Europe/Israel Enterprise/Tech Weekly

The Angle Issue #58: For the two weeks ended August 12, 2019

Hello from Tel Aviv where I'll be in meetings around Sarona most of the day - and working a bit out of Firebolt's offices...

It's apparently unicorn season here in Israel: Monday.com, CyberReason, and - for the B2C-inclined - Lighttricks. And judging by some conversations I've been having here - more are on the way. 

A quick diversion: The MIT Technology Review highlights two Czech researchers who are using machine learning to trace the evolution of European Art. 

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

Technology for Trust. Why we invested in Vault Platform (read about the follow-on round here)

Stop counting unicorns. How fund economics are inflating the private tech market and wrecking companies.

2015-2018 Europe & Israel Venture Data: $25.1B of 2018 VC investment summarized in 83 slides.

A Security Layer for the Physical World: Why we invested in DUST Identity
Angular's first investment: Why we invested in Aquant.io

Europe/Israel Enterprise/Tech

• Israel/Field Service. Salesforce acquired ClickSoftware for $1.35B. Clicksoftware was founded in 1997 and went public in 2000. It was taken private by Fransico Partners in 2015 for $438M.  Techcrunch reported that ClickSoftware will become part of Salesforces' "Service Cloud" division which recently crossed the $1B revenue threshold. The acquisition came within days of Saleforce closing its $15.7B acquisition of Tableau. 

• UK/Health AI. Babylon Health raised $550M for its AI-based healthcare services, valuing the company at over $2M. "The U.K.-based startup that has developed a number of AI-based health services, including a chatbot used by the U.K’.s National Health Service to help diagnose ailments, has confirmed a massive investment that it plans to use to expand its business to the U.S. and Asia, and expand its R&D to diagnose more serious, chronic conditions."

• Sweden/Payments. Klarna raised $460M of growth capital. Founded in 2005, the company has been valued at $5.5B. 

• Israel/Security. CyberReason raised $200M from Softbank.

• Israel/Productivity. Monday.com raises $150M and reports dramatic revenue growth.

• UK/Spend Management. Soldo raised $61M. "Founded by Carlo Gualandri, who previously helped create Italy’s first online bank, Soldo offers a multi-user spending account for businesses of all sizes — from SMEs to much larger enterprises — that need to deploy and manage expenses across an entire organization. It enables departmental and employee spending to be managed in real-time by combining a Soldo account, central dashboard, apps for iOS and Android and virtual wallets or physical “pre-paid” Mastercards that can be handed out to employees, departments and even external consultants or contractors."

• Netherlands/HR. Harver raised $15M for its pre-employee assessment platform. 

• UK/AI for Sales. Coginsm raises $10M for a GDPR-compliant AI platform for B2B sales teams.

• Israel/devtools. Rookout raised $8M for "code-level data extraction and pipelining." "Since exiting stealth just over a year ago, Rookout’s data collection has defined a new category of observability software that decouples data from code, making understanding and debugging code easier and faster. Rookout claims that companies using its observability software have seen the time it takes to make a single observation reduced from hours to a few seconds, minimizing the chore aspects of debugging, providing deep code insights and freeing up vital R&D resources to focus on features."

• UK/Regtech. FNA raised $5.5M for an AI-powered regtech platform.

• Israel/BI. How Pyramid Analytics is carving out an independent path among the spate of recent BI mega-mergers.

• Israel/Shlomo Kramer. An interview with Shlomo Kramer, one of Israel's most successful investors (and a founder of Check Point). "The founding team is the most important aspect of any startup, Kramer said. “Most startups end up doing something other than the idea they initially pitched,” he explained. “To be able to deal with hardships, to look reality in the eye, process it in a healthy way, and be able to do all that as a group, without falling apart, requires entrepreneurs to have a very specific personality,” he said. “It takes very high stamina, intellectual integrity, and a combination of the ego necessary to found a startup and the humility required to be able to work with other people as a team,” he said. “These are all very important characters for the success of a startup.”"

• EU/AI. Eight EU member states expect to miss their deadlines to set up national AI strategies. (I wasn't aware we needed one...)

