McAndrews

We've been wondering when Brian McAndrews -- the former aQuantive CEO who joined Madrona Venture Group as managing director last summer -- would make his first investment as a venture capitalist. Well, that day has come, though McAndrews' first publicly announced deal involves a startup on the East Coast.

Madrona today led a $7 million investment in Searchandise Commerce, a 2-year-old Beverly, Mass.-based startup which helps manufacturers secure "virtual shelf space" on leading online shopping sites while at the same time helping retailers derive online ad revenue from the product manufacturers.

The investment is interesting on a few levels, in part because Madrona typically backs early-stage companies that are based in the Pacific Northwest. It usually likes to find those companies very early in their life cycles, coming in as the first institutional money. [Post updated with comments from McAndrews]

However, not only is Searchandise located on the other coast, but the company previously raised $7.5 million from a syndicate of investors that includes Cloquet Capital Partners, DFJ Gotham Partners, Draper Associates, Inflection Point Ventures, Milestone Venture Partners and Wheatley Partners.

The deal also is interesting in part because of Madrona's deep history with Amazon.com, where Tom Alberg still sits on the board. A service such as Searchandise could be a very interesting match in terms of a new revenue source for the world's largest online retailer.

Madrona has invested in other startups that are outside the Pacific Northwest, most notably an investment in New York-based online slide slow company Animoto. (However, the founders of Animoto all graduated from Bellevue High School, and Madrona co-invested with Amazon.com).

At a recent industry event, Madrona's Matt McIlwain told me that the firm remains very much committed to local companies, so I'd presume that a later-stage investment in a Boston area company doesn't necessarily suggest a big strategy shift.

McAndrews wasn't immediately available to comment, but a spokeswoman for Madrona said that he was introduced to the company through relationships with the CEO and a board member. Searchandise is led by John Federman, who previously served as CEO of eStara, Dotomi and AdSmart. He's also the former publisher of PC Week.

As a result of the investment, McAndrews -- who is best known for selling online ad giant aQuantive to Microsoft for $6 billion -- will be joining the Searchandise board.

“Industry trends show that more consumers are turning to the Web to research products for both online and offline purchase, and they search retail sites 25 percent more than search engines,” said McAndrews in a release. “Manufacturers and retailers are trying to create the best online experience possible for consumers while pulling every lever to help monetize retailer space and increase manufacturer sales. Searchandise has a great service and a great team that is focused on, and gaining significant momentum in, this huge market opportunity.”

More on how it works in this video, which explains how online retailers can turn their sites into bigger profit centers.

UPDATE: In an email response this afternoon, McAndrews admitted that Searchandise isn't necessarily in the "sweet spot" of where Madrona typically invests. However, he said the deal made a lot of sense for a number of reasons, including the management team and the big market opportunity.

"In our due diligence, we spoke to advertisers and retailers who were using the Searchandise offering, and it was clear that the offering is compelling and it is unique in the marketplace. In fact, no one we spoke to was aware of any similar offering," said McAndrews. "Secondly, the company was in a space – online advertising and e-commerce - where Madrona has significant domain expertise; and finally, I had pre-existing relationships with several key people involved with the company. When these types of ingredients come together in a potential investment, we are definitely open to making investments outside the region."

McAndrews declined to comment about any possible relationship between Searchandise and Amazon. But he did say that the company partners with "many of the top 10 Internet retailers and leading comparison shopping sites."

He then offered some pretty impressive traffic numbers for Searchandise, whose network attracts 240 million visitors, 100 million unique visitors and 720 million page views per month. Plus, he said, the network is growing.