Enterprise & Deep Tech Weekly

The Angle Issue #67: For the two weeks ended December 10, 2019

Good morning from an undisclosed location, somewhere in Europe. It’s a city with a startup scene so small that if I tell you where I am this morning, it’s pretty much the same as saying which company I’m here to meet… The coffee, however, is outstanding.

Introducing the Angular Ventures Team. Last week, we formally announced in a blog post that Angular’s full-time investment team now includes three people with the addition of Andrew Poesaste to the investment team in London to help cover Europe and Israel and Anne Blum as Head of Platform in New York to help our early-stage portfolio scale, especially in the US. You should follow them both on Twitter (@anneablum & @poetential) and get to know them. They are both awesome.

We’re going on tour in Paris, Munich, and Berlin in January. Anne, Andrew, and I will be in Paris, Munich, and Berlin the week of January 6–10 — meeting startups and networking with the VC communities in those important ecosystems.

• Enterprise tech founder? We want to meet you! Most of our time will be spent in meetings with founders — and if you are an early-stage enterprise founder in those cities and would like to meet the full Angular Ventures team — please don’t hesitate to reach out or (even easier) just fill out this form and we’ll get back to you ASAP.

• Enterprise Sales Breakfast in Berlin. On Friday, January 10, we’ll be holding a very small and intimate breakfast for enterprise tech founders in Berlin, in partnership with our friends at Point Nine. If your business requires you to sell to big corporate customers, we know you are part of a small (elite) minority in the Berlin ecosystem — and we want to buy you breakfast and ease your pain a bit. Apply here for a seat at the table.

New blog post: What do we actually mean by the phrase “enterprise or deep tech?”

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.

From the blog

• 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

• European Venture. Undoubtedly, European VC is having a moment — at least in the tech press. In conjunction with the release of their annual Midas List (which has included a “Europe & Israel” section for a few years already), Forbes did a piece on European VC highlighting what anyone paying attention to this market already knows: that leading US VCs have been paying an appropriate degree of attention to what is going on in Europe for a quite some time now. Some, like Lightspeed, are starting to put partners on the ground, but many have been open to meeting and backing European founders for a long time. What is often forgotten in Europe is that these leading US firms had been actively looking at Israel and China and India (and, where appropriate, Europe) for decades. For the best founders in Europe (or anywhere) the best VCs in the US have always been the best address at which to seek financing. The rising tide of tech capital raises all boats, and a crash — if one comes — will sink quite a few. A few breathless articles and blog posts have hit lately suggesting that this is a something new. But among elite founders and funders, access to the US is not new at all — just the media attention. As the old Sand Hill Road saying goes, “plus ça change, plus c’est la même chose.”

• Israel/Dev Tools. JFrog is gearing up for an IPO.

• France/ML. Dataiku was valued at $1.4B following a recent secondary. “Dataiku helps enterprise clients turn large data sets into actionable insights using machine learning. The company connects to various storage systems and databases, such as Hadoop, NoSQL or image sets.”

• Israel/Semiconductors. Intel is rumored to be considering an acquisition of AI chipmaker Habana Labs for $1B. “Habana Labs, founded in 2016 by David Dahan and Ran Halutz, uses artificial intelligence to improve the processing performance of chips and lower their costs and power consumption. The processors are aimed at the specific needs of training deep neural networks.”

• Israel/Customer Success. Walkme raised $90M for its customer success platform. “WalkMe’s goal with its “context-intelligent” DAP, in its own words, is to make it “effortless to use any software, website or app… so users can complete tasks faster and easier.” The company uses artificial intelligence and machine learning, analytics and automation to essentially anticipate users’ needs and then aims to provide help “exactly when and where they need it.” WalkMe is seeing increased growth as of late, noting that it has “almost” doubled its valuation in the last year (which would mean that it is now valued at or more than about $2 billion). And, the startup said it surpassed $100 million in annual recurring revenue (ARR) in the second quarter. Meanwhile, in the third quarter, its new business bookings grew 100 percent year-over-year.”

• Israel/Voice Analytics. Gong raised $65M from Sequoia for its voice analytics suite for sales teams.

• Germany/Pricing. Pricefx raises $53 million to expand its pricing software tool that helps companies manage their pricing strategy

• Israel/Capital provider. Capitolis has raised $40 million, for its inner marketplace that connects businesses with capital providers for different finance functions.

• France/Dev Security. GitGuardian raised $15M to secure access to Git repos and what gets put there. While the article says they have no competitors, the team at Datree would probably disagree.

• Israel/Security. Panorays raised $15M to simulate hacker activity.

• Israel/Security. Cymulate has raised $15 million from Spark Capital for its SaaS-based breach and attack simulation (BAS) platform

• Switzerland/Trade Secrets. Cyberhaven raises $13 million to thwart trade secret theft

• France/Data Vis. Toucan Toco data visualization software that makes business intelligence easy to understand for non-technical decision-makers has raised €12 million.

• UK/IoT. Iotic has raised €7.5 million for its SaaS platform that enables enterprises to interact automatically and securely with their ecosystems of assets, objects, companies, and people.

• UK/AI Chat. Cognigy has raised €5.5 million for its AI-based conversation platform

• UK/Data. Rossum a deep learning startup focused on data extraction has raised €4.5 million

• Germany/Manufacturing. US-based Xometry acquired Shift for an undisclosed amount.

