Enterprise & Deep Tech Weekly

Issue #87: For the week ended July 13, 2020

The real role of government in tech innovation. Sifted had an interesting story this week highlighting the extent to which Estonia’s health system is fully digitized. “Estonia’s health service has been digital for 12 years. More than 99% of the data generated by hospitals and doctors is digitized. Citizens can access their own medical records via a super-secure online portal and choose who gets to look at those records. That means finding out whether or not you’ve had a jab for yellow fever is a few clicks away, as is discovering just how many milliliters of a particular drug you were given when you had your tonsils taken out.”

The story echoed with a conversation I had earlier in the week with a Finnish RPA company. At one point in the call, I asked the founder why Finland seems to have had such an edge in developing RPA technologies (evidenced by Robocorp, one of the more exciting RPA plays in recent years). The founder didn’t hesitate in his answer. In Finland, he said, all government paperwork has been digital for years. There is, apparently, literally zero paperwork done on actual paper. As someone who has just spent a full hour trying (and so far failing) to figure out how to actually pay the IRS, this seems like a distant fantasy — but in Finland, it’s already a reality. When huge reams of materials are digital, there is an enormous substrate of data on which new technologies (such as NLP, ML, or RPA) can be attempted and perfected. No wonder at all, then, that Finland is at the cutting edge of one of the most important revolutions in automation.

The tech world — and especially in Europe — people tend to think about government as a source of cash for startups and VCs. But that is probably the least important and least effective long-term strategies for actually driving a tech ecosystem to grow. As Estonia and Finland illustrate, governments can perhaps be even more impactful by serving as catalysts for digital transformation that puts their societies at the forefront of trends. The startups — and the smart private money — will follow.

And if you are building the next Robocorp or Tonkean — please let us know!

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 talks with our community of early-stage enterprise tech founders from across Europe and Israel. These 45-minute 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 talks, just click on the links below.

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

• July 29: New Platforms & Architectures — How IT is Changing with Bucky Moore, Partner at Kleiner Perkins

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

• Germany/Enterprise Architecture. Leanix raised $80M for software that lets enterprises map out their software stack. More details here. “Founded in 2012, LeanIX operates in the enterprise architecture space and its SaaS might well be described as a “Google Maps for IT architectures.” The software lets enterprises map out all of the legacy software or modern SaaS that the organisation is run on. This includes creating meta data on things like what business process it is used for or capable of supporting, what tech powers it, which teams are using or have access to it, as well as how the different architecture fits together.”

• Israel/Backup. Cloud-to-cloud backup provider Ownbackup raised $50M.

• UK/Employee Financial Platform. Wagestream raised $25 million for a platform that gives employees control over their own payday.

• Finland/Open Source Database. MariaDB raised $25M for its popular open-source relational database.

• UK/Publisher Privacy. Permutive raised $18.5M for software to help publishers target ads in a new privacy landscape.

• France/Digital Smell. Aryballe raised $7.6M for a platform that combines biochemical sensors, advanced optics, and machine learning in a single objective solution to collect, display, and analyze odor data.

• UK/Quantum Security. PQShield raised $6.7M to provide a suite of quantum-secure solutions for software, hardware, and data in transit.

• Israel/AI Spatial Biology. Nucleai raised $6.5M to transform immunotherapy treatment decisions and research by AI-powered Tumor Micro Environment (TME) modeling.

• UK/Customer Service Robots. BotsAndUs raised $6M to continue to build out robots that work alongside people in places such as large retail stores, shopping centers, airports, office buildings, and digitize the full customer journey by offering 24/7 customer service and automating on-site data collection and analytics.

• UK/DevOps. Northflank raised $2.6M to create an end-to-end DevOps workflow in the cloud.

Worth reading

Enterprise/Tech News

• Understanding Salesforce. Anshu Sharma, CEO of Skyflow, offered a thoughtful analysis of why Salesforce is, well, Salesforce. “What you don’t see in the product UX is 80% of the product. As someone who helped build the platform, I can tell that you have no idea what it takes to support say packaged app upgrades from third parties without any downtime. Or sharing hierarchies.”

• SUSE buys Rancher. SUSE acquired Rancher Labs in what was rumored to be a major acquisition. Rancher’s original focus was first on Docker infrastructure before it pivoted to putting its emphasis on Kubernetes, once that became the de facto standard for container orchestration. Unsurprisingly, this is also why Suse is now acquiring this company. After a number of ups and downs — and various ownership changes — Suse has now found its footing again and today’s acquisition shows that its aiming to capitalize on its current strengths.

