Seattle-area venture capital firm Ignition Partners is going through another transformation — and this time it includes an NFL captain.
Carter said the idea for Fuse came about after the senior partners at Ignition, founded in 2000 by a group of Seattle-area tech execs, said they would not raise a seventh fund.
Ignition will effectively sunset its brand name and manage existing investments in portfolio companies such as Icertis, Chef, Shyft, Maka, and others.
“We saw the opportunity and timing to double down on Seattle and build something of our own,” Carter said. “Having begun our venture careers at Ignition in Seattle, we are proud of this ecosystem and the relationships we have built here to support and accelerate the foundation of Fuse.”
Fuse plans to raise up to $100 million for its initial fund and deploy the capital to Pacific Northwest startups over 3-to-4 years. According to SEC documents filed last week, the firm has raised about $67 million thus far.
Fuse will follow a similar investment thesis to Ignition, focusing on enterprise software startups at the seed and Series A stage. It will look for companies “building software that reinvents the modern economy.”
Connors joined Ignition in 2005 after 15 years with Microsoft, including a stints as CFO and CIO. He’ll be operating managing partner at Fuse, along with Satbir Khanuja, a venture advisor at Ignition since 2018 who previously led DataSphere Technologies.
“No big story here other than a great run for Ignition and great foundation for Fuse,” Connors told GeekWire.
Also joining the Fuse team as venture partner is Bobby Wagner, the star Seattle Seahawks linebacker.
Wagner, drafted by the Seahawks in 2012 and a 6-time Pro Bowl selection, worked alongside Ignition for the past three years during his offseason, learning the ins and outs of venture investing. He’s an active angel investor, backing companies such as Denali Therapeutics and DraftKings, and is part of a16z’s Cultural Leadership Fund. Wagner also negotiated his own contract extension in 2019 that made him the highest-paid linebacker in the NFL.
“I plan to be very involved,” Wagner told GeekWire. “I’m excited to be a part of this team to win in Seattle.”
Wagner, a Seahawks captain for four of the past five years, said his investment thesis comes down to analyzing the founding team and culture.
“I believe creating a winning team and culture is extremely important for success, especially in the early stages,” he said.
Connors added: “Kellan, Cam and Bobby are the right age to be starting a firm where they control the economics and the culture and the future 100%.”
A 20-year run for Ignition
It’s typical for a longstanding venture firm to have various transitions. But the twists and turns at Ignition over the past two decades are certainly unique.
A team of former McCaw and Microsoft executives launched Ignition in early 2000, including Brad Silverberg, Steve Hooper, Jonathan Roberts, Jon Anderson, and Cameron Myhrvold.
The firm went through various evolutions over the next 20 years. In 2006 it launched Qiming to go after the China market. Three years later it created a separate company called Ignition Capital to invest in private equity and late stage investments.
Ignition raised $160 million for its fifth fund in 2013 and expanded its investing to Silicon Valley. At the time, the firm’s original partners decided to not invest new money. Connors, along with former Microsoft and Xensource executive Frank Artale and Silicon Valley venture capitalist Nick Sturiale, took over leadership reins.
Ignition made headlines in 2017 after Artale resigned at the firm’s request following allegations of “misconduct” against him.
Some of Ignition’s more successful investments include backing companies such as Splunk, DocuSign, Cloudera, Heroku, Parse, Xamarin and Xensource. It raised $200 million in 2015 for its most recent fund.
The next chapter begins with Fuse. It’s not clear if investors in past Ignition funds are now backing the new firm. Carter declined to comment on specific names behind Fuse’s initial fund, but said it includes many notable Seattle exes and entrepreneurs with experience at Microsoft, Amazon, Starbucks, Costco, and other giants. Axios reported that former Microsoft COO is an investor in Fuse.
Sturiale, currently a managing partner at Ignition based in Silicon Valley, will not join the Fuse team.
“Nick has been extremely supportive as we launch Fuse,” Carter noted.
Ignition has about a 50/50 split for its investments across the Seattle region and Silicon Valley, where it has another office.
Doubling down on Seattle
Ignition is one of the larger Seattle-area venture capital firms, along with Maveron, Madrona Venture Group, Voyager Capital, Vulcan Capital, and others.
Fuse joins other newer early-stage venture firms in Seattle such as Pioneer Square Labs, Madrona Venture Labs, Flying Fish, and others hoping to tap into the dense tech talent base across the Pacific Northwest.
“We think Seattle is the most exciting tech ecosystem in the world,” Carter said. “But what hasn’t kept up over the last decade is the capital to support entrepreneurs. We’re looking to fill that void.”
The Seattle market has long been criticized for its lack of local startup capital, especially in the context of how much talent has migrated to the area in recent years with the growth of hometown tech giant Amazon and engineering outposts set up by Facebook, Google, Apple, Salesforce, and others.
Despite the ongoing pandemic, venture capital investors sunk $2.3 billion into 135 deals across the Pacific Northwest during the first six months of 2020, up from $1.1 billion in 94 deals in the first half of 2019, according to GeekWire’s tally, derived from our running list of Pacific Northwest startup investments.
Seattle’s startup ecosystem is growing, but it still pales in comparison to Silicon Valley. Venture capitalists invested $1 billion across 68 deals in the Seattle area during the second quarter half of 2020, according to PitchBook. That compares to $16 billion across 469 deals in Silicon Valley for the same period.
Seattle recently ranked No. 9 on Startup Genome’s annual global startup ecosystem rankings.
A combination of a critical mass of tech talent, local STEM programs, new early stage venture funds, angel investors with more cash, and maturing company-building support lead some to believe that Seattle’s startup scene is poised for unprecedented growth.
“There are numerous leading indicators that paint a picture of extraordinary acceleration of startup creation over the next few years.” Jacob Colker and Oren Etzioni of the Allen Institute of Artificial Intelligence wrote last year.
In addition to local investors, interest from out-of-town firms continues.
An analysis of historical investment returns for markets across North America over the past decade found that Seattle was the most overlooked innovation market in North America.
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