Ridgeline Quarterly Update
Updates on deals, portfolio news, and interesting things in our world
One Big Thing
Yesterday, there was an exciting announcement that came out of the Memphis start-up ecosystem. Alchemist Accelerator is launching the Memphis Hub Accelerator Program, its first U.S. location outside of Silicon Valley, in partnership with Epicenter Memphis.
In terms of our role in the region, this is exactly the type of partnership and program we were hoping to ignite while operating in the city. We collaborated with Epicenter from day one on the development of this partnership. It has the potential to create incredible value for the entire start-up ecosystem and seed the next Memphis-based publicly traded company.
Alchemist operates a 6-month, equity-based, enterprise-focused acceleration program for startups, with three classes of 20-30 companies per class each calendar year. Ridgeline will assist Epicenter and Alchemist in recruiting companies for the Memphis Hub. Epicenter will host the participants at its downtown incubation space and provide access to the Memphis community for local resources, potential customers, and networking.
The Memphis Hub Accelerator Program will streamline access to Alchemist’s accelerator for firms that are either located in Memphis or that are interested in relocating and/or opening a new office in the region because of potential customers or industries located there.
The Memphis Hub will reserve space for and recruit 9 startups per year (3 per class) into Alchemist Accelerator’s global program, and the next two cohorts will start in April and August 2023.
Companies interested in applying to the Memphis Hub Accelerator Program can visit https://www.alchemistaccelerator.com/apply
New Investments
Sourcefield. Ridgeline made an investment in Sourcefield, a developer tool that enables teams to understand the risks of shipping code on production systems and more efficiently run quality assurance and security reviews.
Eion. Ridgeline co-led the $12M in Series A financing for Eion, a Princeton, NJ-based permanent carbon removal technology company. The round was co-led by AgFunder with participation from Sibelco, Carbon Removal Partners, and Trailhead Capital.
Multiscale. Ridgeline participated in the Series A financing of Multiscale, a software platform that increases R&D productivity and velocity of new product development for material sciences.
Portfolio Updates
Satellite Vu, a UK based satellite company for thermal monitoring, signed a second launch contract with SpaceX. The company also hired Camilla Taylor as CFO to support the growth of the company.
Wallaroo partnered with the Detroit Lions to scale the use of AI to enhance everything from on-field performance to the year-round fan experience.
Replicated, container-based platform for quickly deploying cloud native applications to any environment, completed its SOC II Type 2 audit.
Interesting Stuff
Round sizes in venture have reset across all rounds, even down to the earliest stage. We are now seeing Seed rounds at $3-4m and Series A at $8-12m with valuations reflecting 15% - 25% dilution on capital raised. There are two interesting questions for founders to consider in this new market, 1) what KPIs do investors expect to see at each round, and 2) what do outlier companies look like for these metrics. We really like the simplicity of the SaaS Funding Napkin and a16z put out a helpful tool to understand where [enterprise] companies stack up.
One metric that was on the back burner for much of 2021 and 2022 has come back into diligence conversations in a major way: burn multiple. A measure of capital efficiency, David Sacks from Craft Ventures does a great job of summarizing how to measure, why to measure, and some of the nuance of the metric.
We paid close attention to experienced commentary on the market slowdown and how venture firms should respond. We kept coming back to Mark Suster’s post from September, laying out a binary decision framework. VCs can either get big or get focused to remain competitive. This blog from Jordan Nel at Hummingbird VC was very thoughtful, presenting a shift in which type of investor would perform well in this market.
And last, in the context of the prominent implosion of FTX, we thought Hunter Walk’s blog on how FTX’s investors were spinning the loss and why much of it was misleading was a spot on assessment.