Enterprise & Deep Tech Weekly

Issue #98: For the two-weeks ended December 16, 2020

A big week for our portfolio. We try not to focus this newsletter on our portfolio or our fund. But this was a pretty big week for our founders, with the announcement of two major financing rounds:

Candu finally announced their round led by Two Sigma and CRV. They are building a no-code front-end editor designed to fully democratize front-end development for software teams. It’s a big ambitious vision and a great example of what we try to do at Angular. We met Jonathan (American) and Michele (Italian) in London, as they emerged from an accelerator program with a demo that was just a faint shadow of their ultimate vision. We got to know the team well and began to understand the depth of vision. We leveraged our advisory partner model to connect them with some very relevant people who helped accelerate their product strategy. When Jonathan relocated back to the US (long before Covid), they started operating remotely and internationally. We were excited to back them at pre-seed (with our friend Semil Shah) and again more recently with our friends at Two Sigma and CRV.

Firebolt also announced their $37M in funding, led by Zeev Ventures together with Bessemer and TLV Partners. Oren Zeev is one of the most successful VCs in the Israeli eco-system, and an absolute pleasure to work with. He’s also one of the kindest people in venture. We were particularly thrilled to back Firebolt as their first pre-seed investor because of our long-standing relationship with Eldad Farkash, who founded SiSense (a previous investment of mine) and has served as a Venture Partner at Angular since long before it was clear we’d manage to raise a fund at all. For more on Eldad and our investment in Firebolt, please check out my blog post. I also wrote a more technical/product-oriented post that tries to shed some light on how we see Firebolt fitting into the emerging cloud-native data eco-system. More VCs are lucky to meet a founder as technically brilliant and entrepreneurial gifted as Eldad once in their career. I consider myself truly blessed to be able to partner with him a second time, to count him as a Venture Partner at Angular (where he is already impacting several portfolio companies), and — most important — to count him a friend.

Here’s to next year! Thank you to everyone who reached out to say hi, happy holidays, or happy New Year over the past few days. Despite the distance imposed on us all by Coronavirus, it’s the personal relationships that get built up over years that mean the most in this business.

Anne, Andrew, and I — as well as the extended Angular team of advisors, venture partners, and founders — wish you all a wonderful holiday season, a restorative break with as much family as possible, and a bright start to 2021! See you in January!

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.

• February 24: Lemonade — Building an Engineering Organization from Startup to IPO with Erez Dickman, Vice President of R&D at Lemonade

• We’ll be announcing more sessions soon…..stay tuned!

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

From the blog

Why we invested in Firebolt: Next-gen cloud-native data warehouses (& Eldad Farkash)
Why we invested in Candu: Democratizing Front-End Development
US Immigration: Updates in US Immigration Impacting Founders
Going to America: Lessons on moving to the US from Israeli startups
JFrog Investment memo: What JFrog looked like in April 2012
Milestones, gratitude, and the challenges ahead: Reflections on an IPO and the ones that got away
League Tables: The most active US VCs in European & Israeli Enterprise Tech
The Data: Enterprise & Deep Tech VC in Europe & Israel
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.

Europe/Israel Enterprise/Tech

• A summary version of the State of European Tech. Atomico published its massive annual report on European tech. Sifted, however, helpfully — um — sifted through it to find the best parts.

• Germany/Startups. Germany announced a EUR 10B “future fund” to support startups. Good. I was worried there wasn’t enough money in the system. ;)

• Israel/IPOs. Prepping for a tsumani of Israeli tech IPOs.

• Israel/Hybrid Events. Bizzabo raised $138M for its events platform that helps organizers create, manage and measure events that take place in person, online, or some combination of the two, what the tech events space is calling “hybrid.”

• UK/Email Signatures. Exclaimer raised $135M for its email signature management company.

• Sweden/Open Banking API. Tink has raised $103M for its API that offers a broad range of high-quality financial data from banks across Europe so companies can provide smart financial services — or engaging in new customer experiences.

