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Europe/Israel Enterprise/Tech Weekly

The Angle Issue #54: For the four weeks ended May 13, 2019

Europe/Israel Enterprise/Tech Weekly

The Angle Issue #54: For the four weeks ended May 13, 2019

This has been a week when most of the (non-enterprise) tech universe was focussed on Uber’s massive IPO and whether or not the government should break up Facebook. (*I’ve been massively tied up with some exciting internal things we can’t quite announce just yet — so please forgive the infrequency of this email.)

Back in enterprise land, the most important must-read piece this week is by Elad Gil, who finally puts into coherent words (and compelling data) something that many of us in the tech/startup world have been struggling to articulate for some time now. Markets, he writes, are 10x bigger than ever before. “In general, software markets and businesses are 10X bigger than they were 10–15 years ago. This is due to the liquidity provided by the global internet. A company that would have been a $10-$20M subscale revenue business is now a $100M revenue company, which means many more companies can now be worth $1B or more, and many more SaaS businesses have the potential to be $10B+.” I’m almost certainly going to return to this theme and reflect on it in a blog post — but Elad’s summary of why we are seeing so many unicorns right now is an important part of this discussion.

Another fantastic piece is by Martin Casado of A16Z, who argues that data moats are an illusion.

Vault, in which Angular invested in last year, just announced a seed round led by our friends at Kindred.

If you are building an enterprise tech startup in Europe or Israel,
please let me know… Now let’s get to the news.

From the blog

Europe/Israel Enterprise/Tech

  • UK/Payments. Checkout, a UK-based company founded in 2012 announced a $230M “Series A” round at a $2B valuation. The round was led by Insight and DST. The company, which competes with Adyen to provide digital payments processing, has apparently never taken outside capital before and has boot-strapped its way to an impressive $50M in revenue from customers such as Samsung, Adidas, Deliveroo and Virgin. The company’s self-financed growth is impressive, but the 40x revenue multiple and the dubious definition of a “Series A” might raise some eyebrows.

  • Israel/Team Management. Monday.com is rumored to be raising $250M-$300M at a $2B valuation.

  • Israel/Security. Proofpoint acquired Meta Networks for $120M.

  • Israel/Conversational AI. Salesforce buys Bonobo for $50.

  • Germany/Logistics. FreightHub raised $30M for its logistics platform.

  • Israel/Event SaaS. Bizzabo raised $27M for event planning and management SaaS.

  • Finland/Databases. Aiven raised $10M for cloud databases.

  • UK/Israel/PoS. The UK’s JustEat bought Israeli SMB PoS vendor Practifor $8.7M.

  • France/Le boom des startups. CBInsights published a detailed look at the explosion in startup activity in France.

  • Ireland/Scandal. One of Ireland’s most successful and admired enterprise startups, Intercom, has been rocked by scandal: “But in recent years, at least a half-dozen Intercom employees have left the company over allegations that [Eoghan] McCabe, its chief executive, made unwanted advances toward female Intercom staffers, according to people who left and others briefed on their departures.”

  • UK/Brexit. New research suggests that nearly 1 in 4 UK tech businesses has experienced fundraising challenges due to Brexit, and roughly 2 in 3 have felt a negative impact in terms of attracting talent.

  • Israel at 71. A review of the Startup Nation at 71. “There are more than 6,600 startups in Israel’s small and connected economy, 14 times the concentration of startups per capita in Europe. And while Israel has just 0.1 percent of the world’s population, the nation attracts 19% of global investment in cybersecurity, ranks number one globally in R&D expenditures per GDP, and attracts the highest rate of venture capital funding per capita in the world — some $674 per capita in 2018, according to a report by Start-Up Nation Central (SNC) and PwC Israel.”

  • Israel/747s. El Al, and one teary-eyed journalist, bids farewell to the 747.

Worth reading

Enterprise/Tech News

  • Kara Swisher on tech’s new era. This is a must-read piece. No journalist seems to understand where the tech zeitgeist is headed better or earlier than Kara Swisher. “Starting with AI, there’s a line that I think pretty much encapsulates the one thing you absolutely need to know about the future of machine learning that I have used again and again: Everything that can be digitized will be digitized.”

