Kristin Myers: Now, for decades, investment firms have grown in a pretty predictable way: more money to manage, more clients, more people, and more software.
But artificial intelligence could change that equation.
Software firm Ridgeline is betting that the next generation of investment firms won't just use AI to answer questions. They're going to use it to actually do some of the work.
And investors are making a big bet on that vision.
The company just raised $250 million, valuing Ridgeline at nearly $1.5 billion.
So what does an AI-native investment firm actually look like? And what happens to the people doing the work today?
The road from an idea to the Stock Exchange starts right now.
Wall Street manages trillions of dollars, but behind the scenes, many investment firms are still wrestling with old technology, disconnected data, and increasingly complex operations.
And Ridgeline CEO Dave Blair says the status quo no longer scales.
So Ridgeline is betting AI can change this.
The company has built a cloud-based platform that brings investment firms' data and workflows together, giving AI the context to do more than just answer questions.
And the goal: put AI to work automating repeatable tasks, creating capacity for employees, and keeping humans in control of the decisions that matter.
And investors are buying the pitch.
Ridgeline recently raised $250 million at a $1.5 billion valuation, with some of its own customers investing in the round.
So here's the billion-dollar question: Can Ridgeline turn AI into the operating system for the modern investment firm and build the next billion-dollar name in financial technology?
From Startup to Stock Exchange, Dave Blair is next.
And joining us right here at the desk is Dave Blair, CEO of Ridgeline.
Dave, thank you so much for joining us today.
Dave Blair: Thank you, Kristin, for having me. I'm excited to be here. It's my first time on the floor of the New York Stock Exchange.
Kristin Myers: First, but it's definitely not going to be the last. We're going to be chatting a little bit about that.
So, as everyone just heard, Ridgeline is essentially helping investment firms really almost ditch old technology, if we can call it that, and really come into the 21st century.
Now, you recently said that the status quo no longer scales.
Talk to me a little bit about what that exactly means and what's broken about the way that investment firms are essentially operating today.
Dave Blair: Correct. I mean, the industry has really never went to cloud. It's been stuck on legacy systems that are 20, 30 years old.
I helped build some of them. They were great in their time period.
But as firms have evolved, and there is some great data from the Boston Consulting Group, basically firms' revenue is growing and their costs are growing in lockstep with their revenue.
In fact, their costs are growing faster than their revenue, and that's not a place anyone wants to be.
Luckily, we've been in a good market. That market changes, now your costs continue to grow.
There's also, on the wealth side, people need to manage more relationships. There's a lot of advisors retiring, and they need to manage more relationships.
And in the past, the technology fragmented. It didn't really come along.
Now there is a change in the paradigm with AI and with Ridgeline and what we're able to do with that.
Kristin Myers: So to that point, with the costs that are growing, will AI essentially help bring down some of those costs?
Dave Blair: We think AI is going to bend the curve, and we know it is based on what we're seeing in our results.
You look at, and it's pretty mundane stuff, like reconciliation.
You know, why are you spending time reconciling? AI can do this work.
And what we really want to do is get folks focused on picking investments, managing investment strategies, and helping people reach their goals.
Kristin Myers: So we're going to dig into, I guess, some of those mundane things, as you're calling it, some of that software, in just a second.
But I want to ask you about Ridgeline.
As I mentioned, $250 million in new capital has recently been raised by Ridgeline. Congratulations. Valuation of just under $1.5 billion.
So what is the plan with the new capital? Why that raise now? What are the plans going forward with some of that new investment that you guys have?
Dave Blair: Yeah, we are thrilled to raise the capital that we raised.
It was led by Dave Duffield. Dave Duffield is our founder and our executive chair.
Dave and I meet most Mondays in Incline Village in Lake Tahoe. If you ever want to find us, you can find us having breakfast.
And go back to October, Dave and I discussed, you know, we're in a paradigm change here with AI, very much like cloud, like mobile.
You know, you can go back in time, and Dave has been a master of catching these paradigm changes, first with PeopleSoft, which was bought by Oracle, and then Workday, which is still one of the larger software companies.
And we said, this is a time to pour on gas.
You know, we can catch this paradigm change. We can really enable our customers to continue to find a lot more efficiency than they have.