• Israel/Cloud Security. Wiz has raised $100 million for its cloud security product which allows for seamless scanning of the entire cloud environment across all compute types and cloud services for vulnerabilities, configuration, network, and identity issues without agents or sidecars.

• Germany/Space Launcher. ISAR Aerospace has raised $91M for its micro-satellite launcher that’s significantly smaller and thus less pricey than bigger launchers on the market today.

• Israel/HR. Hibob has raised $70M for its human resource information system platform, integrated into many systems including ERP systems to communication providers like Slack.

• Israel/Cloud Security. Orca Security has raised $55M for its a cloud security platform that map and scan a company’s entire data estate and its cloud assets to identify potential security issues.

• Israel/Data Warehouse. Firebolt (an Angular portfolio company) has raised $37M for their next-generation data warehouse to work faster, more efficiently and at a lower cost.

• Israel/API Cyber Security. Salt Security raised $30M for their software that automatically protects APIs from cyberattacks.

• Israel/Construction Site Data. Versatile has raised $20M for its platform and piece of hardware designed to be mounted to a crane is capable of capturing and analyzing data across the construction site.

• France/Business Forecasting. Pigment has raised $25 million to help SMEs and entrepreneurs with revenue forecasting and strategic planning.

• Germany/Customer Service. Ultimate.ai has raised $20M for its customer service automation platform.

• Sweden/Sales Enablement. GetAccept raised $20M for its sales enablement software for digital and remote selling.

• Israel/Construction Site Data. Versatile has raised $20M for its platform and piece of hardware designed to be mounted to a crane is capable of capturing and analyzing data across the construction site.

• Israel/BAAS. Unit Finance raised $18.6M for their platform that lets third parties integrate banking services like payment cards, checking accounts, cash advances, and money transfers into their own businesses by way of an API.

• UK/Payments API. Primer raised $18M for its low-code payments infrastructure and online checkout API.

• France/Business Forecasting. Pigment has raised $25 million to help SMEs and entrepreneurs with revenue forecasting and strategic planning.

• Germany/Customer Service. Ultimate.ai has raised $20M for its customer service automation platform.

• UK/Slack Alternative. Sedna raised $10M for its workplace communications startup, opportune timing considering the Slack news this week.

• UK/Food Robots. Karukuri raised $8.2M for their food robots. Recently that company unveiled its first automated canteen to make meals.

• UK/Real Estate Analytics. Infogrid has raised $15.5M for its Platform combines IoT sensors with proprietary AI analysis to enable businesses to reduce the environmental and social cost of their buildings.

• Germany/Ticketing API. Vivenu has raised $14.7M for its a ticketing platform that offers an API for venues and promoters to customize to their needs.

• Israel/Data Observability. Databand has raised $14.5M for their AI-based observability platform for data pipelines.

• UK/Synthetic Video. Papercup raised $10.5M for software to dub videos with AI-generated speech.

• Netherlands/Legal Automation. Contractbook raised $9.4M for their legal tech automation company that helps its customers manage the contract lifecycle from end to end through data-driven document automation.

• UK/Frontend. Candu (an Angular portfolio company) announced a $5M round for its democratized front-end development toolset.

Worth reading

Enterprise/Tech News

• The cloud-only world. Jerry Chen defines “cloud-only” as the next major evolution of the IT stack. Readiness and relevance for a cloud-native / cloud-only environment is increasingly becoming an essential part of every investment thesis at Angular Ventures, and Jerry does a great job of explaining why. “Why does being only on the cloud matter? Software from cloud-only companies possess a subtle — but important — distinction from software that was formed during the cloud transition. Hybrid infrastructure stacks built during the transition were developed to run on-premise in a static environment, and then ported over to run on the cloud. Essentially, they treated cloud compute, storage, and networking like on-premise stacks operated by a third party. Conversely, software written for cloud-only assumes logical disaggregation of compute, storage, and networking, meaning it can take advantage of the intrinsic elasticity of the cloud…..Now, there is a cadre of startups that were founded specifically to meet the expanded needs of the cloud generation. Led by founders who worked at iconic tech companies that rose to the top during the cloud transition, these companies recognized the need for more powerful tools for observability, data, analytics and security.” (Our investment in Firebolt is a great example of this.)

