Ashley Smith’s Southern upbringing gave her a persistent love of surreal and tragic tales, worlds filled with kooky characters and funhouse mirror logic.
On paper, you may not necessarily expect this of Smith. Her resume reads like a traditional Silicon Valley rise—from early employee marketing jobs at technical juggernauts like Twilio, GitLab, and GitHub, to a gradual but systematic transition to venture capital.
But books are refractive prisms that often say a lot about where we came from. That’s especially true of Smith, who loves Southern Gothic stories today as much as she did when she was a kid. Smith grew up in Hazlehurst, Ga.—a town of about 4,000 people, about a two-hour drive from Savannah—and saw her experience reflected in the eccentric, sweat-drenched worlds of William Faulkner, Flannery O’Connor, and Ferrol Sams. Books, however, were a sensitive subject in the Hazlehurst of Smith’s childhood, she says. Midnight in the Garden of Good and Evil, a sultry and strange nonfiction bestseller set in Savannah, came out in 1994 to a ruckus in Hazlehurst.
“It was oddly scandalous, but it shouldn’t have been,” said Smith. “My little town had its own version of all those characters.”
It wasn’t just books about the South that invited censure, either. Smith remembers cloak-and-dagger trips to Walmart while in middle school, where she would get Harry Potter and Judy Blume books with her mom. In Hazlehurst, churches held book burnings, which meant her copies of the Harry Potter series were secrets.
“I always felt so out of place where I’m from, because everyone went to church,” said Smith. “Everyone needs that kind of stuff, but I never had a ‘home church.’ I remember being asked in first grade: ‘Which church do you go to?’ And I didn’t have an answer.”
Like so many out-of-place kids before her and after, books became a lens through which she could understand the world around her, and the possibilities beyond it. Smith studied biomedical engineering at Georgia Tech, and landed an early job at Twilio. Since, she’s lived what she describes as a “fairy tale.” Now, with more than a decade of operating experience behind her, she’s launching Vermillion Cliffs Ventures with a debut fund of $13 million, Fortune can exclusively report.
The firm—named for Arizona’s spectacular “wavy” rock formations which rank as among the most surprising geologic monuments in the U.S.—is focused on seed and pre-seed investments, and is backed by LPs like Screendoor and Sapphire Ventures. Some portfolio companies already include CopilotKit, Baz, and Argilla. Sapphire partner Beezer Clarkson was drawn to Smith’s clear perspective and go-to-market experience at Twilio, GitLab, GitHub, and Parse (acquired by Facebook in 2013).
“Recognizing what ‘great’ looks like is a critical trait for any exceptional investor, and while many investors lack this clarity, I believe Ashley understands it first-hand,” Clarkson said via email.
(Clarkson added that backing new “early-stage, hyper-focused” funds like Vermillion are part of Sapphire’s strategy and “more than half of our relationships began as emerging managers who have now ushered into established and franchise VCs.”)
Smith was drawn to characters in fiction and life as a kid, and still is today when she’s looking at founders. She’s interested in founders who are technical but fundamentally unconventional.
“This shouldn’t surprise you: I like personalities and backing quirky people,” Smith told Fortune. “I find that they’re better at talking to customers. The work ethic is different and it aligns better with me…If you look at where I always worked, all my founders were brilliant and wonderful, but quirky.”
In one of her posthumously published essays, Flannery O’Connor writes: “The fact is that anybody who has survived his childhood has enough information about life to last him the rest of his days.” And so that’s true for all of us, and for Smith, who says that the small-town South and Silicon Valley have more in common than you might think at first glance. They’re both spheres that by nature involve cliques of insiders and outsiders, gossip, and towering personalities.
“We see it on social media and in Southern Gothic novels, there’s always one or two overarching characters,” said Smith. “It’s different, sure, but in some ways, it’s very much the same.”
Which is how Smith got from Hazlehurst, to here.
See you tomorrow,
Allie Garfinkle
X:@agarfinks
Email: alexandra.garfinkle@fortune.com
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Nina Ajemian curated the deals section of today’s newsletter.Subscribe here.
Correction, Feb. 6, 2025: The email version of this newsletter included a misspelling of the name of Smith’s hometown.
VENTURE DEALS
- StackAdapt, a Toronto-based programmatic advertising company, raised $235 million in funding. Teachers’ Venture Growth led the round and was joined by Intrepid Growth Partners and others.
- 7AI, a Boston-based agentic cybersecurity platform, raised $36 million in seed funding from Greylock Partners, Spark Capital, and CRV.
- Ionate, a London-based smart electricity grids technology developer, raised $17 million in Series A funding. AlbionVC led the round and was joined by In-Q-Tel, JGC MIRAI Innovation Fund, Santander InnoEnergy Climate Fund, Antares Ventures, and existing investors IQ Capital, Zero Carbon Capital, and Cycle Group.
- Prior Labs, a Freiburg, Germany-based tabular data-trained AI model developer, raised €9 million ($9.3 million) in pre-seed funding. Balderton Capital led the round and was joined by XTX Ventures, Hector Foundation, Atlantic Labs, Galion.exe, and angel investors.
- Desteia, a New York City-based supply chain AI solutions provider, raised $8 million in seed funding. Autotech Ventures, Nazca, and Village Global led the round and were joined by Foundamental, Bridge Latam, and Nido Ventures.
- MacroCycle, a Cambridge, Mass.-based plastic upcycling technology developer, raised $6.5 million in funding from Clean Energy Ventures and Volta Circle.
- DevAI, a Palo Alto-based AI agents developer for enterprise IT, raised $6 million in seed funding. Emergence Capital led the round and was joined by Base10, Benchstrength, and existing investor Pear VC.
- Rho Labs, a London-based crypto rates exchange, raised $4 million in seed funding. CoinFund led the round and was joined by Auros, Flow Traders, existing investor Speedinvest, and others.
PRIVATE EQUITY
- Bain Capital agreed to acquire an approximately 51% stake in Milacron, a Batavia, Ohio-based plastic processing company, for $287 million.
- Riverwood Capital agreed to acquire Quicklizard, a Tel Aviv-based dynamic pricing AI-powered platform, at a total company valuation of approximately NIS 186 million ($52.5 million).
- KKR acquired a majority stake in XOi, a Nashville-based field service technology provider. XOi acquired Specifx, a San Francisco-based data management provider for HVAC companies. Financial terms were not disclosed.
OTHER
- Teladoc Health agreed to acquire Catapult Health, a Dallas-based preventive care virtual services provider, for $65 million in cash.
PEOPLE
- Clayton, Dubilier & Rice, a New York City-based private equity firm, added Sam Camens as a managing director. Previously, he was at Onex.
- Mainsail Partners, an Austin- and San Francisco-based growth equity firm, promoted Tolliver (Bell) Brown and Anthony Hayes to principal and Colten Habecker to senior associate.
