Seattle-based venture capital firm Madrona released its sixth annual Intelligent Applications 40 list this week, naming 45 private AI companies (the five extras come from ties) that have collectively raised $410 billion from investors across the industry.

Three of them — Anthropic, OpenAI and Databricks — account for 92% of that total.

The uneven distribution of funding reflects a larger split in the tech industry, as the largest AI companies make huge bets on the computing capacity needed to meet demand for their models, while almost everyone else builds businesses on top of them.

The frontier labs are “increasingly funded by strategic capital from the likes of Amazon, Google, Nvidia and SoftBank rather than traditional venture,” Madrona’s Matt McIlwain and Rolanda Fu wrote in a post accompanying the list. That scale, they added, “makes every other category on this list look capital light by comparison.”

On top of that, he said, hundreds of billions of dollars are flowing into OpenAI and Anthropic.

“And what I say to both the big tech companies and to the people funding the model companies: thank you very much,” McIlwain said on Bloomberg TV, noting that the five largest tech companies will spend an estimated $750 billion in capital expenditures this year.

But even setting those big three aside, McIlwain said, the rest of the winners have raised an average of more than $800 million each. That’s a total of $34 billion combined. Companies across the list are raising far more than they used to, enough that Madrona had to redraw its own categories.

The list sorts companies by total capital raised, and this year the ceiling for “early stage” rose to $50 million, up from the $30 million threshold that held for the previous five lists. The cutoff for “emerging enablers,” its category for smaller infrastructure companies, doubled to $100 million.

“Companies across the board are raising more money, and the definition for what ‘early’ means continues to shift higher,” McIlwain and Fu wrote.

Madrona has published the IA40 since 2021 as a roster of the private companies it considers most important in building and enabling AI applications. According to the firm, this year’s list drew on input from 72 investors representing 54 venture and corporate firms, who nominated and voted on more than 450 companies, with PitchBook data factored into the scoring.

Two Seattle-area companies made this year’s list:

• Clarify, which builds an AI-native CRM, appears in the early-stage category for the second straight year, with $23 million raised. It acquired San Francisco’s Seam AI in July.
• Gradial, which builds AI agents for enterprise marketing, is a first-time winner in the mid-stage category; it raised $65 million in June at a $675 million valuation, bringing its total to $120 million.

Last year’s list included two other Seattle-area companies in addition to Clarify.

• OpenAI acquired one of them, Bellevue-based Statsig, for $1.1 billion in September 2025, making Statsig founder Vijaye Raji its CTO of applications.
• Security startup Dropzone AI, which was on the list last year, did not repeat this year.

Madrona, one of the Seattle region’s largest and oldest venture capital firms, is an investor in all four — Clarify, Gradial, Statsig and Dropzone AI — although it also invests outside the region, and many of the companies on the IA40 are not in its portfolio.

Several of the companies on this year’s list have engineering centers in the Seattle region, including Anthropic, which leased 113,000 square feet in South Lake Union this year; OpenAI, which expanded to nearly 300,000 square feet in downtown Bellevue after the Statsig acquisition; and Anduril, which employs about 560 people in Bellevue and Seattle.

Databricks, the San Francisco-based data and AI company (which leased 142,000 square feet in Bellevue this year), is the only company to appear on all six IA40 lists. That said, 23 of last year’s 40 winners returned this year, a 58% repeat rate, up from 33% the year before.

McIlwain and Fu wrote that the biggest and most established companies on the list are holding their spots, noting that “the age of experimentation is giving way to an age of enterprise readiness,” with buyers and investors “paying premiums for companies that can demonstrate real ROI.”

Madrona will recognize the winners at its IA40 Summit in Seattle on Sept. 29 and 30.

Updated with Matt McIlwain’s comments to Bloomberg TV.

The co-founders of Pro.com, the Seattle-based home-improvement marketplace acquired by Opendoor in 2021, are back with a new company targeting what seems on the surface a very different kind of market: AI-powered software for the wealth management industry.

But Rajalakshmi “Raji” Subramanian and Matt Williams say the new challenge matches the same pattern: a huge industry held back not by a lack of customers, but by a shortage of professionals and tools.

Their Seattle startup, OnTrade, co-founded with former Bank of America chief investment officer Zachary Harl, has been operating under the radar since 2024, raising an undisclosed amount of funding from General Catalyst, Madrona and angel investors.

OnTrade’s chief technology officer is Jean Bredeche, who co-founded Quantopian, the algorithmic trading platform, and later served as a director of engineering at Robinhood.

