Enterprise & Deep Tech Weekly

Issue #88: For the week ended July 21, 2020

PR in a time of crisis. On Wednesday, we are excited to be hosting Beck Bamberger of BAM, a global PR, media, and marketing firm specializing in startups for an interactive discussion on PR in today’s climate. Beck will be offering some tips and answering your questions. Click here to register.

I took the weekend off last week, so still digging out of backlog, so we’ll get straight to the news.

As always, if you are building an enterprise or deep tech startup in Europe or Israel, please let me know… Now let’s get to the news.

Angular Insights: Talks for Enterprise Founders

Angular is hosting a series of online interactive events with our community of early-stage enterprise tech founders from across Europe and Israel. These talks are designed to deliver practical startup advice in an easy-to-consumer format — with plenty of opportunities to engage with our speakers. Typically, these take place on Wednesday at 3pm UK, 4pm CET, 5pm Israel.
To register for any of the sessions, just click on the links below.

• July 22: Pitching Media Right Now with Beck Bamberger, CEO of BAM

• July 29: New Platforms & Architectures with Bucky Moore, Partner at Kleiner Perkins

• September 9: Building your AI Stack In-House with Micha Breakstone, Co-Founder of Chorus.ai

• September 16: Successfully Selling SaaS to Micro SMBs with Martin Henk, Co-Founder of Pipedrive

Check out: www.angularventures.com/events for additional upcoming events, recordings of past events, and to subscribe to our event series.

From the blog

Defining Enterprise/Deep Tech. What do we actually mean by the phrase “enterprise or deep tech?”
Introducing the Angular Ventures Team. Getting to know Anne and Andrew.
Launching Angular Ventures I. What we do, why we exist, and how we got here.
US incorporation? Just do it. Why nearly all enterprise tech companies should incorporate in Delaware.
Technology for Trust. Why we invested in Vault Platform.
A Security Layer for the Physical World: Why we invested in DUST Identity.
A System of Intelligence for Field Service: Why we invested in Aquant.io.

Europe/Israel Enterprise/Tech

• Israel/VC Data. IVC and Meitar released a detailed report on Israeli VC activity in 1H20.

• Romania/RPA. UiPath has raised $225M for its robotic process automation (RPA) software valuing the company over $10 billion. Like every other VC with a pulse, we are on the hunt for RPA disruptors. Round 1 of this war is drawing to a close, but round 2 is just getting underway. Ping us if you are thinking about this or working on it already.

• Germany/Price Optimization. Pricefx raised $60 million for its price management and optimization software.

• UK/Fraud Prevention. Ravelin has raised $20M for its software that prevents fraud threats allowing enterprises to accept payments with confidence.

• Israel/Media Applications. Applicaster raised $11M for its SaaS platform that allows media companies to develop apps.

• Israel/Predictive Yields. Seebo raised $9M for its solution that enables manufacturers to predict and prevent production losses and manage complex production processes.

• Estonia/AML. Lucinity raised $6.1M to help financial firms to shed light on money laundering by using the unique power of Augmented Intelligence.

• Germany/Digital Employee Coach. How.fm raised $2.8M for its digital coach for worker onboarding, training, and performance support can cover off everything from health and safety, and compliance training, to actual work procedures such as packing processes.

• Israel/Solar-powered camel warning system. Cool.

Worth reading

Enterprise/Tech News

• Auth0 raises at $2B valuation. The identity platform just raised at a $1.92B valuation. The promise of Auth0 (pronounced auth-zero) is that developers only need to add a few lines of code to their applications to add access to its identity management service for external users and to give their own employees access to their intranet services, too. Auth0’s marquee customers include the likes of Atlassian, AMD and Autotrader. The company, which now has 650 employees, says it grew both its revenue and customer base by 70% in 2019 and that it now has “thousands of customers” who use the service to outsource their identity management.

• GPT-3. Unless you were under a rock (something I was hoping to do this past weekend), you couldn’t miss the mass hyperventilation about GPT-3. Delian Asparouv put out a thoughtful review of the technology, which is essentially a more accessible (read API-first) version of GPT-2, the language generator released by OpenAI. Now, before you get too excited, this isn’t some sort of general AI, and the machine doesn’t really have a way of understanding if what it is outputting is true or not. The simplest way to explain how it works is that it analyzes a massive sample of text on the internet, and learns to predict what words come next in a sentence given prior context. Based on the context you give it, it responds to you with what it believes is the statistically most likely thing based on learning from all this text data. This is a strategy that OpenAI and other researchers have been pursuing for quite some time, by starting off with a ‘simple’ problem like trying to predict the next word in a sentence. We have now steadily built up to where they are today, where a model like GPT-3 can complete several paragraphs or more. Though an incredible result, even GPT-3 at some point may lose direction and wander aimlessly. Despite its massive size (over 175B parameters), it still may struggle with keeping a long term destination in mind or holding logical, consistent context over many paragraphs. This means, in my opinion, although there’s debate on this, that while this tool is very impressive, and GPT-4 will likely show further improvements, there are probably diminishing marginal returns to this approach. They can keep getting better at running really complicated statistics on all of the text people have ever written, but the AI is still not capable of “reasoning”.