So we decided to look at this capital raise, and I can get into where it's going.
Kristin Myers: No, please tell me. Say more. What are you guys planning to build next?
Dave Blair: Yeah, well, we're obviously investing heavily in AI and how AI enables our customers to produce outcomes.
We are expanding into Canada and into Europe.
We also continue to build out our asset-class expansion.
You know, we're a multi-currency, multi-asset trading system, accounting, reporting. So we solve the whole gamut of problems.
We are the operating system for an investment manager.
So we continue to invest across the board, as well as AI and European and Canadian expansion.
Kristin Myers: Now, here's what I found pretty interesting.
It sounds like from this raise, a lot of the Ridgeline investors are also customers and clients.
So what's that really telling? It seems like a very strong endorsement.
But what does that really say to you, that the folks that are using your software are also the ones that want to invest in it and invest where it goes next?
Dave Blair: Well, we really focus on outrageous customer service.
You know, we're founded on a set of core values, customer service, employees kind of being at the top of the heap in what we do.
And it's something we look at in every board meeting. Where is our customer satisfaction? We want those customers to be happy.
The fact that they choose to invest and be with us on the long-term journey, it goes to a spirit of partnership that we want to have.
We don't want to have a transactional relationship.
We think in terms of 10 and 20 years out because we know switching is hard in this business.
Kristin Myers: All right. So looking under the hood a little bit, a few years ago, every company was saying they were a tech company.
Now, a lot of companies are saying that they use AI or are AI-enabled.
Ridgeline says that it is AI-native.
What exactly does that mean? And what does that mean for Ridgeline, that you guys are using AI? How is that different than just having an AI layer on top of what you guys already have?
Dave Blair: Yeah, it's a great question. It's the question everybody asks.
And I think it starts with the unified data model.
So if you're layering AI on the top, you are, by definition, integrating data from different sources.
Those sources come with different timeframes. You're trying to manage unique relationships.
We have a single data model.
So an AI can get context, whether from the CRM, the customer relationships, to the trading, to the performance, to the accounting, and can bring that together.
Deterministic workflows matched with probabilistic workflows.
Nobody wants their trading to be 95% accurate.
And AI, by definition, is a probabilistic machine, right?
Kristin Myers: So talk to me a little bit more about that unified data foundation.
Why can't you just layer AI on top of the existing systems, right?
What does the change really mean, that there's this sort of unified data structure at the core of everything?
Dave Blair: Well, I can give you an example.
Trading systems tend to operate on today, and they are a siloed application.
Your accounting, performance, reporting operates on yesterday, so to speak.
And so now you're starting to match different timeframes, different data.
Ridgeline just has Ridgeline data.
So you're not trying to tie together different things and knowing, is this the right time? Is this accurate? Is it not accurate?
And we have APIs and a surface area, so to speak, that AI can operate on without batching large groups of data across the wire, so to speak.
Kristin Myers: So talk me through, let's say I'm an investment firm. I've now got Ridgeline software.
What's something that I, or perhaps employees at my firm, were doing before that now software is going to be doing?
Dave Blair: A couple of great examples.
Dealing with your customers, your clients.
So you want to know about your clients.
We're able to integrate data both from within the firm and outside the firm, so we can integrate to other sources of data.
Now, as I like to say, we want you to know your client better than they know themselves.
And that could be searching the web, finding out, hey, they invested in a foundation, maybe they're doing this kind of charitable work, as well as pulling all of the data Ridgeline has.
And then there's other stuff like recon and trade compliance, where we're just stitching a lot of data together to give context.
Kristin Myers: Okay, so I'm a little bit curious.
I'm going to sort of jump ahead a little bit, or actually jump backwards, into something that you had mentioned a little bit earlier, which is in terms of the expansion plans, moving over to Canada, dealing now with different currencies, all these sorts of different countries.
How does that change working globally, since AI is regulated differently in the United States than it is elsewhere?
I know, at least with Europe, for example, even data privileges are handled incredibly differently.
So how are you sort of managing that global expansion, considering the regulatory environment is incredibly different?
Dave Blair: The regulatory environment is definitely different, and it is evolving quickly.