How it works: OnTrade connects software that financial advisors already use — including CRM, portfolio accounting, trading, and compliance programs — into a single interface.

It then deploys AI agents to handle the type of work that advisors have traditionally done manually, such as scanning portfolios for tax-loss harvesting opportunities, flagging accounts that have drifted from their targets, or drafting proposals and reports for clients.

The humans approve everything before it reaches a client. The idea is to help them serve more clients without sacrificing the quality of their work, expanding access to wealth-management services that tend to be concentrated among more affluent households.

“Wealth management, if you look at the industry, does not have a demand problem; it has an access problem,” said Subramanian, the company’s CEO, in an interview. “Many people who’d like access to wealth management don’t have access to wealth management, and that’s what we’re here to solve.”

Harl, OnTrade’s chief investment officer, called raw foundation models the “brilliant PhDs” of the AI world — impressive on paper, but not as valuable to a specific industry such as wealth management until they understand its portfolios, policies, compliance rules, and client relationships. Vertical AI solutions like OnTrade, he said, are better positioned to connect that general-purpose intelligence to a specific firm’s data and workflows so the technology can do trusted work.

Industry shakeup: OnTrade is emerging at a pivotal moment, two days after investment giant Vanguard agreed to acquire wealth-management platform Altruist reportedly valued at $4 billion. OnTrade’s founders cite the deal as validation of the vertical AI opportunity they’re pursuing.

In a LinkedIn post Thursday, Subramanian wrote that the Vanguard-Altruist deal signals something bigger than a battle over where advisors park their clients’ assets: that capturing the opportunity “requires a new operating model rather than AI-enhanced versions of today’s applications.”

The wealth management industry’s unit of scale, she wrote, is shifting “from the number of people a firm employs to the intelligence and agency it can deploy.”

The founders: Subramanian joined Amazon in the late 1990s as an early engineer who helped build Amazon Marketplace and AWS, and later led the digitization of books for Kindle.

Amazon was where she met Williams, who had founded a startup called LiveBid that Amazon acquired in 1999. He spent 11 years there, including a stint as a technical advisor to Jeff Bezos, then left to run Digg as CEO and served as an entrepreneur in residence at Andreessen Horowitz.

Subramanian went on to run engineering at Yahoo Finance, where she helped open up market data that had previously been the province of institutional investors, giving her an early look at the problem that OnTrade is now aiming to solve.

In 2013, the two co-founded Pro.com, a tech-driven home improvement marketplace that raised early funding from investors including Madrona, Maveron, Bezos and Andreessen Horowitz.

Real estate tech company Opendoor acquired Pro.com in 2021, and brought both founders on as executives — Subramanian as chief technology officer, Williams as head of the Pro.com unit and senior vice president of retail.

Harl spent many years at Bank of America, rising to chief investment officer, where he managed the bank’s asset portfolios and large balance sheet risks across multiple market cycles. He is a chartered financial analyst (CFA), with a math and computer science degree from Indiana University, and a statistics degree from the London School of Economics.

He served on the U.S. Treasury Borrowing Advisory Committee under Secretaries Steven Mnuchin and Janet Yellen, advising on debt management, before joining Opendoor in 2023 as chief risk officer. That’s where he met Subramanian and Williams, before making the startup leap with them.

Traction and competition: The company’s technology is already in use at firms ranging in size from boutique advisories to large national practices, said Williams, the company’s president.

He said one client used the platform to win a billion-dollar family office account, and that another recouped the full annual cost of the platform in less than 30 days. He called that “a small window into what’s going to happen on a larger scale.”

The wealth management software market has many established players — such as Orion Advisor Solutions, Envestnet, and Addepar — but the OnTrade founders say they see them as partners, not rivals. OnTrade integrates with those systems rather than replacing them.

That distinguishes the company from Altruist, the Vanguard acquisition target, which built its own full stack, including its own custodian, the financial institution where client assets are held. That approach requires firms to move client assets onto its platform.

OnTrade doesn’t ask firms to replace their existing tools or move their clients’ money. Instead, it plugs into what’s already there.

The broader timing may work in their favor. As baby boomers age, an estimated $50 trillion or more in assets is expected to pass to younger generations in the coming decades — creating a wave of new clients who will need financial advisors, and new pressure on firms to serve them.

That’s where home improvement and wealth management have something in common.

“There aren’t many bigger places, other than health, wealth and real estate, where you can impact a population, especially an underserved population,” Williams said. “That was at the heart of the motivation.”