Worth reading

Enterprise/Tech News

• Re:view of Re:Invent. Bloomberg recapped AWS’s annual conference which was headlined by the announcement of a faster chip to power EC2 instances and a slew of new offerings. Here’s a closer look at AWS CEO Andy Jassy’s keynote. Ran Levitzky of Magenta Capital offered his summary of key announcements. But perhaps the most interesting take, not surprisingly, was from Ben Thompson at Stratechery. Here’s an outtake: “AWS can not only manage your relational database for you, they can also manage a key-value database (for faster look-up), an in-memory database (for speed), a graph database (for complex relationships), a time-series database (for data that changes over time), a ledger database (for transaction logs), a document database (for documents), and a wide-column database (an even more flexible relational database), because they are not only managing these database types for you, but for all of their customers, justifying the costs involved. This is a win-win: customers can use a database better suited to the job at hand, improving performance and reducing costs, while AWS can earn a higher margin than it could on a relational database competing with a customer’s on-premises alternative. That’s the thing, though: the customer has to be willing to stop using relational databases for everything. They need to, in Jassy’s words, transform not only how they build new applications, but also old ones, at least if they want to get the full benefit of AWS’s breadth of offerings.”

• Do Oracle’s buybacks spell trouble? CBNC looks at Oracle’s patterns of stock buybacks and suggests they might be indicative of a deeper underlying set of issues. “The big long-term problem is that Oracle has been slow to react to the rise of cloud computing, whose over-the-Internet applications are rapidly taking market share from Oracle’s packaged software that runs on servers controlled by Oracle’s corporate clients. In turn, this means valuations in the software business are migrating rapidly toward software-as-a-service companies like Salesforce and Workday, and toward cloud computing service managers led by Amazon and Microsoft, according to CFRA Research’s Freeman. Oracle might be in better shape if it had snagged more such companies on their way up, analysts say.”

• Hybrid cloud considerations. John Young, Architect at Sungard, runs through the considerations that drive a decision to build a hybrid cloud infrastructure. “…On the other hand, that’s not to say that cloud providers should be discounted entirely for hosting mission critical applications. Cloud and managed service providers may layer their solutions with specific components that protect the stability of the applications they host, such as co-located data centres or managed security services. The question boils down to where applications will be more resilient. The locality of on-premise solutions ostensibly provides greater peace of mind, but the cost of making private clouds resilient may push organisations to go to a cloud provider with resilience embedded within its offering.”

• 2019: A Space Odyssey. HAL is apparently real and about to be deployed at the ISS. ““The overall goal is to really create a true companion. The relationship between an astronaut and CIMON is really important,” Matthias Biniok, the lead architect for CIMON 2, told Reuters. “It’s trying to understand if the astronaut is sad, is he angry, joyful and so on.””

How to Startup

• Don’t be backable, be real. Charlie O’Donnell, one of my favorite VC bloggers, wrote a great piece arguing that founders should stop trying to bluster their way towards “backability” (a la Adam Neumann) and focus on being real and genuine. Amen. “There are some founders who see predictions about the future as a kind of promise — and so they hesitate and get uncomfortable around the idea of insisting that X, Y, or Z will happen. They tend to pause or give concessions around direct questions.”

• Product launches. Tomasz Tunguz writes that product launches are “a powerful management technique to align and accelerate teams.”

How to Venture

• Lessons from Venture. My friend Jonathan Lehr for Workbench offers six lessons from the first six years of the fund. They are all gems, but this one on humility resonated especially well: “On a related point, some of our highest fliers have unfortunately turned south. Some of our companies that almost died multiple times have risen from the ashes like a phoenix. We pride ourselves on sticking with founders through the good and the bad, and in doing everything in our power to tilt the odds of success in their favor. Some days it takes a tough stomach to cope with company ups and downs, but this is what we signed up for! This steadfast commitment to our companies has led to some of our best founder references as we’ve continued growing Work-Bench.”

• Recent VC vintage performance. Rob Go looks at recent performance data for VCs and provides some useful ways of thinking about what the data means. “The top quartile DPI for the 2012 vintage is 0.62. So, that means that the top quartile fund has distributed 62% of paid-in capital after 7 years. Is this good or bad? One way to think about this is how quickly LPs expect to get their capital back from a VC commitment. Typically, when an LP makes a commitment to a new VC relationship, they are expecting to stay with that group for at least 2–3 funds. This is because the feedback cycle in venture is long, and VCs favor LPs with a long-term perspective. I’ve heard one LP heuristic that the capital returned from the first commitment to a new fund should pay for the investment in the fourth fund by the time that comes around. Given that most VCs these days seem to be raising new funds every 2 years (and sometimes faster), this equates to an expectation of a 1X DPI by year 6 or 7. Clearly, 0.62 is quite a bit less than that. So, an LP in this fund would probably have to make a decision on whether or not to keep investing with the firm before they have the principal back from their original investment.”

Portfolio News

• Valohai CEO, Eero Laaksonen, will be speaking at the San Francisco Deep Learning Meetup on December 12.

• Crux OCM CEO Vicki Knott presented at the Global Petroleum Show. According to a write-up by Terry Etam, “Vicki Knott demonstrated the company’s engineered software that optimizes pipeline and gas plant control operation systems in real-time, leading to significant efficiencies and even, tantalizingly, the prospect of materially higher throughput. This channel of innovation represents the front-line battleground — and what should be the primary focus — of the fight to reduce global emissions.”

• Planable launched the Advent Calendar for Marketers and their social media study was recently featured in Digital Information World.

• Vault Platform’s latest study findings show that when it comes to misconduct reporting, there is an expansive disconnect between employer perception and employee experience.

• DUST Identity was featured in One World Identity’s 2019 Identity Landscape.

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