Washington state has long been a hotbed for some of the biggest tech titans in the world, producing giants like Amazon and Microsoft. And now it boasts a new crop of VC-backed startups that are set to redefine the state's tech scene.

Washington's rapidly growing economy, federal tax benefits and a robust startup ecosystem have likely all worked to spark VC interest in the last few years, with investors pouring billions of dollars into sectors such as fintech, cybersecurity, healthtech, AI and machine learning.

The latest example is Icertis, the developer of a contract management platform, which announced Wednesday that it has secured $115 million in a Series E round co-led by Greycroft and Premji Invest. The funding values the Bellevue, WA-based company north of $1 billion. Icertis is the third business headquartered in the Evergreen State to attain unicorn status this year. Auth0, which operates an identity authentication and authorization platform, and Outreach, a maker of sales engagement software, both crossed the $1 billion mark earlier this year.

VCs closed around 372 deals in Washington in 2018, with a record capital investment of $3 billion, per the PitchBook Platform. And 2019 is poised to rival last year's numbers, with more than $2 billion in venture capital already funneled into 227 deals.

 

Two of the largest deals since the start of 2008 occurred in the past few months. International money-transfer startup Remitly raised $220 million from investors including Al Gore's Generation Investment Management, Owl Rock Capital and Stripes Group just last week. The Seattle-based business helps to eliminate the need for fees, codes and agents while helping users manage their money. Remitly is also backed by Bezos Expeditions, the venture capital firm founded by Amazon founder Jeff Bezos that has invested companies including Uber, Airbnb, WorkDay and Twitter.

Other notable deals in 2019 include Sana Biotechnology, a developer of engineered cells used to create medicines, which raised $219 million in February, and RealWear, the developer of a hands-free AR headset that collected $80 million earlier this month.

The top VC investors in Washington


So who are the most active investors behind all of these Washington companies? Seattle-based Alliance of Angels takes the top spot, with 197 investments since the start of 2008, per PitchBook data. With more than $100 million in AUM, the group comprises over 140 angel investors that invest upward of $10 million each year in Pacific Northwest startups. 

Alliance of Angels is followed closely by Madrona Venture Group. An early-stage VC with a portfolio that includes Rover, The Riveter and PayScale, Madrona announced the launch of a $100 million acceleration fund in May.

None of the VC industry's typical heavyweights made our top investor list, and in fact all of them, except for California-based Keiretsu Forum, are based in Washington, perhaps indicating an interest in keeping things local.

 

The potential for a bright future

Apart from funding dozens of startups through its VC arm, Microsoft continues to contribute to the startup industry in a unique way. A recent report by Geekwire highlights the fact that nearly 25% of the top tech startups in Seattle, including OfferUp, Convoy, Auth0 and Outreach, have been founded by Microsoft veterans. The next most common former employer? Amazon.

And Seattle is also among the top five metro areas boasting the most VC deals for companies with all female founders since 2006, trailing only behind popular locales such as New York and the Bay Area, according to the 2Q 2019 PitchBook-NVCA Venture Monitor.

Featured image via rabbit75_ist/iStock/GettyImages Plus

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