Europe/Israel Enterprise/Tech Weekly

The Angle Issue #39: October 8, 2018

Welcome to Issue #39!

  
First investment. Last week, Angular announced our first investment, an Israeli company called Aquant which is building a system of intelligence for service optimization. Aquant’s enterprise AI platform uses machine learning to master an enterprise’s unique language and utilize it to maximize equipment uptime. Through AI and machine learning, Aquant enables companies to make smarter, faster, data-driven decisions by providing predictive actionable service recommendations. I’m thrilled to be working with Shahar and Assaf, Aquant’s die-hard founders.

First billion dollar company. Last week also saw the public announcement of a series D investment into JFrog. a company into which I led the first institutional financing round (a $3.5M series A) when I was at Gemini Israel Funds back in April 2012. Insight and Spark led a round of $165M at a valuation that has been publically described by the company as “over $1B.” Over the years, JFrog has become an essential part of the devops and IT infrastructure eco-system — and they have built an impressive sales, marketing, and R&D operation along the way. It’s awesome to have played a very small part in that company’s incredible story. Congrats to Shlomi, Yoav, and Fred!
 
Eagle-eyed readers might have noticed that this particular issue is actually a bi-weekly. I blame a pretty rough travel schedule that has taken me to ten cities on three continents in three weeks.

If you are building an enterprise tech startup in Europe or Israel (or know of one that is going to become the next JFrog) please let me know…

From the blog

Angular’s first investment: Why we invested in Aquant.io
1Q18 & 2Q18 EU+IL VC Data. $12.7B of VC investment. 70 slides.

Europe/Israel Enterprise/Tech

• Netherlands/Search. The IPO of Dutch search infrastructure company Elastic priced this week, with a corporate valuation of $4.9B. Elastic was founded by an Israeli entrepreneur, Shay Banon, living in the Netherlands. The company raised $104M on its way to IPO, initially from Benchmark, and then from Index, and ultimately from NEA. It’s a great example of a leading European enterprise tech company achieving a massive exit in the US, and it’s a great example of a hybrid European-Israeli company.

• Israel/Devops. JFrog raised $165M for its devops platform: “Founded out of Israel in 2008, JFrog’s two core products — Artifactory and Bintray — serve as an automated toolset for developers to manage and distribute software releases. Its self-stated mission is to provide an “end-to-end universal repository solution” for binaries, or software packages. ‘Software updates need to flow seamlessly, like water running through pipes,’ said Ben Haim. ‘This is what we call the ‘liquid software vision.’ From Git to Kubernetes and from your data center to the edge, software updates must flow anytime, anywhere with minimal effort. The JFrog platform will enable continuous software updates and propel us to become the company behind all software updates in the universe.’” It’s a grand vision — and the company has been executing against it brilliantly.

• Israel/Payments. Grubhub acquired Israeli Tapingo for $150M.

• Portugal/Contact Centers. Talkdesk raised $100M for its cloud-based contact center platform.

• UK/Security. Darktrace raised $50M at a $1.65B valuation.

• Israel/Fraud Detection. Forter raised $50M for its anti-fraud platform. (Go Michael!)

• Israel/Retail Analytics. India’s Flipcart bought Israeli Upstream Commerce for $40–50M.

• Finland/VR. Varjo raised $31M to build an industrial VR platform. (Congrats also to my good friend Chris Barchak who just joined Siemens’ venture arm, Next47, and led the investment on behalf of Siemens!)

• Germany/Monitoring. Instana raised $30M for its application performance monitoring tool.

• Israel/Security. Hysolate raised $18M for its secure software-defined endpoint solution.

• Israel/Security. The City of New York is moving aggressively to partner with two Israeli organizations to help build NYC’s position as a hub for the global cyber security industry. They have announced a partnership with JVP (an Israeli venture firm) and SOSA (an Israeli co-working facility with an NYC location).

• US/Immigration. Neeraj Agrawal of Battery shares his concerns that US immigration policies could ultimately harm the US’ status as the global innovation hub: “We have to change the immigration narrative in this country. If we don’t, this air pocket in innovation we’re creating by barring promising entrepreneurs will only grow, and that has dire implications for the U.S. economy and long-term growth.”

• UK/Web X.0. Tim Berners-Lee, inventor of the interwebs, wants to reinvent them completely: “Today, I believe we’ve reached a critical tipping point, and that powerful change for the better is possible — and necessary. This is why I have, over recent years, been working with a few people at MIT and elsewhere to develop Solid, an open-source project to restore the power and agency of individuals on the web. Solid changes the current model where users have to hand over personal data to digital giants in exchange for perceived value. As we’ve all discovered, this hasn’t been in our best interests. Solid is how we evolve the web in order to restore balance — by giving every one of us complete control over data, personal or not, in a revolutionary way.”

• Europe/Regulations. European regulators are gearing up to enforce GDPR.

Worth reading

Enterprise/Tech News

• Bot ban. California bans the use of bots to impersonate humans. “The measure bans automated accounts from pretending to be real people in order to “incentivize a purchase or sale of goods or services in a commercial transaction or to influence a vote in an election,” effective July 1, 2019. Automated accounts will still be able to interact with users, but they will have to disclose that they are not, in fact, humans, according to NBC. “

• The Hadoop world consolidates. “Cloudera, Hortonworks merger creates Hadoop leader amid framework’s decline.”

• Industrial IoT. A look at some key trends in the industrial IOT space.

• The five forces of food. How the food industry is changing.

• China and AI. The NYT on what we can learn from China’s approach to AI.