This week on the GeekWire Podcast: What should Liverpool FC fans expect from Jeff Bezos as a member of the storied English Premier League club’s new minority ownership group? We consult the Amazon leadership principles for the answer.

Plus, a tip and an SEC filing lead to a scoop on a former Meta AI director’s new startup, the GeekWire Editorial Board convenes to decide whether Dave Clark’s Auger stays on the GeekWire 200 after moving its HQ to Dallas, and Microsoft quietly semi-retires its AI blob.

Related Stories and Links

Bezos and Liverpool FC

• Group including Jeff Bezos buys minority stake in Liverpool FC, with option to become controlling owner — CNBC
• Liverpool: FSG sell minority stake to Amazon founder Jeff Bezos-backed consortium led by Amit Bhatia — Sky Sports
• Bezos, Bhatia buy a stake in Liverpool: What does it mean for the club and FSG? — ESPN
• Bezos, Bhatia, Saverin buy Liverpool stake at $7 billion valuation — Sportico
• The Redmen TV — independent Liverpool FC fan channel

Noosphere and the Form D

• Ex-Meta AI research director raises $10.25M from Trilogy and Madrona for stealth physical AI startup
• Kevin T. Carlberg — founder’s research site

Auger and the GeekWire 200

• This former Amazon exec is moving his startup’s HQ to Texas, and he has a few notes for Seattle
• Dave and Leigh Anne Clark move Auger headquarters to Dallas — D Magazine
• GeekWire 200
• Seattle Engineering Centers
• New map traces Washington state’s tech ‘universe’ to a few key hubs, and shows what’s at risk
• ‘We can’t become callous’: KIRO hosts debate what a startup’s departure to Texas says about Seattle’s business climate — MyNorthwest

Microsoft and Mico

• Farewell, Mico: Microsoft’s cute little AI blob is going the way of Bob
• Microsoft starts merging its Copilot consumer and business apps in advance of ‘Super App’ rollout

Subscribe to GeekWire in Apple Podcasts, Spotify, or wherever you listen.

A former Meta AI research director has raised $10.25 million for a Seattle-area startup working on what it calls “human-centered physical intelligence” — AI designed to help people interact with and make sense of the physical world, beyond text and images on screens.

A company called Noosphere Labs, led by Kevin Carlberg, disclosed the financing in a Form D filed Monday with the Securities and Exchange Commission. Reached via phone by GeekWire on Monday evening, Carlberg said he wasn’t yet ready to share details about the startup.

Trilogy Equity Partners confirmed that it led the round. One of the directors listed in the Form D filing is Amy McCullough, a managing director at the Bellevue-based venture firm. Madrona, the Seattle VC firm, separately confirmed that it had “major participation” in the round.

Carlberg’s personal website describes him as founder and CEO of a “stealth AI startup focused on physical AI and real-world intelligence.” The company’s website says, “Human-centered physical intelligence. Built for the world we inhabit,” with a “Coming Soon” title.

The website styles the name Noösphere, with two dots over the second “o” signaling that it’s pronounced as a separate syllable: NOH-uh-sfeer. The term dates to the 1920s, describing a sphere of human thought wrapped around the planet the way the biosphere wraps it in life.

Carlberg spent more than five years at Meta, where he led a research team spanning Reality Labs Research and the company’s Fundamental AI Research group, working on physical AI and simulation for wearable computers and virtual and mixed-reality devices.

Before that, he spent eight years at Sandia National Laboratories developing methods to make massive physics simulations run in near-real time for national security applications. He holds a doctorate from Stanford and is an affiliate associate professor of applied mathematics and mechanical engineering at the University of Washington.

Although Carlberg hasn’t publicly detailed what the new startup is building, his research points to the problems he’s been focused on.

In a paper for the NeurIPS conference last year, for example, he and his Meta colleagues built a benchmark for “assistive wearable agents” — smart glasses and similar devices that figure out what a person is trying to do from video, audio and other signals, without being asked.

Noting how little prior work existed, they assembled a dataset from 348 participants to test it. The best AI models produced a relevant answer only 55% of the time, they found. The researchers concluded that current models “remain far from practical usefulness” at the task.

Also listed as a director in the startup’s filing is Tyler Simpson, a Seattle-area software executive who co-founded commute-management startup Luum, spent 11 years at Microsoft, and was most recently a director and technical program manager at Meta, overlapping with Carlberg.

Carlberg left Meta at the end of 2024 and announced on his website that he was taking a sabbatical. He incorporated Noosphere Labs early this year.

