Pioneer Square Labs has raised an additional $15 million to support the growth of its startup studio model that spun out nine companies in two years.
Previous investor Foundry Group led the round, which also included participation from PSL’s 12 existing venture capital and 60 angel investors — a who’s-who list that includes firms like Bezos Expeditions, Greycroft Partners, and Madrona Venture Group, in addition to individuals like Expedia and Zillow founder Rich Barton, former Concur CEO Steve Singh, and ARCH Ventures co- founder Bob Nelsen.
Founded in 2015, PSL uses a unique innovation model to rapidly test and validate new ideas before recruiting an executive team to build out a spin-off company. It starts with an original idea and spends roughly four months to quickly validate it, using its investment dollars for financial support. Then it recruits an appropriate executive team to build off the work that’s already been done and ultimately spin the new startup out of PSL into its own entity.
PSL has worked on more than 80 ideas in the past two years and launched nine startups that have a collective equity value of $100 million, six of which have been publicly-announced:
LumaTax, a company that aims to automate sales tax reporting for small businesses.
Jet Closing, an app that helps streamline the real estate closing experience.
AdLightning, which helps digital publishing outlets scan their sites for disruptive ads.
Boundless, a startup that aims to help people navigate the U.S. immigration process.
Taunt, a platform that lets esports fans compete against each other.
TraceMe, an app that helps connect celebrities with “superfans.”
PSL raised $12.5 million when it launched; total funding is now $27.5 million.
The fresh funding is separate from cash that PSL is raising for its new venture capital arm that GeekWire first reported about last month. An SEC filing showed an initial $40.8 million raised for the venture capital fund; sources tell GeekWire that PSL may use the fund to back its own spinouts. PSL declined to provide more details.
The studio, which employs more than 20 people, hired Julie Sandler this past June as its fourth managing director, joining Greg Gottesman, Geoff Entress, and Mike Galgon. Sandler was previously a partner at Madrona, where Gottesman had served as a managing director for 18 years and helped launch a similar startup studio called Madrona Venture Labs.
PSL has also added other talent to its team in recent months. In October it brought on Haiku Deck co-founder Kevin Leneway; last month it hired longtime technology executive and entrepreneur Jamie Miller as an entrepreneur in residence.
“I would encourage every entrepreneur in Seattle to check out what Pioneer Square Labs is doing,” Foundry Group Managing Director Brad Feld said in a statement. “We are excited about what’s going on in Seattle and think PSL is at the center of it.”