Europe/Israel Enterprise/Tech Weekly

The Angle Issue #35: August 20, 2018

Hello from Tel Aviv, where I’ve turned Cafe Alma in Bazel into the HQ. If you are around and want to grab a coffee…let me know!
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This week’s must-read is the annual report by my friends at WorkBench, an enterprise-tech focussed VC firm based in NY. The report is a 121-page powerpoint, called the “Mary Meeker Report of the Enterprise World.” It’s awesome. This year’s report focuses on four areas: machine learning, cloud-native infrastructure, cybersecurity, and the decentralization of SaaS. It’s this last theme that, to me, is the most intriguing. The report argues that while back-office and front office SaaS giants will rule the roost in the medium term, the emerging world of rapid cloud deployment (driven by the flexibility now available from APIs and microservices) will eventually start to eat away at the moats protecting the SaaS giants….worth a read. I will be reading this one again for sure.
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Clickbait nonsense. Bloomberg Businessweek put out a piece this week asking “Why Can’t Europe Do Tech?” While the piece does do a good job of highlighting the challenges some of Europe’s high-flying consumer tech companies are facing, it offers little in the way of prescriptions to address the perceived problems or data to quantify their scale. On the one hand, you can probably skip the article without missing much. Having been on the ground now in Europe for six years, I can state categorically that the idea that Europe can’t do tech is simply wrong. But on the other hand, the article acts as a reasonable summary of the public relations challenge that European tech continues to face…
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Please feel free to email me with comments (or startups) and if you like this — please forward to friends. Thanks!

From the blog

1Q18 & 2Q18 EU+IL VC Data.
$12.7B of VC investment summarized in 70 slides.

Europe/Israel Enterprise/Tech

• New powers for CFIUS. How a new piece of US legislation called FIRRMA (Foreign Investment Risk Review Modernization Act) threatens to make life somewhat more complex for any entrepreneur or VC operating outside the US. “FIRRMA expands the power of the Committee on Foreign Investment in the U.S. (CFIUS) to scrutinize foreign investments into “critical technology” companies for national security implications… Ultimately, under FIRRMA, the government will now be able to review — and potentially reject — any investment by a foreign entity in a critical technology company that gives the foreign entity: (1) access to any material non-public technical information of the company; (2) membership or observer rights on the company’s board or equivalent governing body; or (3) any involvement in substantive decision-making of the company, other than through voting of shares. Under this approach, the typical venture fund ought to be able to avoid a CFIUS filing because its foreign LPs won’t meet the above factors. And many direct investments into startups will also avoid filing with CFIUS unless they’re leading to board seats, non-public information about the company or decision-making capability.”

• The AI horserace. Gleb Chuvpilo of Thundermark takes a look at the amount of AI/ML research coming out of each region. “The resulting chart roughly [follows] the Power Law distribution with a factor of 3: the United States is in clear lead with a Publication Index of 414, followed by Western Europe with an index of 136, and China being the distant third, with an index of 39.”

• Germany/Fintech. Deposit Solutions raised $100M for a software platform connecting banks to non-customer borrowers.

• Germany/Genomics. Shivom recently completed a $35M ICO for a token design to power a decentralized database for genomic data. “Shivom’suse of blockchain technology and smart contracts ensures that all genomic data shared on the platform will remain anonymous and secure, while its OmiX token incentivizes users to share their data for monetary gain.

• Israel/Security. Twistlock raised $33M for its serverless security tools.”

• Israel/Personalization. Dynamic Yield raised $32M. Here’s an article by Viola’s Natalie Refuah on why they led the round.

• UK/Insurance. An interview with Tractable founder Alex Dalyac on how the company is using AI-powered image processing to accelerate insurance claims processing.

• Israel.CRM. Israel’s Yotpo acquired Swell Rewards, a Boston-based incentive marketing company/

• Israel/Electric Vehicles. Driivz raised $12M for it’s SaaS platform for managing electric vehicle charging networks. Investors included British energy company Centrica.

Worth reading

• All that and a fab of chips. Forbes on why tech giants such as Tesla, Apple, Google, and Amazon have been quietly bringing chip development in-house: “The main reasons for Musk’s decision are a combination of performance and control, with the price of the custom chip being the icing on the cake as it will end up costing less than the current Nvidia chips.”

• Two crypto theses. Two European VCs, Julia Morrongiello of Point Nine and Wendy Xiao Schadeck of NorthZone, published their crypto investment thesis recently. Julia presents a list of six weaknesses of the current crypto stack that could each be the genesis of a group of interesting companies. Wendy offers a look at the current state of the crypto market, providing an intriguing comparison of “firms vs. protocols.”

• Google’s All about AI. CB Insights published a detailed look at how AI is central to Google’s long-term strategy.

• Intel is all about AI too. Here’s their strategy for winning in the AI market.

• Selling. Fred Wilson on selling, the third discipline of great investing: “The conventional wisdom on selling is that an investor should set a target price when they buy and once an investment reaches that target price they should sell. That approach doesn’t work very well in venture capital because as a minority investors in an illiquid investment, we don’t control the sell decision. That doesn’t mean I/we don’t have targets when we make our investments. But it does mean that we don’t usually have the ability to do sell when those targets are hit. And, as a result of this dynamic in venture capital, I have learned a different lesson over the years about selling and that is to let your winners run and sell everything else.” Fred also addresses his approach to disposing of stock distributions: “I have developed an approach for selling stock that is distributed to me. I like to sell one third of the position immediately, put one third away for a long-term hold, and actively manage the other third…”

• AI and the law. How automated tools are helping to level the playing field for small law firms competing with giants, including a shoutout to Israel’s Lawgeex.

• A guide to your first press release. Avigail Levine, formerly of Aleph and now of Datos (an Angular portfolio company) on how to get your first press release out effectively.

• Five new rules of B2B sales. Anthony Iannarino argues that the world of selling B2B has fundamentally changed and that B2B salespeople must take much more responsibility than previously.

• Training robots in VR. How researchers are using simulated virtual reality to train human-like robots.

• Off Facebook. Brad Feld, one of the VCs in the US, on why he’s stepping out of the Facebook world.

• Mortality. A thoughtful piece in the NY Times on why life is short and that’s the point. Also, the Economist confirms that, yes, your job is killing you.

Portfolio News & Jobs

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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