Two weeks ago, AI Squared announced their $13.8m Series A round led by Ansa. The round reflects the growing demand for AI within legacy enterprises without disrupting the use of existing workflow tools and products. AI Squared allows customers to seamlessly embed AI outputs into applications that analysts, sales professionals, and security engineers (among others) use day in and day out.
AI Squared’s product deploys a model into existing applications that are used enterprise-wide. This capability meets a massive need in the enterprise AI market where large corporations are racing to get AI in the hands of internal users but with the same trust, security, and usability that they have with existing software applications.
AI Squared has seen rapid growth, landing major logos across finance, government, security, and CPG. They are filling gaps on both the data science and business sides of their customer base. The capital will help the company move at the speed of demand, hardening the product and transition potential customers from pilot phase to full production in shorter timeframes. The company has already added key GTM leadership and has partnered with an excellent firm in Ansa to support this next chapter.
Ben Harvey, CEO of AI Squared was interviewed by Forbes regarding the fundraise and discussed many aspects of the company’s journey to date and product capabilities. We recommend watching to better understand the value proposition AI Squared provides to the market.
We’re thrilled to have both Allan Jean-Baptiste, General Partner at Ansa, and Roger W. Ferguson, former Vice Chair of the Federal Reserve join the board of directors. A huge congrats to Ben and the rest of the AI Squared team on this milestone!
One Big Thing
Harbinger opened its new headquarters and manufacturing facility in Garden Grove, CA. This marks a major milestone and a new chapter for the company in its pursuit to electrify the medium duty commercial vehicle class. This quarter, Harbinger completed the first delivery of chassis to three different paying customers and have achieved the start of revenue.
Motor Trend covered the partnership in a great article highlighting the opportunity in this market and the innovative features of the ADAS system that Harbinger has designed and is agnostic to the type of vehicle combined with the Harbinger chassis.
We recommend watching the video in the post linked to the image.
Harbinger continues to be one of Ridgeline’s highest performing investments, consistently delivering ahead of plan on major milestones for the company while maintaining strong capital efficiency.
“We’re excited to officially celebrate the opening of our new manufacturing facility here in Garden Grove,” said John Harris, CEO of Harbinger. “While we’ve already delivered our first all-electric truck chassis to customers, this ribbon cutting marks a significant milestone for our company – and for the future of electric vehicles. We’re proud to call Garden Grove home, a state at the epicenter of the U.S. electric vehicle revolution.”
Portfolio Updates
Eclypsium's Digital Supply Chain Security Platform Releases AI-Assisted Binary Analysis Engine
Q-CTRL Partners With USGS To Pioneer Quantum Sensing And Computing Applications
From the Blog
Interesting Stuff
Building a venture capital firm is an exercise in context switching. In one day, you can move between firm administration, portfolio support, investment due diligence, and fundraising for the next fund. These “contexts” ebb and flow over months and quarters, at times consuming most or nearly all of your time and attention on a given day or week. Ridgeline is building Fund II and we’ve been digging into a lot of writing about what LPs are thinking, how they are evaluating firms, and the signals they are looking for in a great firm and fund.
One maxim in venture is to focus on your winners, as returns come from a very small percentage of invested capital in comparison to other assets classes. This post from Correlation Ventures highlights this fact quite clearly. And this post from Jason Shuman at Primary Ventures digs into those winners a bit more deeply. Our key take away is that great firms are very different than good firms if you take into consideration the profile of their winners.
Samir Kaji is one of the key voices bridging the GP-LP divide (highly recommend his podcast). In one thread (below), he touches on the multiple incentive mismatches between smaller funds and larger allocators. We found this to be valuable to understand where to spend our time and—when we did find a larger, institutional firm that was willing to invest in a small, emerging manager—how to lean into the best messaging.
Finally, this blog from StepStone was an interesting view from the other side of the table in how to build a portfolio with small and emerging managers to drive outsized returns.
On the portfolio management side of the house, we continue to dive into value driving activities for our investments while keeping a close eye on how they are performing quarter over quarter. While key operating metrics can and should differ across individual companies and technology categories, one metric that is germane across all startups is “cash-burn”. We look very close at this metric (defined as net monthly operating cash burn rate), which made the post (linked to image) from Kyle Poyar at Growth Unhinged very informative. These numbers are for SaaS companies so less relevant for our hardware or deep tech start-ups, but quality data nonetheless.
We found this post on the downside of PLG-everywhere from Mehdi Boudoukhane, CEO of Cycle, to be really excellent. He thinks that the focus on PLG leads many founders to over-prioritize product as the mechanism to find product-market fit.
AI continues to be a big topic of conversation at Ridgeline and where value might accrue as the technology matures has been central to those conversations. Tomasz Tunguz from Theory Ventures thinks that data may invert the business model of the internet. He used the Reddit IPO and the growing revenue stream of data sales to LLM developers to highlight the point. Marc Benioff, replying to Josh Miller’s post in the tweet below, seems to agree.
Finally, Index Ventures released an amazing tool + dataset showing where certain portfolio companies of theirs were from a people standpoint across a number of factors.
Q2 is setting up to be a key quarter for Ridgeline and the portfolio. We are excited to share the next chapter with all of you who take your time to read and engage.