• Chaos engineering. Gremlin,a US startup, raised $18M to bring chaos engineering into the enterprise. New paradigms in IT are rare, so this seems like a big deal.

• AI explainability is a big deal. According to the WSJ: “Concerns about transparency and ethics in artificial intelligence are mounting, prompting cloud services companies to launch new tools that explain the decision-making behind their AI algorithms.”

• HW hack. In what might have been one of the greatest hacks in history, China might have put tiny chips into some Apple computers. Or maybe they didn’t. No one seems to be sure.

How to Startup

• Benchmarking. Front’s amazing CEO Mathilde Collin on benchmarking against other companies. “As a founder, I wanted to make sure my company wasn’t falling behind, so I always kept a close watch on these benchmarks and how we were doing against them. If we happened to fall far from the norm, I’d worry, and if we were right on it, I’d make sure we didn’t deviate. However, I’ve recently come to the realization that this approach can be flat out dangerous for a growing company.”

• A guide to UK tax incentives for startups. It’s a guide to UK tax incentives for startups. :)

• It never gets easy. Techcrunch has some highlights from Evan Spiegel internal memo about how to rescue Snapchat. (No, not enterprise, but an interesting look at the endless struggles that even “successful” companies inevitably face.)

• Enterprise go-to-market. Martin Casado at A16Z had this great tweetstorm on how enterprise go-to-market is changing. I wish this guy blogged. Click for the tweetstorm: “Traditional enterprise GTM strategies are being eaten from the bottom by bottoms up adoption (SaaS, open source, dev tooling) and from the top by services.”

• Proprietary data. My friend Jake Saper from Emergence on how a startup can generate a proprietary dataset. “Proprietary data is the fuel that can turn empty, commoditized workflow software into rich, defensible recommendation engines. To build these engines, the datasets must also have a “closed-loop”, or a set of inputs which drive outputs. Generally speaking, the way the math of machine learning works is that actions are correlated with outcomes and constantly recalibrated to improve accuracy. If all you have is inputs, like what ads users click to get to your website, but no outputs, like what they bought, you aren’t going to be able to train the AI to do anything.”

• AI SaaS funding napkin. The brilliant Louis Coppey of Point Nine Ventures updated that firm’s SaaS funding napkin for the AI world. It’s good and focused and definitely worth a look. (I’d argue that the part that fits on a napkin is never really the part that drives VC returns, but it’s still a really good piece of work — and it’s important to know what’s on the napkin so you can know when you are “off napkin”.)

• The trick to Series A is to nail the seed. This has been my playbook for a decade — but now David Frankel of Founder Collective is sharing the secret.

• YC is changing. Founders should be aware of how YC is changing. More money, more software, and more support.

• Second seeds are the new normal. Hunter Walk says second seeds are the new normal.

• Crypto apps before crypto-infrastructure. USV argues apps should come first in the Myth of the Infrastructure Phase. (Meanwhile, Yale’s storied endowment is plowing into crypto.)

How to Venture

• Howard Marks is worried. Howard Marks of Oaktree Capital is worried that there is “too much money chasing too few deals.” As an investor, he knows those to be the Seven Worst Words in the World, and all investors (in all asset classes) should take heed and stay super disciplined.

• Benchmark. I’ll admit it. I’m a bit of a Benchmark groupie. They have raised a new fund.

• Softbank. Bloomberg has another deep dive look at how Softbank operates its Starkiller Base Venture Fund. There have been a few articles on this topic, but I find it endlessly fascinating. It is a sort of Rorsarch test, I think: Tell me what you think of Softbank, and I will tell you your venture philosophy. Here’s a snippet: “One of the slides included the proposed size of the fund: $30 billion. The figure would make the Vision Fund, as Son had named it, about four times the size of the largest venture capital fund ever created and bigger than any private equity fund in history. Son stared at the number for a moment. Then he deleted the three and replaced it with a one and another zero. “Life’s too short to think small,” he told a stunned Misra.”

• One can never be humble enough. Techcrunch has this piece on the recent blowups at some Silicon Valley darlings. “Young founding partners debuting change-the-world funds were irresistible for chroniclers of the venture world, who too often had been forced to chat with balding and aging managing directors while hitting the links at resplendent country clubs. Everything was going to change in the venture world, and here was a new guard of progressive-thinking talent that would transform Silicon Valley forever. Then it all came crashing down.” A good reminder to stay super humble and keep your eye on the ball. As my once boss, always mentor, and now Venture Partner Ron Yachini said to me: “one can never be humble enough.”

Portfolio News & Jobs

• JFrog raised $165M for its devops platform.

• Angular announced its first investment: Aquant.io

• Aquant launched its AI solution on Salesforce’s App Exchange.

• Front CEO Mathilde Collin on benchmarking against other companies.

• Innovid named Hulu as its first partner in its new self-serve ad composer for connected TV

• A chat with Jamus Driscoll, CEO of Moltin.

Portfolio jobs:

• Vault is hiring developers for front end and back end. Location flexible.

• Cloud66 is hiring software engineers in London.

• Datos is hiring a BD lead in the US.

• Moltin is hiring for multiple roles in the US and UK.

• Resin is hiring globally.

Angular Ventures

I am the founder of Angular Ventures, a specialist early-stage enterprise tech VC firm based in London and Tel Aviv.

Angular backs companies born in Europe or Israel with the ambition to define a category and achieve global leadership, usually by starting with the US market.

You can follow me on Twitter and Medium. If you are running an early-stage start-up in the enterprise space anywhere in Europe or Israel, I’d love to hear from you to see if Angular can help. You can find a list of past and current portfolio companies here.

Yours,
Gil Dibner

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