Enterprise & Deep Tech Weekly

The Angle Issue #93: For the week ended September 21, 2020

Author

Angular Ventures
September 22, 2020

Enterprise & Deep Tech Weekly

Issue #93: For the week ended September 21, 2020

For me, last week seemed like a unique point in time when about a decade’s worth of work suddenly came into the spotlight all at the same time.

Three milestones. In the same week: (1) JFrog went public on Nasdaq and began trading at a $5.75B valuation. (2) Snyk announced a $200M fundraising round at a $2.6B valuation on continued revenue growth. And (3) the Bessemer/Salesforce/Forbes “Cloud 100” was announced — including four companies that I backed in their first financing round: JFrog, SiSense, Snyk, and Front. Of the 30 companies I backed over 12 prior to establishing Angular Ventures in 2018, these four unicorns are undoubtedly the most successful. I was incredibly fortunate to be in the right place at the right time and with the right state of mind when each of these four crossed my path. SiSense (2010) took months of deep diligence and dragging reluctant colleagues over the line. JFrog (2012) was highly controversial at the time because no one was convinced there was any money to be made in development tools. Front (2014) was passed on by the firm I worked at at the time, so I joined the angel round (with my firm’s permission) — one of the first angel checks I ever wrote. I also nearly passed because I worried about barriers to entry, but Mathilde Collin was simply one of the most impressive early-stage founders I’d ever met. It was, admittedly, a tiny check, but it helped set me on a course to setting up Angular. Snyk (2015) was one of a handful of AngelList syndicate investments I made between going off independently and raising Angular I. I was blown away by Guy Podjarny’s vision for dev-centric “shift-left” security and basically camped out outside his office until he agreed to cut me into an oversubscribed round. I wrote up a memo for Snyk and could barely get the round filled — as virtually none of the syndicate members understood or agreed with the vision. Some even wrote me detailed explanations as to why they were passing.

Fear. So last week, I put my “buy” orders in on FROG stock and watched Shlomi, the JFrog CEO, get interviewed on CNBC with my wife and daughter looking on quizzically. It was a unique and wonderfully strange experience. Many VCs I know do great work for a whole career and never get to see a portfolio company go public. I know how much of a role luck plays in all of these outcomes — and how difficult it is even after all this time — to attribute success as a venture capitalist to any specific set of actions or attributes. They say VC has a long feedback cycle — and it does — but now on the other end of that feedback cycle, I am left wondering what the feedback actually is. The many misses- the many fantastic companies that I passed on (or know in my heart of hearts that I would have passed on) continue to haunt me. I passed on Wix, Yotpo, Waze, BigID, and many others. I would have passed on Walkme, Fiverr, Showpad, Hopin, and many others. What can I learn from these errors in judgment? Am I still making those errors today? What is the balance between work and luck?

The challenge ahead. Even more frightening is the long feedback cycle that lies ahead. Investment decisions made in 2020 will yield results — one hopes — sometime in the next five to ten years. If they are less successful., we’ll probably know sooner. Ultimately, we are trying to identify founders with high levels of ambition, extraordinary capability, and — crucially — a differentiated vision of how the technology landscape will unfold and what needs to be built today to create the possibility for greatness tomorrow. That hasn’t changed — but even as the IPO confetti settles, the challenge remains as daunting and as humbling as ever.

Gratitude. My most profound feeling right now — aside from what I hope is a helpful dose of humbling fear — is gratitude. I am deeply grateful to the founders of all the companies I’ve worked with for allowing me to be a small part of their stories — many of which are still being written. I’m grateful to all the founders I met with and did not ultimately invest in for sharing their stories and visions with me. I’m grateful to my former colleagues at Genesis, Gemini, Index, and DFJ Esprit for the many learnings they enabled and for putting up with my impassioned arguments for the investments I believed in. I am grateful for my partners, colleagues, and investors in Angular Ventures without whom I could not even attempt this work. Most of all, I am grateful for the support of my family (Millia and Maya) who continue to put up with the early morning meetings, the late night calls, the alternating bouts of exuberance and terror, the imposter syndrome that won’t go away, and the never-ending highs and lows of the best job I can think of.

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.

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

From the blog

Europe/Israel Enterprise/Tech

  • Israel/DevOps. JFrog went public and is currently trading at a $5.75B market cap. Boaz Dinte, of the company company’s later stage investors, wrote a great piece on his perspective on the company and Protocol wrote a detailed analysis of why JFrog is so central to modern software development. “The company and its investors are betting that the massive number of companies that have yet to contemplate modernizing older tech investments are starting to realize they have no choice, lest they be swept away by newer, more-nimble competitors. Tools like JFrog’s are an extension of the DevOps movement, which is as much a cultural shift in thinking inside software factories as a technical one toward faster and more flexible software development.”

  • Sweden/Fintech. Klarna raised $650K at a $10B valuation. “Klarna’s main product is an alternative payment method on e-commerce platforms. It lets you buy now and pay later over three or four installments with 0% interest. It has been quite popular in different European markets as many customers don’t have credit cards and/or don’t want to pay the fees involved with revolving credit lines. Merchants get paid when the initial transaction occurs, with Klarna transparently managing credit lines for customers. In addition to transaction fees, the company also generates revenue from late fees.”

  • UK/Israel/Developer Security. Snyk raised $200M at a $2.6 billion valuation led by Lee Fixel’s Addition Capital, his first deal with European or Israeli roots. Synk helps software-driven businesses develop fast and stay secure.

  • Germany/Vertical Farms. Infarm has raised $170 million to continue building its ‘vertical farming’ network.

  • Israel/Supplier Payments. Melio raised $144M for its software for its digital accounts payable and receivable tool allows small businesses to transfer and receive payments in a faster, easier way.

