Another out-of-town venture firm is looking at Seattle for new startup investments.
Los Angeles-based Bonfire has backed three Seattle-area startups and more could be on the way.
“It’s an incredible ecosystem littered with talent,” said Tyler Churchill, a Seattle-based principal for Bonfire.
The 6-year-old firm invests in early stage B2B companies. Most of its investing team is based in Los Angeles but the firm backs startups across the U.S.
Churchill moved to the region with his wife, who is from the Seattle area.
“There’s such a clear value proposition to having someone in Seattle and the Pacific Northwest,” he said.
Bonfire isn’t the only firm eyeing Seattle.
Point72 Private Investments is growing a team in the area, GeekWire reported in January.
Other firms, including several based in Silicon Valley, have kept a radar on Seattle over the past decade as the city’s startup activity grows.
The Seattle region has long been a hotbed for enterprise software companies, buoyed by hometown cloud computing giants Microsoft and Amazon.
Churchill also pointed to a newer crop of B2B software companies such as Outreach and Highspot that are growing the tech talent pool.
Even with a record amount of venture capital flowing in Seattle in 2021, many still believe the market is undercapitalized.
“It feels like the entrepreneurial energy of this ecosystem is reaching a bit of a tipping point,” Churchill said.
Bonfire doesn’t have plans to establish an office in the Seattle area but is hosting events in the region and building connections. Churchill said other locally based venture firms have “welcomed me with open arms.”
“There are going to be competitive dynamics, but it really feels like there are a lot of opportunities to work together with firms at the seed stage,” he said.
Bonfire led a $4 million round for Seattle-based health tech startup CalmWave in November. It also backed remote care company Optimize.health, and recently invested in an undisclosed Seattle company. Bonfire typically inks checks in the $2-to-$3 million range.
The firm raised $230 million for two funds last year, even amid the venture capital slowdown.
Churchill said he’s advising startups to conserve cash and optimize sales funnels.
“The growth-at-all-cost mindset has gone out the window,” he said. “And so it really comes back to good fundamentals.”
