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Europe/Israel Enterprise/Tech Weekly
The Angle Issue #78: For the week ended May 5, 2020
Angular Ventures
May 05, 2020
Europe/Israel Enterprise/Tech Weekly
Issue #78: For the week ended May 5, 2020
Two big announcements from Angular Ventures today: our Insights series and the release of our Coronavirus Impact Survey
Insight Series: Starting next week, we are going to be launching a series of short, focused, and easy-to-consume interactive webinars for early-stage enterprise tech founders anywhere. Each webinar will be a condensed 30-minute interactive session on a topic, with a quick presentation by a subject-matter expert, followed by audience Q&A – allowing you to hear some perspectives and get back to your day - hopefully a bit wiser and refreshed. These will generally take place on Wednesdays at 7am Pacific / 10am Eastern / 3pm UK / 4pm CET / 5pm Israel.
Our first 30 minute session - next week on Wednesday May 13 - is with Uri Baruchin, an award-winning creative strategist and branding expert (and a part of Angular's extended team). Uri will be sharing his learnings from working across B2C and B2B with both household names and early-stage startups. Key branding topics will be covered in this webinar, including: how and when early-stage startups should invest in their branding, naming, pivots, and more. Click here to register and stay tuned for upcoming sessions include with Jerry Dischler, Martin Henk, Yaron Galai, Christina Fonseca, Geatan Gachet and others.
Coronavirus Impact Survey. Today, we also released our Coronavirus Impact Survey - a detailed survey of 128 founders across 28 countries. The results paint a stark portrait of the widespread impact of the Coronavirus recession on founders across industries, stages, and countries. While some are thriving, over half have already seen a significant impact to sales and sales cycles. The report is one of the broadest and more detailed surveys of what is going on in this climate - and it's impossible to summarize in a brief paragraph. Here are two graphs that show some of the findings:
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.
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
Israel/Mobility. Intel announced its intention to acquire Moovit for $900M. The deal, which, reportedly took place over Zoom, is apparently part of Intel's longer-term strategy for mobility which had previously led it to acquire Mobileye. "We realized that Moovit fits in well with Mobileye’s wider vision, to become not just a technology provider, but to build a mobility solution from start to finish. We are building ourselves up as a vertical company and Moovit is a part of that puzzle.”
UK/RPA. Microsoft is in talks to buy Softomotive.
Israel/Retail tech layoffs. Trax laid off 120 workers as Coronavirus hit its primary customer base: retailers.
Israel/Connected Car. Otonomo raised $46M for its car data services platform that securely ingests automotive OEM data, then reshapes, enriches and protects it so companies can use the data to develop a host of apps and services for fleets, smart cities and individual consumers.
Spain/HR Automation. Factorial raised $15M for HR automation platform letting companies save time with administrative human resources tasks.
Switzerland/Quantum. Terra Quantum raised $11 million for its hybrid quantum algorithm, which is currently undergoing experiments.
UK/Genomics Data. Lifebit raised $7.5M for its medical research, genomic data analytics platform.
Czech Republic/Adversarial Attacks. Resistant AI raised $2.75M for machine learning technology is designed to be deployed on top of AI systems used for financial decision making to protect customers in markets such as financial services and ecommerce from attacks such as targeted manipulation, adversarial machine learning and advanced fraud.
Finland/Auto Apps. AppGyver raised $2.3M for its No-code visual platform, where users can craft a professional-grade app with simply drag and drop.
Germany/DevOps Testing. Checkly raised $2.25M for its monitoring and testing platform for DevOps teams.
Worth reading
Enterprise/Tech News
Peak ML engineers. Luke Posey argues that in 10 years, machine learning engineers will not exist. "It’s my earnest belief that the role of Machine Learning Engineer will be taken over entirely by the common software engineer. It will transition to a standard engineering role where the engineer will get a spec or reference implementation from someone upstream, turn it into production code, and ship and scale applications."
ProCore pulls IPO. Construction SaaS giant ProCore has canceled its plans to go public and has raised private capital instead.
Figma raises at $2B. The collaborative design startup is beefing up for hard times and acquisitions.
IBM gears up for faster AI and cloud adoption. IBM CEO Arvind Krishna, who took over in April, is working to position the company for the years ahead. "In recent years, IBM has bet on hybrid cloud computing, in which companies use a combination of their own data centers and computing resources leased from others and accessed online. The hybrid cloud was key to IBM’s 2019 acquisition of Red Hat Inc., an approximately $33 billion deal in which Mr. Krishna played a key role. It also has placed a major bet on the adoption of AI by corporate users. Mr. Krishna said the company believes the marketplace adoption of hybrid cloud technology is only about 20% complete, and that the adoption of AI is about 4% complete."
