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Europe/Israel Enterprise/Tech Weekly
The Angle Issue #74: For the two weeks ended March 31, 2020
Angular Ventures
March 30, 2020
Europe/Israel Enterprise/Tech Weekly
The Angle Issue #74: For the two weeks ended March 31, 2020
First, the bad news: the global VC market has completely locked up, and we don’t yet know when that will change.
The good news, however, is that we know this crisis will, ultimately, pass. Last Tuesday, we gathered our entire portfolio together on a Zoom call. Despite the enforced distance, we are managing to build a community and some sense of shared destiny. Witnessing how teams are rising to the challenge of getting through this period is incredibly heartening.
We are also continuing to explore investment opportunities. While our bar is extraordinarily high these days, we continue to be impressed by the quality of teams we are meeting and the quiet resolve of founders across Europe and Israel to make it through to the other side.
This week's "must" is a podcast discussion with Bill Gurley and Chetan Puttagunta of Benchmark. They touch on the downturn and what it means for operators and investors to work through cycles. Timely and absolutely worth a listen.
Finally - my colleague Andrew Poesaste is working to compile a list of virtual demo days across Europe and Israel. Please check out the list and contribute to it here.
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
Surviving Coronavirus. A guide for founders and some resources on remote work. Also, some straight talk on VC fundraising in 2020.
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
UK/Data Storage. SoftIron raised $34 million to revolutionize the enterprise data center. Optimizing the performance of open-source software for hyper-scale and SMB data centers.
Israel/BI. Pyramid Analytics raised $25M for its business intelligence platform that gives organizations visibility into their operational data to react quickly to business changes.
UK/Log Analytics. Humio raised $20M for its software that lets companies log everything and get answers to anything in real-time from application service down-time to cyber-attacks.
Germany/Electric battery analytics. Twaice raised $12M for its software that is already used in trucks, cars, e-scooters, and stationary power storage. The software creates a “digital twin” of battery systems by utilizing sensor data, and physical and data-driven battery models. From here it claims to be able to analyze and make accurate real-time predictions about the “health status” of an energy storage system.
Israel/Facial Recognition. Microsoft divests from a controversial facial recognition startup.
Israel/Coronavirus. How Israeli startups and VCs are reacting to the pandemic. "Interviews with many of the leading players in the Israeli tech industry create an image of a quick chain reaction, almost as exponential as the coronavirus infection graph. Many startup companies have started letting employees go in recent weeks. Others are cutting wages—the same ones that ballooned in an unprecedented way in recent years as demand for skilled tech employees in Israel outstriped supply. People in the industry are talking cuts of around 20% on average, with some shaving off as much as 40%." In addition, Israel's fabled Unit 81 has joined the fight.
Worth reading
Enterprise/Tech News
Lower cost AI. Google researchers have open-sourced a framework that reduces AI training costs by 80%.
Picks and shovels for AI. Rob Toews of Highland is bullish on opportunities for AI tooling. "At present, a mature ecosystem of machine learning developer tools simply does not exist; machine learning itself remains a nascent discipline, after all. As a result, ML practitioners generally manage their workflows in ad-hoc ways: in documents saved on their local hard drives, in sequentially-adjusted file names, even by hand. These methods are not sustainable or scalable for production-grade machine learning deployments."
Open-source ventilator. Medtronic is open-sourcing the design for one of its ventilators.
How to Startup
Before you get punched in the face. Dan Hockenmaier with a great framework for thinking through scenario planning. First, he advocates thinking through v-shaped (contained loss), U-shaped (significant value loss, and L-shaped (significant and perpetually growing loss) scenarios. Next, he recommends thinking through how value destruction is distributed. "Are my customers actually churning, or just going dormant?...Has underlying customer behavior actually changed?"
Did you get the memo? Ed Sim of Boldstart finds a way to be even more blunt than I have been (which is saying something!). "Sh*t is bad."
AirBnB trims expenses. How the hospitality giant is cutting costs.
Running remote. How Amazing is running remotely. "For example, Amazon recently handed employees working on upcoming Echo smart speakers and other devices a checklist of rules for keeping prototype hardware products confidential if they bring them home. The company has ordered them to keep the devices covered when not in use, to avoid placing them near windows where strangers could catch glimpses of them and to remind housemates that the prototypes are confidential, according to guidelines seen by The Information. And if housemates happen to work for Amazon competitors, employees must get a greenlight from an Amazon vice president to bring prototypes home, the guidelines say."
How to Venture
Selling into a crisis. Phil Venables with some timely advice on sales tactics in an era of crisis. "Sell to the need - not the situation. In times of any crisis, people are managing and adapting to it 24x7. They know their problems all too well and so will most likely react negatively when being “educated” to what their situation is. Rather, most people will be tuned to the problem they have and any matter of fact messaging about what your product does will be picked up. For example, most people have been busily expanding their remote working/collaboration capabilities and capacity and will likely be ripe to hear about anything that can help them with that - you don’t need to mention it’s because of Covid-19, or any other crisis."
Secondary? Think again. According to Connie Loizos, the market for secondary sales appears to have ground to a halt along with the VC market. "“Up until last week, everyone was calling to get old pricing,” says Hans Swildens, the founder of 20-year-old Industry Ventures in San Francisco, an investment firm that invests in hundreds of venture funds and is also among the industry’s biggest buyers of secondary shares. “It was, ‘Hey, we reconsidered this offer. Could you pay me what the market was paying last month?’ ”Swildens says that everybody in the secondaries market said no. They had no choice. “It’s almost impossible to buy when you don’t know what numbers you’re buying against. Buyers don’t know how far the [net asset value] of funds will go down. No one wants to buy something for $10 million that might be worth $5 million [in the not-too-distant future].”"
Fund size. Dan Primack thinks funds will not come under pressure to get smaller due to Coronavirus. He points out that this did happen in 2000, but not in 2008. "The dotcom crash was a slow burn that took nearly a year before limited partners agitated for fund size cuts. One big reason that we didn't see the same moves in 2008–2009 was that the recovery began in relatively short order. It likely will be harder to restart the U.S. economy than it was to shut it down, but most LPs I've spoken with believe that we'll at least be heading in a positive direction by Q3."
Portfolio News
Datos Health introduced a coronavirus telemedicine program for hospitals to provide online symptom-checking and video consultations to COVID-19 patients who don’t need hospitalization.
Vault Platform reported a rise in coronavirus-related racial discrimination at workplaces and launched a new COVID-19 reporting feature.
Aquant launched a Service Leaders Slack workspace to help field service leaders support each other during this challenging time.
Planable will be hosting a webinar this Thursday on ‘Content Planning During Crises’.
Portfolio Jobs
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Aquant.io
Datos Health
DUST Identity
Valohai
Vault Platform
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