(L-R) Founding Partners McMahon, Walker, Clinton

MEMPHIS-based, early-stage-oriented Ridgeline Capital Management's Ridgeline Ventures Fund II has thus far raised nearly $28.8MM, according to its Sept. 18 SEC filing.

Records online show Fund II's accompanying Fund II GP as having been registered in Delaware and Tennessee in 4Q CY22.

Ridgeline has previously described its thesis as centered on investing in "technologies and [Seed and Series A] businesses that have the potential to transform large enterprises across both software and hardware."

Ridgeline's portfolio page shows 33 active businesses, up from 27 when we checked in 1Q23. It has apparently exited at least four businesses since formation.

VNC research indicates Ridgeline's 2024 investments thus far include Composable (SaaS platform building autonomous intelligent AI agents for industrial automation and related), Harbinger Motors (technologies for platforms of EV-powered commercial vehicles), and AI Squared (AI integration platform) -- all with coastal headquarters.

A 2022 story by Techstars said the company was then targeting early-stage companies selling to "complex organizations," and was then modeling taking 5% to 10% of ownership in portfolio companies, by writing checks of up to $5MM each.

In 3Q 2023, a Ridgeline blogpost provided interesting commentary on its continual evaluation of its investment thesis, including the AI tsunami.

Ridgeline's co-founding partners are Memphis-based Ryan Clinton MBA, Bay Area-based Ben Walker MAIS and Washington, D.C.-based Andrew McMahon MPP.

Clinton and Walker are graduates of the U.S. Military Academy, West Point, and served together in the U.S. Army, with tours including combat deployment. The Ridgeline homepage currently bears a martial theme: "Take the High Ground".

Nearly two years ago, in October 2022, Ridgeline announced closing its inaugural $52MM Ridgeline Fund I, via BusinessWire. At that time, the firm projected investing up to 30 companies through the life of the fund.

A second 2022 press release about Fund I, published separately by the firm, said the firm's advantage lies in its relationships with its "strategic corporate limited partners (LPs) -- including Fortune 500 companies FedEx, AutoZone, and Dollar General, all headquartered in Tennessee -- representing foundational industries that impact the lives of many Americans every day. These strategic corporate LPs, through investing with Ridgeline, intend to drive innovation in their organizations by conducting meaningful pilots and proofs of concept with the firm's portfolio."

In that same release by the firm, the partners included LP commentary:

"Ridgeline's thesis is shaped by the digital transformation they have witnessed over successful careers in the military and in the corporate world," said Frederick W. Smith, Founder and Executive Chairman of FedEx Corporation, and Bill Rhodes, Chairman, President, and CEO of AutoZone, in a jointly written letter. "They understand a business' need to analyze data at scale, incorporate machine learning into data flows, and integrate autonomy and robotics into operations. This value chain provides a great early-stage investment opportunity as it creates the ability to solve complex and costly business problems, in an accelerated way, creating value for both customers and shareholders alike.

"At Dollar General, we are supportive of new and innovative ways to meet the needs of our customers and better serve our local communities," said Todd Vasos, Dollar General's CEO. "We look forward to combining the experience and technologies Ridgeline will bring with our unique store footprint and reach across the country in an effort to further enhance our operations, supply chain, and both the employee and customer experience.

"Additional LPs include Staley Cates' community foundation donor-advised fund; Kevin Ryan, CEO AlleyCorp and co-founder of MongoDB; and Ray Rothrock, CEO of FiftySix Investments and former General Partner at Venrock. Advisors include Kevin Compton, Co-Founder and Partner at Radar Partners; and Michèle Flournoy, Co-Founder and Managing Partner of WestExec Advisors."

Ridgeline also said in its self-published 2022 release, in part, "...Early stage technology companies that receive investment from Ridgeline notably gain meaningful access to FedEx, AutoZone, and Dollar General."

VNC research also indicates Ridgeline's co-investors have included InQTel, Alumni Ventures, Boldstart Ventures, New Enterprise Associates, and Tiger Global Management, among more than 200 others.

As VNC previously reported, since the firm's inception in 2019, Ridgeline principals have also raised at least $13MM through special-purpose vehicles (SPVs), as well as at least $466K via a Series 6 raise.

Ridgeline is aligned with Epicenter (Vibrant Memphis) and Alchemist Accelerator's Memphis Hub, and Ridgeline GP McMahon's LinkedIn says he is an Alchemist portfolio mentor. Related story.

Reached this morning by VNC, Ridgeline management declined to comment on the latest filing. Ridgeline's curated press coverage. VNC

.last edited 1000 19 September 2024