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Europe/Israel Enterprise/Tech Weekly

The Angle Issue #71: For the two weeks ended March 3, 2020

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Angular Ventures
March 02, 2020

Europe/Israel Enterprise/Tech Weekly

The Angle Issue #71: For the two weeks ended March 3, 2020

Hello from a very sunny Tel Aviv. 

In Israel, the news is full of election results, which, given the way Israel's politics works, are still inconclusive. What looked like a huge victory for Netanyahu yesterday night, looks a lot less certain today. Time will tell. In the US, it's Super Tuesday, and a newly revitalized Joe Biden seems to have a shot at winning the Democratic nomination for the first time since the race began. That would be a great thing for startups both in the US and abroad.

Coronavirus is on everyone's mind - and in the links below you'll find a few VCs weighing in on how startups should respond to it. The virus was also top of mind at SuperVenture 2020 in Berlin last week, where GPs and LPs from around the world gathered to allocate capital and exchange thoughts. The conferences seemed to line up around two core questions / narratives: First, if there was previously some doubt that we're at an inflection point in the macro cycle and the venture cycle - that doubt has evaporated with the sharp market declines we've seen recently. Regardless of how the virus plays out, there is a growing sense that we've exited the bull market. The question is not IF but HOW this impacts VC. One theory is that early stage is much less impacted than late stage - and I think that's probably true.

A second theme to emerge was: What does the convergence of US & European VC eco-systems actually mean? One theory is that now non-US / ("European") companies can scale locally without US VC help and achieve large outcomes. That is, convergence means Europe has matured and doesn't need US help. An alternative theory is that US VCs are moving headlong into seeking out and accessing European-born companies just as they have done with Israeli, Chinese, and Indian companies already. I think it's fair to say that for early-stage funds operating in non-US geographies, these are going to be interesting and high-potential years (even in the face of macro headwinds). The real debate is what these means for late-stage non-US VCs who will need to compete ever more fiercely with their US/global rivals for access to the best opportunities. My take is that experience, expertise, and networks are far scarcer than capital, and - by definition - outlier returns are not democratically distributed. I'd bet on European/Israeli founders any day of the week, but when it comes to late-stage backers, I'd put my money on the most experienced and connected investors...most of which are in the US and most of which have taken off the geographic blinders.

When I set out to raise Angular Ventures, I talked about "post-geographic VC." Most European/Israeli based managers still talk in geographic terms. Most great US VCs have actually leapfrogged the non-US players in terms of taking a truly global approach. Post-geographic VC is here. Game on!

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

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/ Tech Multinationals. Over 100 multinational tech companies have a presence in Tel Aviv. 

  • Israel/Spend Management. TripActions raised a $500M debt facility. "TripActions intends to use the financing to launch an end-to-end global payment management system for corporate travel. According to [CEO Ariel] Cohen, travel financing is one of the most complex issues faced by corporations."

  • UK/AI Chips. Graphcore extends its fundraising adding $150 million for its processors specifically for artificial intelligence applications.

  • UK/AI Insurance. Tractable raised $25M for its AI engine for image-based claims adjustment. 

  • Israel/Wordpress. Elementor raised $15M and Strattic raised $6.5M to make it easier to design and deploy Wordpress sites.

  • Germany/Employee Travel Expenses. Lanes and Planes raised $10M for a business travel booking and expense management technology to small to medium-sized businesses.

  • Germany/Synthetic Data. Mostly AI raised $5M data privacy startup that has built a synthetic data platform that surfaces personal data for privacy-friendly AI and big data innovation.

  • Germany/Deskless workers. Cioplenu raised $5M for its “operating system” for the production floor.

  • Israel/Zero Trust Network. ZeroNetworks and announced it has raised $4.7M for of zero-trust network access solutions.

  • France/Customer Help. Stonly raised $3.5M for its software which allows companies to easily create interactive step-by-step guides and put them exactly where your customers need help the most.

  • UK/Innovation economy. Rani Saad offers a detailed analysis of the UK's innovation machine and whether or not it can drive higher levels of entrepreneurial commercial activity than it historically has.

  • Italy/Coronavirus. The NYT looks at how Milan is coping with the outbreak.

  • Israel/Coronavirus. Israeli firms announced both a new diagnosis kit and a vaccine in the works.

  • Holy See/AI. The Pope takes on AI. "Pope Francis backed a document that outlines how artificial intelligence, including facial recognition technology, should be regulated. This so-called “Rome Call for AI Ethics” carries the endorsement of the Vatican as well as Microsoft and IBM."

