Seattle Week in Review: 100k to AMZN, MSFT’s Olympia Agenda, VC Stats
This was a busy week. Let’s get right to our review featuring a Microsoft acquisition in “machine literacy”; Amazon’s plans to hire 100,000 full-time U.S. workers by mid-2018; a green light for the UW’s new computer science building; transparency from Microsoft on its agenda for the state legislative session; 2016 venture capital statistics, including a surfeit of new venture fundraising; personnel changes at Seattle-based VC funds Madrona and Maveron; and another acquisition out of Washington’s cleantech sector. Read on:
—Microsoft bolsters its artificial intelligence group with the acquisition of Maluuba, a Montreal-based startup with the audacious goal of teaching machines to read, enabling them to get smarter on their own. The acquisition brings a talented team and an expanded presence for Microsoft in Montreal, a leading center of deep learning research.
—Xconomy, meanwhile, is bolstering our coverage of the impact AI, automation, and robotics technologies on human labor. We’ll be publishing periodic End of Work reading lists, curating the onslaught of news and opinion on this broad, essential topic. Here’s our first one, which looks at presidential rhetoric on automation, job creation, and “onshoring”; innately human characteristics such as heart and gut instinct; and the next game to be conquered by AI: poker.
—Yes, the robots are coming for our jobs—but one of the big users of industrial robots, Amazon, is planning a major ramp-up of human hiring. If you thought the e-commerce and cloud computing giant was growing fast before, buckle up: In the next 18 months, the Seattle-based company said this week, it plans to hire 100,000 full-time U.S. employees, bringing its staff to 280,000 by mid-2018.
(Despite this eye-popping, highly credible, near-term job creation plan, Amazon’s announcement, as of this writing, has gone unmentioned publicly by the country’s president-elect, who on Wednesday said of himself: “I will be the greatest jobs producer that God ever created.”)
The local impact of Amazon’s growth is by now unmistakable. The company has transformed the downtown and South Lake Union skyline. The spheres that anchor the growing urban campus are the most iconic symbol of Amazon’s Washington presence (pictured at top). The company says it has more than 40,000 employees between its headquarters and fulfillment centers in Washington. The corporate campus continues to grow, and will ultimately encompass more than 30 buildings and 10 million square feet of space in downtown Seattle.
—The University of Washington Board of Regents on Thursday approved a financing plan for a new computer science building, CSE II, which, when completed in late 2018 will help double the number of computer science graduates from the state’s flagship university. Preliminary job site action is set to begin next week, says UW computer science professor Ed Lazowska.
Microsoft, Amazon, and earlier this week, Zillow Group, have pledged major corporate support for the project, as have more than 100 individual contributors, including other companies that have so far remained unnamed.
The UW continues public and private fundraising for the project. It will seek $7.5 million in additional capital from the state “to bring the total state funding for it in line with the original $40 million request,” writes Microsoft President and Chief Legal Officer Brad Smith in a lengthy post outlining Microsoft’s priority issues in Olympia this session. Smith chairs the fundraising campaign committee for CSE II; Microsoft has itself pledged $20 million to the project.
—Smith’s post is a good read for those watching the course ahead for the ship of state. As one of Washington’s most powerful economic entities, Microsoft over the years has played an outsize role in shaping policy. Smith writes that the decision to lay out its state policy priorities in this way came in response to calls for transparency from public interest groups. “We thought about this and concluded that these groups make a good point; after all, the democratic process benefits from more open and public discussion,” he writes.
The priorities include: education and workforce training; criminal justice system reforms (a new priority for the company this session); equal pay; the Cascadia Innovation Corridor; and broadband access in rural areas.
There’s a lot of substance under each of those headings—too much to summarize easily here, so read it yourself.
—2016 venture capital investments in Seattle-area companies were down from last year, as they were nationally, according to data released this week by Seattle-based PitchBook, which is the National Venture Capital Association’s new data provider for the quarterly Venture Monitor report. On the upside, VC firms raised more capital from their investors than at any time in the last decade: $41.6 billion across 253 funds, including seven marquee firms that raised funds of $1 billion or more.
Xconomy covered two new funds across our network this week: “Moneyball” VC fund Correlation Ventures and a strategic fund from life insurance giant Northwestern Mutual.
Another new fund emerged this week to make investments focused on maximizing the societal benefits of artificial intelligence, “and minimize its potential harm.” That’s how Knight Foundation president Alberto Ibargüen describes the Ethics and Governance of Artificial Intelligence Fund. Behind it are Reid Hoffman, the LinkedIn founder and partner at Greylock; Pierre Omidyar, eBay founder; Ibargüen on behalf of the Knight Foundation; as well as directors of the MIT Media Lab and the Berkman Klein Center for Internet & Society at Harvard University; the William and Flora Hewlett Foundation; and Jim Pallotta, founder of the Raptor Group.
In Washington, the largest 2016 fund, $295 million, was raised by Tola Capital, an enterprise software-focused VC firm headed by former Microsoft manager Sheila Gulati. Biomatics Capital, a healthcare-focused fund headed by former advisor to Bill Gates on science and technology, Boris Nikolic, and Julie Sunderland, director of program-related Investments at the Bill & Melinda Gates Foundation, raised a $200 million fund.
In the last two years, local VC groups have raised more than $2.3 billion, according to the Venture Monitor report.
—Two of Seattle’s best-known venture firms made public significant personnel moves this week.
Madrona Venture Group promoted S. “Soma” Somasegar, the longtime Microsoft executive who joined the firm in 2015, to managing director. Julie Sandler, who joined Madrona in 2011, was promoted to partner. Hope Cochran, most recently CFO of Candy Crush maker King Digital, was hired as venture partner. Dan Li was named senior associate at the firm.
—The Alliance of Angels, marking its 20th year of uniting individual angel investors in the region, says its more than 140 members invested upwards of $10 million in the following companies during 2016 (descriptions from AoA):
Audience Awards—Marketplace for video content
Blokable—High-performance modular building system
BluHaptics—Controls for robotic systems
BuildPulse—Analytics for building automation systems
Crelate Talent—Relationship management
Droneseed—Drones for forestry applications
Innovative Dental Technologies—Dental hardware for dry field maintenance
Leavelogic—Parental leave management platform
otto Robotics—Robotic food production
Pillsy—Connected personal medication platform
Poached Jobs—Jobs marketplace for the hospitality industry
PotaVida—Solar water purification
Slope—Media content collaboration platform
StormSensor—Stormwater management solution
Thrive Causemetics—Purpose-driven beauty products
Transform—Revenue optimization analytics
Utrip—Artificial intelligence for trip planning
Vaporpath—Sensory coffee experiences
Visual Vocal—Virtual reality productivity platform
—Washington’s cleantech sector saw another startup acquired, continuing a trend from 2016. Enel Green Power, an Italian renewable energy giant, announced the acquisition of Liberty Lake, WA-based Demand Energy Networks, which makes software for managing energy storage and distributed energy-generation resources.