Europe/Israel Enterprise/Tech Weekly

The Angle Issue #25: May 21, 2018

Good morning - and welcome to Issue #25!

With the launch of Angular Ventures, the YSL Weekly is now the Angular Ventures Weekly. Needless to say, it's been a pretty busy few weeks....but more on that later. I'm delighted that Angular is out of stealth, and looking forward to backing early-stage enterprise tech companies out of Israel and Europe with this new platform.

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From the blog

There are only three startup stages. In my view, and despite all the semantic chaos (seed, pre-seed, post-seed, early A....) there are really only three "stages" for venture-backed startups, and they are all defined by the Series A round: The defining characteristic of early stage is that the company is not ready to start building out the machinery of growth. In the enterprise context, this means the company is still lining up the evidence and traction it needs to justify the Series A: building product, deploying product with early customers, demonstrating product/market fit, proving out the sales dynamics that will support efficient growth, and making sure that the team is in place to execute. 

2017 EU+IL VC Data. $20.3B of VC investment summarized in 74 slides. 

Europe/Israel Enterprise/Tech

• Sweden/Payment. PayPal acquired Swedish SMB payments provider iZettle for $2.2B in cash, just days after iZettle filed for an IPO on the Stockholm NASDAQ. iZettle was founded in 2010 and provides in-store (physical card present) payment solutions for small businesses in a number of European markets as well as Mexico and Brazil - a sort of European answer to Square in the US. The acquisition buys Paypal a significant presence in a number of important European markets and may help position PayPal against Square in the US as that market follows Europe towards chip & pin card. iZettle is a case study of near-perfect execution in scaling an SMB-oriented business in local European markets and positioning itself for an acquisition primarily because of geographic complementarity to a the US acquirer. A note of caution for those thinking about following in iZettle's local SMB footsteps: even after over $315M in venture funding and eight years of operations, iZettle was still operating at a loss. The moral of that story is that nailing an SMB play is very valuable if you get it right (as iZettle did) in large part because doing it well is so very costly and risky. 

• Israel/Cloud. Google acquired Velostrata, which provides technology to help migrate companies onto the cloud. The acquisition price was not disclosed. 

• France/Call Centers. Aircall raised $29M for its cloud-based call center solutions. 

• EU/Facebook. Mark Zuckerberg will meet (behind closed doors) with the European Parliament to discuss privacy issues. 

• Germany/Productivity. Dashdash raised $8M for its excel-like programming platform. Still invite-only but very intriguing to see a new paradigm for democratizing coding.

• Israel/Genomics. Genoox raised $6M for its high-performance genomic analytics platform.  

• Israel/UK/Agtech. Israeli plant health analytics company Taranis acquired the UK-born agricultural drone company Mavrx. 

• Germany/APIs. Prisma (formerly Graphcool) raised $4.5M for its open-source GraphQL framework that makes it far easier for applications to handle API calls. 

• Norway/Self-driving (slow) buses. The Norwegian ministry of transport has approved the use of autonomous buses in the city of Stavanger. The buses are limited to six passengers and 12 kph, but it's a start. 

Worth reading

• Must-read slide deck. Let me start by apologizing to my friends at Battery. I mentioned their amazing slide deck as the must-read item of last week - but mistakenly referred to another (equally great) VC as the author. Their deck on the current state of the software market is truly awesome - and definitely worth a look. In the future, I'll try to remember to have my coffee before putting the newsletter together. 

• Tech protectionism and the death of data flows. The FT had a fascinating piece on the increasing tendency of governments to block data flows is making it harder for companies to build global software solutions than ever before. "Governments have sharply increased “data localisation” measures requiring information to be held in servers inside individual countries. The European Centre for International Political Economy, a think-tank, calculates that in the decade to 2016, the number of significant data localisation measures in the world’s large economies nearly tripled from 31 to 84."

• The Hard Raise. My friend, the inimitable Parker Thompson, wrote about the degradation of due diligence in venture space. I couldn't agree more: "I see the problem being a bunch of small funds that aren’t doing the work founders would expect from them if they knew what they should expect. In effect, these funds are spreading chips around the board looking for the big win without being very deliberate (black swan roulette), which is a fine business model but not fully aligned with the company’s best interest...The hard raise isn’t necessarily fun, and it isn’t required, but the best founders impose the discipline on themselves and ideally to find partners who can help them maximize the probability of success in their portfolio of one." 

• A Profile of Masayoshi Son's Vision Fund. The Economist published a thoughtful profile of the mammoth fund. "Fundraising pitches are atypical of the tech world. A videoconference call to Tokyo with an awkward audio delay makes for stilted dialogue. After ten minutes Mr Son often interrupts, as one founder tells it: “Stop, I know. I’ve heard enough, how much do you want?” He then offers up to four or five times what the entrepreneur suggests. Any questions over what the firm would do with that much money and Mr Son threatens to put the cash into a rival, usually leading to capitulation. During talks with Uber, he threatened to invest in Lyft. SoFi, Didi, Grab and Brain Corp, which builds machine brains for robots, all got variations of the treatment."

• Data rooms? Just say no. Mark Suster of Upfront makes a very powerful case against the use of data rooms and provides actionable advice to startup CEOs on how to gauge the true interest level of a potential investors. (Hint: asking for data doesn't mean they are interested.)

• Echoes of 2008. Brad Feld of Foundry and David Frankel of Founder Collective reflect on the 10 year anniversary of Sequoia's infamous "RIP Good Times" deck. It's always good to remember that the music will stop at some point...and only a few startups will be able to keep dancing.

• Insights on DropBox. The always insightful Christoph Janz of Point Nine rips apart Dropbox's S-1 filing and finds ten interesting tidbits.

• Founder perspective on VC fundraising. Suhail Doshi, founder of Mixpanel, offered an awesome tweetstorm this week about fundraising from a founders perspective. A must-read for both founders and funders.

• A framework for evaluating early-stage startups. Clint Korver of Ulu Ventures on how he evaluates companies.

Portfolio News

Cloud66 CEO Khash Sajadi was interviewed on his use of Kubernetes: Using Google Kubernetes Engine, Cloud 66 autoscales to meet peaks in demand across time zones, saving 70% in computing costs while serving almost 4,000 customer workloads. It can operate at a global scale to meet daily peaks in demand across time zones; increase efficiency and reduce compute costs by 70%; and enable a powerful proof point for using its own container delivery pipeline and operations products to integrate with Google Kubernetes Engine.

CrateDB will present at Berlin Buzzwords data conference in June.

Front is hiring

An example of how to use Resin's OTA Manager in real life

SiSense release a guide on data dashboard best practices

JFrog held its massive SwampUp developer conference in Napa this week and announced Enterprise+, an end-to-end binary artifact management platform. The company also hired a new CFO, Jacob Shulman, as it continues to scale. His most recent role was as CFO of Mellanox (Nasdaq: MLNX).

Two blog posts from Rollout: Rodney Smith wrote In Defense of Shadow IT and Vasily Zukanov explained the basics of what a Rolling Deployment is.