The verticalization of Zoom. JJ Oslund breaks down how Zoom might get disaggregated. "Video is the best solution for jobs that require establishing a closer human connection — whether that means building trust, negotiating a deal, or forming a friendship. Vertical applications are best able to facilitate this human connection in the context of a particular job at hand."
Good for AWS? Some data suggests that the pandemic has accelerated AWS adoption.
The oracle is nervous. Not technically a tech story, but this perspective on Warren Buffet's posture is worth a read. “We have not done anything, because we don’t see anything that attractive to do.”
How to Startup
Offense and defense in a down market. This week's must-read is by Elad Gil on how to think about managing a startup in a difficult and worsening market. It's practical and smacks of hard-won wisdom. Here's one quote: "Valuations that look cheap in a given moment may look expensive 6 months later during volatile times. In good times you should optimize for valuation. In bad times, you should optimize for speed, simplicity, and buffer." And another: "If you sell to enterprises, go through your customer list. If you have revenue concentration, look at your top N accounts. Do you have travel, local governments, retail, real estate, or other customers? If so, which are high risk of cancelation or renegotiation? You can discount this revenue as you plan for burn. You may need to fire bad customers, or stop extending credit."
Superhuman advice. The CEO of Superhuman, Rahul Vohra, offers his take on how founders should navigate a recession. His advice is admittedly simple, but it's a useful framework. Basically, he suggests that founders should choose a runway length (i.e. 24 months) and constantly adjust their net burn to maintain that runway length. In an environment with very uncertain fundraising options, this is a pretty useful way of looking at things because it reinforces good and tough decisions. He even provides a spreadsheet.
Finding your one true co-founder. An interview with relationship therapist Ester Perel on how to find a co-founder. "I would ask them about their past business 'exes'. What do they trail behind them and how does that influence the new partnership? It is important that they have discussed their expectations of trust, finances and partnership agreements."
PPP? No thanks. The Information on how tech CEOs are pulling away from the US government's PPP program. "Now—fearing the same backlash that larger public companies have faced for taking PPP loans or, worse, anticipating future punitive measures—founders are grappling with whether to pull applications or return loans...'There is a fear element here that has become very real in the last week,' [BPM Partner Terry ]Hill said on Friday."
Back to work. Practical advice on going back to work (reopening a physical office) from Madrona Ventures.
How to Venture
The LP view. Lindel Eakman of Foundry Group reviews what he and his portfolio of GPs are experiencing. The piece is long and thoughtful and well worth a read for any GP (or any founder trying to understand what VCs are dealing with). Here's a snippet: "How are you playing offense during this time? You can’t just hibernate during a crisis. Instead, you sharpen your focus. You divest in some/most areas, but you need to be investing in some area. The goal is to come out of this stronger than you entered in at least one critical area."
For YC, 4% is the new 7%. YC announced a major change to its investment policy, reducing its pro rata target from 7% to 4% and stepping back from its commitment to fund most pro ratas. "In the future, we will no longer invest automatically in every priced seed and Series A/B round. Instead, we will exercise pro rata rights on a case-by-case basis, like other investors on your cap table,” the accelerator wrote. “We’ve heard your feedback that YC’s pro rata allocation is bigger than what some of you would prefer. So for those investments we do make, we will reduce the size of our pro rata and simplify its calculation to be a flat 4% participation right in each priced round. To calculate the size of YC’s pro rata investment in your round, simply multiply the amount of capital you are raising by 4%. If our ownership right before the round is less than 4%, we will cap our investment in the round at our then-current ownership." My take on this is that when you run a portfolio that large, you are running an index fund - and when you run an index fund you need to weigh the macro more heavily than the micro. We are entering an era where most pro rata investments will be mistakes - and YC is smart enough to know that.
Portfolio News
Aquant has adapted its services to meet new and immediate market needs – launching a free self-service customer tool that supports the healthcare industry and helps reduce the number of in-person service visits made by field service teams.
Crux OCM has created an interactive listing of links to open job postings in the oil & gas industry to support those that have fallen upon hard times.
Vault Platform shared their on-demand webinar on how to inoculate your business against discrimination during a global pandemic.
Datos Health is the automated remote care platform Rochester Regional Health is using to monitor COVID-19 patients from home.
DUST Identity is solving authentication of physical objects by creating unique identifiers with quantum-engineered diamond nanocrystals.
Planable has released their 13th podcast episode of People of Marketing, focused on growth marketing and featuring Elijah Toh, head of growth at WorldRemit.
Portfolio Jobs
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Aquant.io
Datos Health
DUST Identity
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