Worth reading

Enterprise/Tech News

  • Devops trends in 2020. Astasia Myers of Redpoint highlights three devops trends that are hot right now. (1) the need for a next generation of IT project management tools, (2) the need for new solutions for alerting that make use of AI/ML to consolidate alerts, and (3) security as code (looking at you, Snyk!)

  • Headless is here. Kaya Ismail on why headless CMS will reshape the customer experience.  "The headless CMS ... gives organizations the freedom to develop innovative digital experiences and will enable a wide range of use cases into the future."

  • Cutting IT spend. Perhaps its a sign of the times? CIO Dive ran a piece on ten ways CIOs can reduce their IT spend.

  • Revaluing data. New research from the University of Cambridge suggests new models for valuing data. The report "outlines a variety of data types and uses. Some may be more useful in aggregate, others for individual purposes. For example, a patient’s medical records may be most valuable when they are combined with everyone else’s, while web-browsing history has value when it is used individually to bombard a person with advertisements. Timeliness also matters: phone-location records flowing in real-time for a car GPS-navigation system are useful for ten minutes, while today’s retail-sales transactions help forecast next year’s demand."

How to Startup

  • The ultimate guide to raising a Series A from YC. It's detailed and fantastic.

  • Starting up in the time of coronavirus. Nabeel Hyatt of Spark offers some advice to founders. Bilal Zuberi of Lux highlight the dangers to companies that rely on conferences and travel. Tomaz Tunguz of Redpoint takes a look at the impact of the market contraction on SW multiples. Micah Rosenbloom of Founders Collective focuses on building resilience into a startup to deal with potential disruption. Elad Gil offers a full set of guidance for founders.

  • Saas Metrics for your Series A/B/C. Jon Ma breaks it all down. Well worth a look, and far too much to summarize here.

  • Immigration to the US in the time of Trump. Advice on US relocation from Angular Ventures advisory partner Jen Schear, founder of Schear Immigration. "According to statistics published by United States Citizenship and Immigration Services (USCIS), the rate of requests for evidence (RFE) and petition denials reached unprecedented highs for H-1B and L-1 petitions during the first three quarters of FY 2019 alone. These stats are hard to digest when your CEO needed to get to the US yesterday. Nevertheless, the majority of well-funded startups are able to transfer their head honchos to the US with careful planning and strategizing."

How to Venture

  • Sarah Tavel of Benchmark. I really enjoyed this podcast discussion between Jason Calacanis and Sarah Tavel of Benchmark. It's a great insight into how the best in the business actually think about the business of venture.

  • The amazing disappearing ownership stake. Semil Shah addresses the challenge of dilution for early-stage funds. "The big disconnect here occurs because for many early stage investors, there is no “price per share” or PPS of a company or investment. So many early-stage investments happen to be done on convertible notes or SAFEs, which only “cap” the valuation — there are no priced shares, per se, at this time. Those notes convert during an equity round, usually the Series A, but often newer managers don’t have information rates, back office administrators, or audit requirements that would give them a chance to know their PPS for each investment."

  • CVC Cooling Off. Brett Bivens analyzes the economics of corporate VC and shows that 2019 saw a bit of a cool down in the overheated category. The best reason to avoid CVC is captured, perhaps unintentially, by the concluding paragraph: "In corporate venturing — like in company building — simply deploying more capital is never the core driver of sustainable success. Incumbents unable to grasp this will inevitably fail to build the crucial combination of strategic insight, cultural commitment and market reputation required to avoid irrelevance and build a strong platform for future growth."

  • Accel's newest London partner. A profile of Luca Bocchio.

Portfolio News

We have a funny portfolio. Check out the new launch videos from Valohai and Aquant.

Trellis was featured in the Financial Times' article on winemakers tackling climate change and labor shortages with tech.
 
Aquant is a prime example of a deep tech Israeli startup with customers including blue chip companies like Johnson & Johnson and Home Depot.
 
JFrog launches world's first hybrid, end-to-end, universal DevOps platform.

Datos Health is being used to remotely monitor the 11 Israeli citizens who are under coronavirus quarantine at Sheba Medical Center.

DUST Identity is fighting 2020 election hacking.by authenticating and tracking the hardware used to record and count votes.

Portfolio Jobs

Apply to all Angular Ventures portfolio companies with one short application.

Aquant.io

DUST Identity

Planable

Valohai

Vault Platform

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