You know, we pay a lot of attention to it.
Our trust, security, compliance team is constantly staying up to speed.
And what's appropriate for the U.S. might not be appropriate in other jurisdictions.
You know, for example, we know our customers have their data outside of the U.S.
If they're Canadian, they're going to be outside of the U.S. for their data structures and AI.
We continue to monitor and see how the regulatory environment is evolving.
Kristin Myers: Now, here is the problem that Ridgeline is trying to solve.
An investment firm may look like one business from the outside, but behind the scenes, managing money can require a patchwork of different systems.
There's one for portfolio management, one for trading, another for compliance.
Then there's a system for accounting and yet another for client reporting.
But those systems don't always talk to each other.
And because they don't share the same data or even speak the same language, that means people can end up moving information between systems, reconciling differences, and checking the same data again and again.
Now, Ridgeline's bet is that if those functions all lived on one platform with one data foundation, AI does not have to search across a collection of disconnected systems.
It can understand the data, the workflow, and the context around the task.
So the idea is simple: fewer silos, one data foundation, AI built into the work.
We're back now with Ridgeline CEO Dave Blair.
So, Dave, as we were sort of just discussing how all of this AI can work together, I'm going to ask the question that usually comes up anytime we mention artificial intelligence, which is that if AI is allowing an investment firm to handle more money and more clients, but not add people at that same rate, doesn't that essentially mean fewer jobs going forward?
Dave Blair: Good question.
I mean, I take the opposite stance. It's abundance.
You know, we heard six months ago that we weren't going to need software engineers, and it turns out the software engineering market is hotter than ever because the ability to do more drives more need.
And I think the same thing with investment management.
I go back, people want to manage money and they want to invest in their relationships.
They don't want to be doing recon or spending an hour looking up compliance stuff.
And so AI, I think, will allow firms to do more.
It doesn't mean more with fewer people, just to do more.
Kristin Myers: So essentially then, we're talking about capacity, that AI is going to be able to increase employee capacity.
What do you think they're going to be doing with all of that extra capacity?
Is it just going to be managing the relationships?
Because it doesn't sound like you're thinking that AI is going to exactly replace that function. That's going to be person-to-person.
Dave Blair: I don't take the stance today it's going to replace the relationships.
That human connection that people want to have persists.
And it's allowing those people to know their client better than they did in the past.
So I don't see AI replacing that.
I do see AI replacing the recon and some of just the mundane tasks.
Sometimes we call it like a thousand little cuts of tasks that people have to do to just soak up time, but they don't grow the business.
We want to help people grow their business.
Kristin Myers: So then more capacity essentially means more revenue and more ability to do the work that they should be spending their time doing.
So I'm curious to know then, because there's a really big difference between, you know, writing an email and AI touching that up.
We've all seen that. Anyone who's been on Google has seen the helpful, you know, AI has, right?
So there's obviously a huge difference between that and actually touching the investment workflow.
So if AI makes a mistake, who is held accountable for that?
Dave Blair: Well, yeah, great question.
If AI makes a mistake, that AI is part of our software, and we're going to be accountable for that mistake.
So that's where I joke, I don't think OpenAI or Anthropic want to be in the middle of a trade workflow.
You know, we're sending a million-share order across the wire from our trading system, and then messages back.
It has to be accurate. It has to be accurate all the time.
So that's where you get the mix of determinism in the workflows that we would have done three years ago, pre-OpenAI, to applying AI on top of that to help get stuff done.
But within knowing what our business is, which is we have to be accurate.
Numbers, there's no wiggle room.
There's no MVP. There's no, like, do things and break things.
Like, we have to be accurate.
And so that overlays everything that we do.
Kristin Myers: Right. So then what does the human oversight look like?
Is that a separate role in and of itself, just to make sure that the goal is being accurate?
Dave Blair: Human in the loop.
I think, you know, before people get to, say, fully autonomous, there's going to be a human in the loop.
We even look at that in our own software process.
You know, can we go from idea to checking in code that would hit production?
We have a human in the loop.
We think in time you won't need that, but you have to make sure you have the guardrails and the safety systems in place.
And that same thing for our customers.
Kristin Myers: So then wait, say more about that.
