Global investment firm The Riverside Company has announced the successful final close of its Riverside Acceleration Capital Growth Lending Fund III (RAC GL III), securing $200 million at its hard cap. This new fund is dedicated to providing growth loans to enterprise software companies, helping them scale efficiently. The closing builds on the firm's established track record and reflects strong investor confidence in its specialized strategy.
Building on a Successful Track Record
The $200 million fund surpasses its predecessor, which closed at $177 million in 2019, signaling significant momentum for the investment strategy. Over its decade-long history, Riverside Acceleration Capital (RAC) has deployed over $225 million across more than 90 software companies. This consistent growth underscores the team's deep expertise and successful performance in the niche software market.
RAC GL III has already demonstrated impressive velocity, with over 20 percent of its capital deployed across 18 investments. Remarkably, the fund has already generated its first exit within just four months of activity. This rapid progress highlights the team's ability to identify and support high-potential companies effectively from the outset.
A Founder-Centric Investment Philosophy
At the core of RAC's strategy is a belief in founder alignment, efficiency, and disciplined growth, a philosophy championed by Managing Partner Jim Toth. This approach positions RAC as a partner rather than just a capital provider, offering support at the right time. The successful fundraise is a testament to the trust this model has built with both entrepreneurs and investors.
The firm offers flexible capital through two distinct strategies: growth lending and non-control growth equity investments. This dual approach allows RAC to meet companies at pivotal moments with tailored financial solutions that support scaling without excessive dilution. It provides founders with the resources needed to achieve critical milestones and build long-term, durable value.
Leveraging a Global Platform and AI Focus
Portfolio companies benefit from more than just capital, gaining access to RAC's dedicated 16-person team and the extensive resources of The Riverside Company. This includes a global platform with a highly experienced origination team and over 50 operating professionals. This comprehensive support system is instrumental in helping businesses navigate growth challenges and unlock their full potential.
A significant theme for the new fund is the transformative power of Artificial Intelligence in the software sector. The firm notes that AI is enabling its portfolio companies to scale faster and operate more effectively with less capital. This focus ensures RAC is investing in businesses at the forefront of technological innovation and efficiency.
Strong Investor Confidence and Market Opportunity
The fund's ability to close at its hard cap reflects robust confidence from a diverse group of limited partners. Co-CEO Béla Szigethy highlighted that the fund attracted both longstanding supporters and new relationships, successfully broadening its institutional investor base. This powerful endorsement validates the strength of RAC's differentiated approach and the broader Riverside platform.
According to Co-CEO Stewart Kohl, the current growth-stage software market presents exceptional opportunities for disciplined and well-aligned capital. RAC's innovative model is specifically designed to capitalize on this environment by providing flexible investment structures. The strategy aims to help founders scale with confidence and position their businesses for sustained, long-term success.
The successful closing of the $200 million RAC GL III fund marks a significant milestone for The Riverside Company, reinforcing its position as a key partner for growth-stage software businesses. With its founder-aligned philosophy, deep operational support, and strategic focus on AI, the fund is well-equipped to foster innovation and drive value. This achievement not only highlights strong investor trust but also signals a continued commitment to fueling the next generation of enterprise software leaders.