• Slack vs. Microsoft, round two. Stratechery, always good, had a great analysis of the Slack vs. Microsoft battle — one that included a great analysis of Microsoft’s current strategy: The combination of cloud and mobile started to break this integration apart: Microsoft’s misguided Windows-centric strategy meant that Office wasn’t available on the dominant mobile platforms, which drove companies to search out cloud-based alternatives, which made them much easier to both trial and support. That is why it was so important that Satya Nadella’s first public appearance as CEO was announcing Office for iPad, and why his greatest triumph was The End of Windows. The end of Windows as the center of Microsoft’s approach, and the shift to the cloud, though, did not mean the end of Microsoft’s focus on integration, or its attempt to be an operating system; the company simply changed its definition of what an operating system was…This is where Teams thrives: if you fully commit to the Microsoft ecosystem, one app combines your contacts, conversations, phone calls, access to files, 3rd-party applications, in a way that “just works.”

• IBM RPA meets AI. IBM bought WDG Automation, a Brazilian company, to fuse automation with AI. “Previously, IBM provided access to RPA tools via an alliance with vendors such as Automation Anywhere. Once the deal is closed IBM will be able to offer a more tightly integrated RPA alternative that would be more aligned with IBM’s overall artificial intelligence (AI) strategy, says Mike Gilfix, vice president of cloud integration for IBM.”

• MLOps is crowded. Chip Huyen reviewed and analyzed 200 ML ops tools. We’re biased, but we think Valohai is the best — and there is evidence that both Twitter and Uber agree.

• Nvidia is the most valuable chipmaker. Powered upwards by demand for AI, Nvidia has passed Intel as the most valuable semiconductor company.

How to Startup

• Enterprise software mistakes. Ten pearls of wisdom from Mark Tice on what not to do. “#7. Pricing that doesn’t match the sales channel. Subscriptions under $50K should only be sold direct if it’s a pilot leading to a much larger deployment. Customers should become profitable during year two of their subscription. Having a bunch of customers paying $10K/year (or less) might make you feel good, but you’ll get crushed if you have a direct sales team acquiring them.”

• Fat MVPs. Gabrielle de Vinzelles of Frst, a French VC, provides a very thoughtful analysis of what a “fat MVP” is and — more importantly — offers some strategies for how seed-funded companies can rise to meet these challenges on limited budgets. It’s an excellent piece — and captures a lot of what we look for at Angular Ventures.

• How SurveyMonkey found pricing fit. This detailed analysis of how SurveyMonkey approached repricing is worth a read. “Ultimately, going through the process led to a critical shift in the way SurveyMonkey incorporates pricing into the building and launch process for new product offerings. In the past, they focused primarily on product-market fit; but now they also consider price fit. They have flipped the whole thought process to put pricing at the front rather than on the tail end. The old way was to build a product, establish customer need, and set a price. Now, the team determines how they want to monetize a particular market, identifies the type of product that will make sense and maintains pricing as the constant thread throughout the product development cycle. It’s a whole new way of doing things, and so far it’s working out really well.”

• When you can’t find a Series A lead. Janelle Tam of YC offers some great tips for navigating a fundraising process without a lead investor. “In a syndicated round, there is a small coalition of investors writing similar-sized cheques. Because no one has stepped up to lead the round, it is a bit like a game of chicken where no single investor wants to commit until the others do. It’s also much harder to negotiate with multiple parties to find terms and pick a board member that everyone will be happy with. However, if you’ve run a full process and haven’t found a lead, pulling together a syndicate can be a good Plan B.”

• How to Board. Amanda Robson with a great thread on tips for good board meetings.

How to Venture

• Solo Capitalists. Nikhil Basu Trivedi names and analyzes the growing trend of Solo Capitalists. In response, some friends referred to me as a solo capitalist, but I am not sure Angular meets that description, as we have a (great) team, a deep network of advisors who are heavily involved with our portfolio, and a focus on early-stage investments. But it is undoubtedly true that in the recent overheated VC fundraising environment there are more and more funds — particularly in the US — that do seem to meet this description.

• Finding your edge. Ha Duong of Cambrian Capital analyzes what constitutes a VC’s “edge.”

• EU/IL VC fundraising. Yannick Roux released a detailed analysis of which VCs have raised what. “On the other end of the spectrum, 1st-time funds, which one would think should the most impacted category by unprecedented macro uncertainty, fared particularly well with 15 new funds and ~€770M in new capital (up ~50% in # and $ over Q1 and also mildly up over Q2 19). Congrats all!”

Portfolio News

Valohai was selected by Twitter to host the NeurIPS Conference black box optimization challenge on.

Vault Platform’s CEO, Neta Meidav, shared five steps we must take to create an inclusive, representative, and equitable society.