Because human in the loop, and as you just said, there might be a time when there's a human not in the loop.
So does that mean then you are envisioning that AI is doing oversight over the AI?
Dave Blair: Yeah, you could think of it like that.
You start to see things around loop and graph engineering. Can different models be checking each other?
You know, we've been running experiments on that type of stuff.
So I do think there is a possibility there, but it's going to take time to get there.
Kristin Myers: Is there something that you envision the AI won't do, or will never do, at least when it comes to working with these investment firms?
We've already heard about AI essentially running trades, like somewhat running trades, right?
I'm curious then. It almost sounds like, right, it doesn't sound too far off that you can have an all-AI investment firm, right?
So talk to me about where you're seeing that going.
Dave Blair: I think there's a, and I would say a vision, that there's a highly automated investment firm, and more automated than what traditional software tools have been able to do.
But you still come back to the human and the judgment in terms of investment calls, investment strategy, and managing the relationships with the clients.
Kristin Myers: So the one bane, I know, speaking to so many asset managers and investment firms, is always compliance.
I'm curious, in your journey of bringing on clients, how were you finding that process of convincing CIOs and really the compliance departments, right, to let AI do more than just, you know, do some of the more basic tasks and answer some questions?
Dave Blair: It's gradual.
It's gradual, right? It's like one step at a time.
And it comes back to the guardrails, the security, the trust, the compliance department that we have, and convincing them that we've got the right things in place.
And that includes full auditability.
If the AI did something, we know why they did it. We can trace back.
And you're not guessing and being like, "Oh, what happened here?"
You know, it's like, "Oh, the AI did that."
I mean, you have to have full auditability, full traceability, and then that gives people comfort.
It's like, we're not going to be guessing why this happens.
Kristin Myers: Can you speak to just, have you received a lot of pushback?
And have you found that easing over the last couple of months and years?
How has that sort of process really changed for Ridgeline?
Dave Blair: Yeah. Investment firms, by definition, are conservative.
You know, they were reluctant to go to cloud. They're like, "I want to run my stuff." They will go to cloud.
But now this AI thing is here, and it's like, you know, this is the core of my business. It has to run.
So we're always looking at that.
I think in the last six months, attitudes have changed a lot.
Everybody is experimenting with it if they haven't fully embraced it yet.
Kristin Myers: So you were also talking about the scaling internationally.
I want to bring that back a little bit, how you're seeing the attitudes toward AI globally as you guys are scaling.
As you just were mentioning, investment firms are, at least here, fairly conservative.
Are you seeing the same sort of pushback?
Europe tends to be, at least on this end, more conservative, although they are ahead of us tech-wise, at least when it comes to the financial services sector.
How are you finding that scaling globally?
Dave Blair: To be clear, we're just nascent in Europe.
I think in Canada, we're seeing some similar pushback to the U.S.
You know, there's some reticence, but everybody's trying it.
And it's like, how do I do this safely and efficiently?
And that's where they look to us as their partner to help them through that journey.
Kristin Myers: So I want to ask, because you said this was your first time on the floor of the New York Stock Exchange.
So I ask everyone this question to sort of close us out.
What do you think about when you think about ringing that bell that's right there behind us?
Or has that thought not even crossed your mind?
And if ringing the bell has crossed your mind, I would love to know when you think that might potentially happen.
Dave Blair: I would love to know when I think that's going to happen as well.
It has certainly crossed my mind, and it's certainly crossed all of our minds.
You know, Dave Duffield has got two IPOs as a founder, right?
We want to get him a third one.
I think he might be one of one to actually found a company and get it to an IPO.
As well as for the company and our customers, and it comes back to our customers.
You know, I believe in the public markets. I'd love to see that happen.
Time frame, you know, depending on how well we execute the business, markets, multiples, and all of that fun stuff.
But it's definitely the goal.
Kristin Myers: I'm so excited.
Like I said, this is your first time on the floor of the Stock Exchange, but definitely not going to be your last.
So we'll have to bring you back, Dave, just to hear about how much more Ridgeline has grown and hopefully be present for that public offering.
Thank you so much.
Dave Blair, CEO of Ridgeline. Thank you so much for joining us.
