us to be a core part of their journey, to our investors (LPs) for their continued partnership, trust, support, and investments, and to all our ecosystem partners that together foster and scale the innovation ecosystem.
Former ‘Nuke’ Submariner & Hi-Tech-Exec (COO/CFO)
1 个月??