Gray Line Partners is a Seattle-based investment firm founded earlier this year by two United States Military Academy graduates, Eddie Kang and Rob Hammond. The firm focuses on investing in software-as-a-service businesses across North America, specifically targeting companies with annual recurring revenue of $2-to-$10 million that demonstrate strong fundamentals. Gray Line is described as an “early growth equity firm” that invests in companies with proven product-market fit and the ability to acquire and retain customers, rather than focusing on startups that have raised large amounts of capital and need to achieve significant revenue growth metrics. The firm is looking for companies that prioritize efficiency and are able to grow profits with minimal investment.
One key belief of Gray Line is that many SaaS businesses do not require a significant amount of investment to drive sales and increase profits. This belief is supported by the current state of the venture ecosystem, which is experiencing liquidity constraints and a cash crunch for many startups. Additionally, advancements in artificial intelligence are helping software businesses become more efficient and less reliant on future investments. The firm recently led an $11.5 million funding round for Actuate, a New York startup that uses computer vision software for remote security camera monitoring and threat detection. Kang believes that AI can make humans more productive and efficient, rather than replacing them entirely.
Gray Line primarily leads investments in companies and also uses AI to identify potential opportunities. The firm has developed its own sourcing model that scours the internet for information and identifies attractive companies based on its thesis and parameters. This approach allows Gray Line to be highly scalable on the investing front and showcases the firm’s commitment to utilizing the technology it believes in. Kang, a former U.S. Army captain who served in Korea and Afghanistan, has a background in investment banking and growth equity investments. Hammond, a partner at Gray Line, worked with Kang at Point72 Ventures and has experience with various firms including Canoo and Rothschild & Co.
The firm’s name, Gray Line, is a reference to the phrase “The Long Gray Line,” which refers to West Point alumni. Kang and Hammond chose this name to symbolize the idea of alumni supporting each other and achieving success together. The duo’s military background, combined with their experience in finance and technology, positions them well to lead Gray Line and make strategic investments in the SaaS sector. With a focus on efficient growth and leveraging AI technology, Gray Line aims to support and grow software companies that demonstrate strong fundamentals and have the potential for sustainable success in the market.
