By most measures, 2021 was a banner year for Ridgeline. We completed 15 deals, invested in 10 new companies, realized our first company exit, and held multiple closes on Fund I. Our portfolio had an equally strong year, raising over $900m in capital and hitting a median valuation of $135m, a 50% step up from the previous year.
Ridgeline has now invested across 4 countries, 10 states in the U.S., and we have 28 companies in the Ridgeline family.
As a firm, we are constantly considering our relative position in the venture community. The past year was a high watermark for the asset class that included a rapid expansion of early funds and emerging managers. The market is crowding to the point that even our original, niche thesis—helping companies navigate the federal market—has been copied by others multiple times over.
One Big Thing
With this in mind, Ridgeline has broadened its mandate to support our companies across all large enterprises customers, not just in the government market. With two core Fortune 500 LPs and multiple others in our fundraising pipeline, we are building a model where our portfolio has direct access to the largest customers in the enterprise technology market.
Coupled with this new approach, Ridgeline will be opening an office and putting down roots in a new city, Memphis. Our commitment to the Memphis community didn’t occur entirely on purpose. Like most things in life and business, it was born from a combination of hustle and circumstance. The advantage of moving operations to the region is rooted in our relationship with strategic LPs.
We also encountered a rich customer network, a talented and diverse business and academic community, and an underlying commitment to building a vibrant technology ecosystem. Ridgeline will be central to this ecosystem.
New Investments
Q-CTRL. Q-CTRL, a Sydney-based startup that provides quantum control engineering solutions, raised a $25 million Series B led by Airbus Ventures with participation from Main Sequence Ventures, Horizons Ventures, Square Peg Capital, Sierra Ventures, DCVC, Sequoia Capital China and In-Q-Tel.
Electron Transport. Ridgeline participated in a funding round for Electron Transport, a new entrant in electric mobility currently operating in stealth.
AI Squared. Ridgeline participated in a funding round for Washington, D.C.-based AI Squared. The company simplifies and accelerates AI integration to provide increased speed of model deployment and tuning.
Follow-On Investments
Satellite Vu. Satellite Vu’s Series A funding round of $20.7m was led by the Seraphim Space Investment Trust. Also investing in the round include Draper Esprit and A/O PropTech.
Portfolio Wins
Cornelis Networks won a large award supporting three U.S. National Labs under the CTS-2 contract. Most exciting was the fact that Cornelis beat out its larger competitor, Mellanox, for the deal.
Agolo won a significant deal with the Defense Technical Information Center (DTIC) enabling better information access and sharing. DTIC will leverage Agolo’s NLP technology and knowledge graph to contextualize DOD’s unstructured text data.
Replicated was awarded a Cool Vendor tag by Gartner. The company continues to carve out a valuable space in the deployment and management of software built leveraging Kubernetes.
MachineMetrics hired a new Chief Revenue Officer, John Cowan. Cowan joined MachineMetrics from Plex Systems, where he served as vice president of sales and brings a track record of successful enterprise software sales management.
Auxon announced the addition of Jeff Lemmer and Lane Desborough to its board of advisors. Jeff was formerly Vice President and Chief Information Officer of Ford. Lane has 30 years of experience implementing and remotely monitoring safety-critical automation at companies like Honeywell and General Electric.
Cape Privacy has joined the Snowflake Partner Network. As a Snowflake partner, Cape Privacy enables the unique ability for customers to run predictive machine learning models on encrypted data in Snowflake, while protecting privacy by default.
Eclypsium announced the appointment of Jarrod Bogue as Chief Revenue Officer and welcomed Arif Kareem to Eclypsium’s Board of Advisors. Jarrod joins the organization having led large global sales operations at software and hardware companies including Siemens, Hewlett Packard Enterprises, and Trend Micro.
Interesting Stuff
As is the case with most quarters, we spent a lot of time thinking about where we are, where we should be, and how we stack up against our peers. Our reading and discussions reflected that and below are some of the more interesting things that contributed to those convos.
Benedict Evans’ annual slide deck looking into macro trends is always a must-read.
Surveys and reports illuminating IT spend and CIO preferences are key for understanding a large portion of our portfolio’s customer base. These two reports, from Sapphire and McKinsey, were full of signal.
Web3 was impossible to avoid for most of 2021 and we spent a good deal of time learning and discussing this next stage. Especially helpful was Lightspeed’s Web3 ecosystem deck, a Web3 developer report from Electric Capital, and this interview that covered a lot of interesting ground including NFTs and blockchain.
We dug into this benchmark metrics blog for emerging managers from Blue Future Partners. And this blog from Hunter Walk was all around great advice for emerging managers, especially the last section on investing for quality and within a “weight class”.