  • Software supply chain vulnerabilities. How a group of hackers seems to be hijacking the software supply chain.

  • A map of unicorns. Visual Capitalist has this detailed infographic of the state of unicorns in 2019.

  • Docker goes enterprise. How Docker is attempting to make itself essential to the enterprise — and generate revenue along the way.

  • The cloud will contract. Why P&G’s CIO thinks a brutal cloud war is coming.

  • Auditable AI. Some US lawmakers are pushing to force algorithmic accountability.

  • Cloud AI. Microsoft moves to simplify the process of building AI modelson the Azure cloud: “Azure Machine Learning — which already boasted support for AI frameworks such as Facebook’s PyTorch, Google’s TensorFlow, and scikit-learn, in addition to automated hyperparameter tuning — now features a more intuitive automated ML interface designed to make model creation simpler, along with a drag-and-drop visual machine learning dashboard. Also new are a suite of MLOps features that tie into Azure DevOps, Microsoft’s end-to-end software development toolkit, intended to promote reproducibility, auditability, and automation in AI model design. “[There is a category of AI practitioners] who are learning machine learning concepts, they want to make their own models, but they are not coders. This could be IT professionals, or folks with background in statistics or mathematics,” said Microsoft’s director of artificial intelligence Bharat Sandhu. “For those customers, we’re offering experience[s] to make models visually.””

  • Open-source conversational AI. Cisco open-sourced MindMeld, a platform for conversational AI.

  • Google deepens its cloud-ML offering. Google adds translation, object detection and tracking, and AutoML Vision Edge to ML Kit.

  • Unity. A look at how the gaming tooling software giant is closing in on a $6B valuation.

How to Startup

  • Data moats will not protect you. Martin Casado of A16Z deflates the mythology around data as a defensive moat. “But for enterprise startups — which is where we focus — we now wonder if there’s practical evidence of data network effects at all. Moreover, we suspect that even the more straightforward data scale effect has limited value as a defensive strategy for many companies. This isn’t just an academic question: It has important implications for where founders invest their time and resources. If you’re a startup that assumes the data you’re collecting equals a durable moat, then you might underinvest in the other areas that actually do increase the defensibility of your business long term (verticalization, go-to-market dominance, post-sales account control, the winning brand, etc). In other words, treating data as a magical moat can misdirect founders from focusing on what is really needed to win. So, do data network effects exist? How might a scale effect behave differently from the traditional network effect? And once we get past the hype of having to have them… how can startups establish more durable data moats — or at least figure out where data best plays into their strategy?”

  • Sales efficiency in review. Tomasz Tunguz on the sales efficiency of recent tech IPOs. His takeaway: “If you want to build a business with world class sales efficiency develop a product that is adopted bottoms up but that grow to $100k+ ACVs in a large market.”

  • Hiring a product manager. Todd Jackson of First Round (and Google, Facebook, Twitter, and Dropbox) shares his views on how to hire product managers (video). The talk was summarized in an article as well.

  • Jeff Bezos on the keys to success. This is an oldie, but a goodie. I hadn’t seen it until it showed up this week on Product Hunt’s twitter feed. It’s five minutes of “back to basics” wisdom from one of the greatest entrepreneurs on the planet.

  • Lessons from and for SaaS Startups. Check out two data-driven talks from SaaStock. Here’s Patrick Campbell’s 27-minute keynote and Nathan Latka’s 21-minute keynote. Both are jammed with data-driven insights, a rarity in SaaS-land.

  • SaaS Benchmark Survey. Openview’s SaaS benchmark survey is open. If you fill it out, you’ll get the results before others. You can see last year’s results here.

How to Venture

Portfolio News & Jobs

Portfolio Jobs

Aquant is hiring. R&D in Israel and Sales, Marketing, and Customer Success in NY.

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 andMedium. 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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