The founding partners of the new Seattle-based venture firm Flying Fish met as angel investors deploying capital in the talent-heavy, cash-light region around Amazon and Microsoft’s corporate headquarters.
“We’ve underperformed relative to the talent pool,” is how Heather Redman, one of the firm’s three founding partners, describes the region.
Well, now Flying Fish has held a first close of $23 million on a targeted $80 million fund to bring some much-needed institutional capital at the seed and Series A stage to a geography that’s seen a number of successful exits and a wealth of talented engineers crop up, but little in the way of regional investor talent to support it.
Seattle’s success extends beyond Microsoft’s Redmond, Wash. headquarters and Amazon’s downtown death star. There’re travel behemoths like Expedia, real estate riches pouring from Zillow and Redfin, titans of visualization and business intelligence software like Tableau, and up and coming success stories like Avalera.
All of those companies are bringing in talent from elsewhere to complement Seattle’s growing reputation as a hub for artificial intelligence and machine learning research and engineering talent thanks to programs at the University of Washington.
Joining Redman, a former executive at AtomShockwave, Inc., Getty Images, Inc. and PhotoDisc, Inc. are two former Microsoft employees; Geoff Harris, who served as general manager for the Speech and Natural Language team, and Frank Chang. Harris and Chang met while working on natural language processing and machine learning for the gargantuan that Gates built before Chang absconded to Jeff Bezos’ Amazonian environs.
With its $28 million first close, Flying Fish is well on its way to joining a host of other investment firms that have launched or closed new investment funds in the Pacific Northwest since the beginning of the year. In all, at least $140 million in new capital has been committed to venture firms in the region, like PSL Ventures, the venture capital firm started by development studio Pioneer Square Labs, and Founders Co-op, a longtime early-stage investor on the Seattle scene.
“What we believe is that with the additional VC [firms] beginning to be formed here… that is going to increase the number of company starts geometrically,” says Redman. “The talent is here, the entrepreneurial spirit is here and the use is here… but [entrepreneurs] want to do it where there is the capital to support them.”
The firm is targeting around 25 investments for its $85 million first fund with a focus on machine learning, artificial intelligence and software services. Investments will range between $500,000 and $5 million, according to the firm’s partners.
Already, Flying Fish has put money to work in seven new deals:
- Ad Lightning – Provides publishers a tool to manage bad ads on their sites
- Otto Robotics – Robotic automation for the fast food industry (still in stealth — no website)
- MessageYes (Sold to Nordstrom) – Developers of an e-commerce chatbot over SMS, Facebook Messenger etc.
- Element Data – Developers of a decision engine that takes into account human emotion in the decision-making process
- Tomorrow – Providing financial planning services such as wills, trusts and insurance
- Finn.ai – Pitching a financial services chatbot to engage with banks over Facebook Messenger and other like platforms
- Streem – Offering an augmented reality application connecting consumers with professionals in the home improvement and maintenance market