Attending as many Seattle Tech Week events as possible and talking with as many people as I could, I was struck by the number of people looking for work and the volume of visitors from the Bay Area, including a number of investors looking to get a sense for what the regional tech scene is about.

It was hard not to imagine them being impressed with the sheer level of engagement and enthusiasm, even if they didn’t happen to catch Jacob Colker’s rallying cry. With more than 250 events (and waiting lists for many of them) it was more than any one person could take in.

It wasn’t Seattle AI Week — that’s still to come in October — but given the moment in tech and the world, the topic of artificial intelligence was naturally the main throughline of the week.

A panel that changed my perspective was early in the week, called “Foundation Models Go Vertical,” hosted by the Seattle pre-seed firm Ascend at Washington 1000 downtown. Founding general partner Kirby Winfield told the room that 600 people had tried to get in.

One of the biggest insights was from Manos Koukoumidis, CEO of Kirkland-based Oumi and a former Google Cloud AI engineering manager who led large language model efforts there.

Companies that are racing to build on top of the frontier models, he said, are renting a kind of intelligence that has very little to do with their own businesses.

“Enterprises are using a model that is trained on 5% of the world’s data that sits on the web, not the other 95%,” he said, referring to the data sitting inside their own organizations.

Which led him to the question (and the point) that I keep coming back to: If the intelligence at the center of the product belongs to someone else, he asked, “are you really an AI company, or an application company on top of somebody else’s intelligence?”

The next day, in the audience for a recording of the Founded & Funded podcast by Seattle Tech Week organizer Madrona, I posed the question that we debated on last week’s episode of our GeekWire Podcast: what should Seattle founders and investors make of venture numbers that rank Philadelphia, Austin, and New York ahead of them?

It was the right place to ask, given that the show featured Nizar Tarhuni, EVP for research and market intelligence at PitchBook, which tracks the numbers, and Madrona partner Sabrina Albert.

Albert pointed out that the numbers don’t capture everything. A company can have a big engineering group in Seattle, or even a co-founder here, and still be counted as a Bay Area company, she said. Large engineering offices for OpenAI and Anthropic are the latest examples.

Tarhuni made a similar point: “There’s so much talent in some of the biggest unicorns that are actually working out of Seattle,” he said. In terms of overall economic activity, he added, “there’s a lot more here that doesn’t make its way into those numbers.”

Other quotes and insights that stood out from the sessions we attended:

Patrick Thompson, CEO of Seattle-based Clarify, said his company’s Anthropic bill had tripled in three months. He has shifted spending to AWS Bedrock, citing reliability problems, and now runs smaller models locally on his own laptop for low-level work.

Madrona’s Albert, on the shift to selling outcomes: “Before, when you were thinking about traditional software, you would charge for a seat or a unit of software. But now you can really fundamentally change it. … If I deliver this outcome for you, then you can actually pay me for it.”

Ken Horenstein, founder of Pack Ventures, which invests in startups tied to the University of Washington, on the knock that Seattle is slow: research institutions here are “choosing problems that are 10, 15, 20, 50-year problems,” he said. “Sometimes people put that as a negative rap on us because we don’t go really fast and flame really bright like you might see in other markets. But I actually think that can be used as a benefit.”

Ben Gaffney, deputy general counsel at OpenAI, on the notion that AI is thinning out headcount: “Even within the legal team that I work in, we need more people. Even though we’re getting all these massive productivity gains, it isn’t like you don’t need people to supervise this stuff.”

Brian Hall, the longtime Microsoft, AWS and Google executive who became chief marketing officer at Mistral AI in June, on where this all ends up: “We’re gonna laugh when we thought that AI was gonna save us time.”

Ascend’s Winfield, on the limits of what investors provide: “If I invested in you, it’s not because I’m smart about your market. It’s because you’re smart about your market. … If you’re looking for answers from your investors, you’re in trouble.”

Karl Siebrecht, co-founder and CEO of Flexe, at a networking event, telling founders to stop networking: “Spending time as a founder trying to market yourself to investors, I think, is a fallacy. If you focus on building a valuable company … I can promise you, investors will find you.”

Molly Klein, founder and CEO of Perk Events, who runs some of GeekWire’s biggest events, on why any of this happens in the first place: “Events are hands-down the strongest business development tool that you have,” she said. “One conversation may take six emails in three weeks. At an event, it happens in 10 minutes, because you’re getting that face-to-face time.”

That pretty much summed up the week.