• More on language. MobileEye founder Amnon Shashua discusses his latest startup, AI21, which is also in the field of text generation. The goal is transitioning from a computer that fixes your grammar to a computer that can write a whole text for you, AI21’s chairman Amnon Shashua said in a recent interview with Calcalist. “You just need to throw your ideas at it in the right order and it creates a text that preserves their original meaning,” he said.

• The battle over Istio. Google and IBM have recently been publicly at odds over how the open-source project is to be governed. “Istio is an increasingly important project for the Cloud Foundry ecosystem,” noted Cloud Foundry Foundation Director Chip Childers, in a statement to SDxCentral. “While we respect that Google has taken a step in the direction of making the project more open through the transfer of the Istio trademark, we continue to believe that the priority should be vendor-neutral governance of the project itself.”

• A review of shift left. Bernadette Wilson of DevPro Journal asks how effective developers have been at “shifting left” responsibility for security. It appears that there is no definitive job description in the industry that includes security. Of respondents to GitLab’s survey, 32.54 percent say security falls to their security group; 20.54 percent says developers; 11.85 says operations, and 29.23 say “all of the above.” Unfortunately, 2.84 percent say no one. Specifically, among people identifying themselves as developers, 28 percent say they are completely responsible for security, 41 percent say they are responsible for security as a part of a team, and 21 percent say they leave the responsibility for security to someone else.

• Palantir goes public. Vox covers the secretive startup’s IPO plans in detail. “I think it’s worth keeping in mind that Palantir sees itself not alongside Uber, Twitter, and Netflix, but alongside Raytheon, Lockheed Martin, and Booz Allen,” said the Intercept’s Sam Biddle, who has covered Palantir for years. “Palantir wants to be a defense contractor, not a Silicon Valley unicorn.”

• A review of enterprise automation. Tom Henriksson of OpenOcean examines the trend of increasing automation in the enterprise.

How to Startup

• Raising in a pandemic. The CEO of Aircall, Jonathan Anguelov, gives the story and pitch deck behind his $65M Series C fundraise. “March 12th. We sync up with our potential investors. Hmmmm. They’re still very interested to do the deal, but wonder aloud about valuation. Other interested investors have pushed the pause button. The Nasdaq loses 10% in a single day.”

How to Venture

• Series A Disruption. Gokul Rajaram, angel investor and a senior exec at Doordash, on how large “crossover funds” are disrupting the Series A market. At every stage of a company’s lifecycle, the upward pressure on round sizes (and, also, on burn rates and valuations) continues unabated — driven now by massive hedge funds or PE shops who have decided — rationally perhaps — that dropping $20M at a $100M valuation for a 2% chance of a 100x return is a good idea. For founders, I think that logic is a bit less compelling.

• Agglomerators vs. Specialists. Nikhil Basu Trivedi continues his awesome dissection of the VC landscape — this time focusing on the divide between specialist VC funds (like Angular) and “agglomerator” VC funds. I think this is a pretty good way to frame the industry. “The core advantage of the specialists is having a focus. Internally, specialists can focus their teams and processes to best suit the sector or the stage. Externally, the brand of the firm can stand out further in the minds of both founders and LPs by being a specialist and having a focus.” Amen.

• Don’t back sociopaths. Roy Bahat of Bloomberg Beta, one of the nicest people in venture, on why VCs should avoid backing sociopaths regardless of the potential upside. This should be an obvious point, but — sadly — it’s not.

Portfolio News

Vault Platform was recently featured in Forbes as a technology that can curb racism and sexism in the workplace.

Valohai was adopted by Colabel to manage their machine learning infrastructure and model serving through Kubernetes, instead of hiring an MLOps engineer.

Aspecto has open-sourced a new JS OpenTelemetry auto instrumentation plugin.

An audio chat with Guy Podjarny, CEO of Snyk. He discusses scanning tools, and the rise of the developer in security programs. He also reveals his experiences in startup, and what he looks for in a great company.