In doing a review of the top VC deals of the year, I noticed something a little odd.
In the press release about Redfin’s big $50 million funding round, one name was noticeably absent on the list of investors: Madrona Venture Group.
Madrona was one of Redfin’s earliest backers, and it remains the company’s biggest shareholder with Paul Goodrich serving as chairman of the board.
So, why didn’t Madrona invest in the latest round, which was led by Tiger Global Management and T. Rowe Price Associates?
“There was a lot of demand for this round and we stepped back to bring new investors to the table,” said Erika Shaffer, a spokeswoman for the Seattle venture firm. She added that they are “incredibly excited about Redfin’s’ prospects.”
Madrona did not sell any of its shares during the $50 million round, though its share of the real estate brokerage company was “modestly” diluted down by not participating. Even so, Shaffer noted that Madrona remains the biggest shareholder.
Other existing investors such as Greylock Partners, Globespan Capital Partners, DFJ Venture Capital, Vulcan Capital and The Hillman Company participated in the round, though those firms joined Redfin later than Madrona did.
All of the money raised by Redfin, founded in 2002, went to the balance sheet. The $50 million funding round — a series F — was raised in part to test the feelings on Wall Street for the company.
“We decided to raise the round in part to understand how public company investors would evaluate Redfin, and in part because we felt it was a good time to raise capital,” CEO Glenn Kelman told us last month.
Redfin, which expects between $50 million and $100 million in revenue this year, has been discussed as a potential IPO candidate.
We’ll have to wait until those documents are filed to see just how much Madrona owns, and at what valuation. Could 2014 be the year we see it?