  • Netherlands/Payments API. Mollie raised $106M for its software that offers a simple, API-based way to integrate payments into a site or an app.

  • Israel/Medical IoT Security. Medigate raised $30M for a platform that enables IT, info security, biomedical, and clinical engineering teams to identify, monitor, and secure every medical device on the clinical network.

  • Israel/Remote Payroll. Deel raised $30M to help companies manage their payroll, compliance, and other tools to run global workforces.

  • Denmark/SaaS Cloud Back Up. Keepit raised $30M for its Backup-as-a-Service software that specializes in protecting data from SaaS solutions such as Microsoft 365, Salesforce, Dynamics 365, and G Suite.

  • Israel/Data Reliability Platform. Monte Carlo Data raised $16M for its end-to-end platform for enterprises to increase trust in data and eliminate data downtime, in other words, times when data is inaccurate, missing, or otherwise erroneous.

  • UK/Legal Pre-Screen AI. Thoughtriver raised $10M for software that’s applying AI to speed up contract pre-screening allowing enterprises to secure deals faster.

  • Germany/Productivity. Superlist raised $2.5M seed funding to enable “supercharged productivity for teams of the future.” The company was founded by Christian Reber who previously founded productivity application Wunderlist

  • Israel/Adtech. It looks like Taboola and Outbrain have called off their merger.

  • UK/Security. Darktrace is gearing up for an IPO, but it seems Goldman Sachs is not having any of it.

  • Israel/Covid economy. Israeli soldiers in tech units are asking to extend their service as Covid eliminates job prospects on the outside.

  • Israel/Fintech. Sifted takes a look at Israel’s fintech boom.

Worth reading

Enterprise/Tech News

  • Through the looking glass on semiconductors. Hat tip to Bill Gurley for sharing this piece on the semiconductor industry in the wake of Nividia’s $40B bid for UK-based and Softbank-owned ARM. The big story in the nationalization of tech is not Tiktok. It’s Intel, TSMC, Nvidia, and ARM.

  • Chef gets bought. Progress, a Boston-based dev tools company, bought Chef for $220M. The company, which raised $105M since its formation in 2008 had recently gone open-source and was generating revenue of $70M.

  • The Last Mile of the ETL Framework. A great deep dive on the current state of metrics stores and data notebooks by Workbench.

  • Automation is arriving fast. Wired on how covid is accelerating the automation of white collar work.

  • JAMstack for e-commerce. We are seeing a ton of startups leveraging JAMstack for e-commerce. Here’s a look at what that means from the perspective of e-commerce businesses.

  • We are all in the Amazon now. The Information covers how Amazon’s continued growth is shaping the debate over its future. “Any increase in e-commerce’s overall share of U.S. retail is a boon for Amazon, by far the biggest player in online shopping. Amazon alone was expected to account for 38% of all online shopping in the U.S. this year, according to eMarketer’s May estimates. Last year, The Information reported that eMarketer revised Amazon’s share of e-commerce significantly downward from around 50% after Bezos disclosed new data on third-party merchant sales in a letter to shareholders.”

  • Airtable expands it’s offering. On the back of a $185M fundraising, Airtable CEO Howie Liu announced a number of product expansions in a twitter thread worth reading.

  • Roam raises at $200M. Note-taking app Roam raised $9M at a $200M valuation.

How to Startup

  • The Slootman way. Thanks to Ed Sim for highlighting this old (2018) post by Frank Slootman (CEO of Snowflake) on his management approach. He’s intense. “Bottom line: There is room up in organizations to boost performance by amping up the pace and intensity. Considerable slack naturally exists in organizations to perform at much higher levels. The role of leadership is to convert that lingering potential into superlative results. The opportunity is right under our noses but for some reason it does not enter the consciousness. This notion is not limited to business enterprises. We see in professional sports all the time how teams go almost overnight from losing to winning with basically the same roster, but different leadership. Call it what you want, the X factor, whatever, it is real. Anybody can dial into this, but not many do. It is not easy because you will drive people out of their comfort zones. There will be resistance. Change is hard. Some will vote with their feet. If you want to be popular as a leader, this may not be for you. The role of a leader is to change the status quo, step up the pace, and increase the intensity. Leaders are the energy bunnies and pacemakers of the organization. Some people drain energy from organizations; not leaders, they engulf organizations with energy.”

How to Venture

  • Rethinking Rocket Internet. The legendary (notorious) German venture studio / venture firm / conglomerate delisted from the Frankfurt Stock Exchange, prompting Nicolas Collin to reflect on its mixed legacy. “Perhaps Rocket Internet’s intervention was necessary to spearhead the emergence of a fully-fledged entrepreneurial ecosystem in unsung places such as developing nations or… Europe. And to a certain extent, it has worked, as seen with the cases of Zalando (market cap €18bn), one of Europe’s tech jewels which was brought up in the Rocket Internet empire, and that of Jumia, which employs 5,000 employees across a dozen African countries.”

  • Is there still a SaaS VC opportunity? Tomasz Tunguz is convinced that the opportunities remain massive.

Portfolio News

JFrog soared 50% on its first day of trading.

Snyk raised $200M Series D at a $2.6B valuation.

Firebolt’s CEO, Eldad Farkash, explains where Snowflake ends and Firebolt starts on the latest episode of Data Engineering Daily’s podcast.

Datos Health is empowering teledoc providers to offer an unparalleled level of remote health care — learn more about the Datos platform by watching this short video.

Vault Platform was included in Employee Benefit News & Employee Benefit Adviser’s list of 2020 Digital Innovators.

Planable has released its 2020 Holiday Kit for Marketers on Product Hunt.

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