• 2021 Predictions. The Information offers a set of predictions for 2021. These posts are usually pretty awful, but this one is good. “Either Databricks or Redis, both enterprise software companies that focus on data, will be acquired by a larger software company.” and “Median valuations for early-stage startups, already at records, will keep climbing. That’s largely because VC investors — which had $153 billion in dry powder at the end of March, according to PitchBook — have the money to compete for deals and offer founders favorable terms.”

• B2B Market Basics. Julia Morrongiello at Point Nine offers a thoughtful overview of B2B marketplace dynamics with examples of companies that illustrate each of her points.

How to Startup

• Effective boards. My friend and co-investor Avidan Ross at Root Ventures highlighted this awesome thread by Frank Rotman on healthy BoD dynamics. “If a CEO doesn’t take stock of the experiences and skills of his/her Board members and engage with them outside of Board meetings on topics that take advantage of their profiles, then the CEO is setting themselves up to receive generic advice in Board meetings. My two cents: The best run companies push all the important input gathering, problem solving and decision making outside of the Board room. Great Board meetings are organized, holistic, topical, and great at level setting but not where the real action is!”

How to Venture

• Regional seed funds. Angular has been preaching the gospel of sector/strategy specialization since the first page of our first fundraising deck in 2015. This great analysis by Ian Sefferman, a VC with Assembly Labs in Detroit, is one of the most powerful arguments in favor of this strategy. Covid has just accelerated a trend that has been going on for a long time. As Ian puts it: “Location arbitrage is a losing strategy post-COVID.” He goes on: “For a founder, then, the choice will be very simple: start your business wherever you want and raise from the best investors on the best terms, regardless of their location. Zoom has become the cheap flight to SF/NYC that we’ve never had before. The losers of this shift, of course, are the regional seed funds who no longer have a location arbitrage opportunity.” At Angular, we couldn’t agree with Ian more. We’ve always invested as if we were competing with the best VCs in the world — never assuming that our geographic focus (Israel and ALL of Europe) would insulate us from the competition and somehow allow us to lower the bar. On the contrary — our geographic focus has always been a driver to raise the bar. Furthermore — we’ve worked hard to build a product as a VC firm that we think should appeal to the best founders out there…

• The year of fundraising. Contrary to what many of us (including me) expected in March, 2020 has turned out to be a banner year for fundraising. The Economist looks deeper. “It is still too early to tell what firms will do with all that cash. The merger market is showing signs of life, though mostly as deals put on ice during the pandemic are being revived. Many companies will content themselves with maintaining liquidity, at least until a covid-19 vaccine becomes more widely available. Startups, for their part, will use ipo proceeds to blitzscale their way to profitability. The pandemic has made business models that might not have matured for years, such as digital health, suddenly viable. Many will fail. But for now giddy investors are pouring money into any firm whose ipo prospectus features the words “digital”, “cloud” or “health”. Headier still, “special purpose acquisition companies”, which go public with nothing but a promise to merge with a sexy startup later on, and which have raised $70bn in 2020, mostly on Wall Street, are shattering previous records.”

• Why so many companies are getting formed? According to Gokul Rajaram (one of the nicest people in tech) it’s not just the massive overhang of capital. It’s covid causing people to rethink their careers. The observation was part of a short but very wise Twitter thread.

Portfolio News

Firebolt raises $37M to take on Snowflake, Amazon and Google with a new approach to data warehousing.

Candu raises $5M to help software companies onboard users intelligently.

Crux OCM’s CEO, Vicki Knott, is breaking down gender barriers in the oil and gas industry.

DUST Identity is helping guarantee transparency throughout the supply chains through its authentication technology that uses diamond dust to link physical items with their digital history.

Vault Platform’s CEO, Neta Meidav, joined a lively panel hosted by the London Stock Exchange on emerging risks in a post Covid-19 world.

Planable launched their advent calendar for marketers, where they will be sharing a gift every day until Christmas.

JFrog is transforming the world of DevOps.