Worth reading

Enterprise/Tech News

• Broadcom/Symantec. Broadcom acquired Symantec's enterprise business for $10.7B. "The acquisition marks Broadcom’s second big bet in software, following its $19 billion takeover of CA Technologies last year. Chief Executive Officer Hock Tan is spreading the reach of the company he built through acquisitions in the chip industry, and is now using a similar playbook to extract value from software assets that are struggling to grow."

• Healthcare transformed. A16Z on the transformation of healthcare delivery through technology (video).

• AI is harder than it looks for enterprises. A new IDC study of over 2,000 enterprises finds a series of deep challenges to successful adoption, despite lots of excitement in the boardroom. 

• The end of the Hadoop Era. HPE acquires MapR's assets and brings a quiet end to the Hadoop era. 

• Is the cloud slowing down? Amazon reported slower growth in its AWS unit, below 40% for the first time since 2015. "The gradual deceleration in revenue growth comes as AWS faces long-term shifts in how customers use the cloud. Its years-long growth has been driven by expansion of the overall market, as more companies move their computing work away from their own data centers toward servers run by public cloud services like AWS, Microsoft Azure and Google Cloud."

• Long live the spreadsheet! Looks like Excel has some runway left... "A recent study of 1.048 executives out of Deloitte finds most companies are not mature when it comes to business analytics; and 62% still rely on spreadsheets for their insights.  While 76% of survey respondents report that their analytical maturity has increased over the past year, most are still using traditional tools such as spreadsheets (62%) and business intelligence programs (58%, combined). "

How to Startup

• The End User Era: An overview of product-led growth. Openview looks at product-led growth and argues that we are entering the third era of B2B software, one defined by end-user adoption as the primary growth driver for new startups. "Despite all this talk about end users being consumers at work who want a self-serve experience, you do still need a sales team. You just don’t need them right away. In the old world of sales led growth and marketing led growth, you couldn’t get new customers without salespeople. Someone on your team had to pitch the budget-holding executive and convince them to buy. But in the End User Era, hunting for executives with budget is a losing proposition. Software buying has flipped, so your hiring should follow suit. You used to hire sales first, but now you should hire sales last."

• A taxonomy of enterprise customer types. Jonathan Lehr of Workbench on which types of potential enterprise customers to engage with - and which to avoid. "... this doesn’t mean that courting Wall Street banks is the easiest or quickest path to early customers for enterprise startups — quite the opposite is true sometimes. The scalability, security, and compliance demands from these heavily regulated and highly complex companies is enormous, but the requirements aren’t insurmountable. Best of all, if you can solve the ‘why now’ question, a pot of gold can be waiting for you."

• A guide to startup stock option grants. Thank you, Matt Cooper.

• Where to HQ? Tomasz Tunguz with a quick formula for where to put your HQ. "If you must choose a long term headquarters for your startup, call an executive recruiter who focuses in that city. Ask her about each of the key roles your company will need to hire in the next 2 to 3 years. VP Engineering, VP Product, VP Sales, VP Customer Success, VP Marketing, or VP Operations...."

How to Venture

• Close Ties in VC Don't Pay Off. New research suggests that VCs that have invested together in the past are less likely to do so in the future. It's unclear why this is or what it means - but the researchers hypothesize that this is a reflection of the market cycles. "A deep relationship may fail for market-related reasons, according to the paper. Relationships built during “hot markets,” or times when the market is generally doing well, tend to have a negative effect on co-investment behavior, the researchers found. Yet 75 percent of co-investments are made in hot markets, they said in the paper. “The analogy of this in interpersonal relationships would be that friendships forged in hard times (e.g., “wartime friends”) are stronger than those forged in easy times (e.g., “party friends”),” Du and Hellmann said in the paper."

• Closing the VC Gender Gap. Jenny Ruth Hrafnsdottir of Crowberry Capital in Iceland with five things we can do to help close the gender gap in venture. "Men need to be more receptive to different perspectives and more feminine approaches. Hofstede’s scale is internationally recognized as a tool to measure masculinity and femininity of countries and cultures. The Nordic countries score at the top in femininity, and these societies are well-off in comparison to others. Why should this not apply the same way for business?"

• No such thing as the perfect job. Some very solid career advice from VC Carmen Alfonso Rico of Samaipata.

Portfolio News

Dust Identity raised $10M to secure global supply chains with diamond dust.

Snyk added Peter McKay as CEO, alongside founder Guy Podjarny. "Over the past 18 months the company has grown significantly, moving from just 18 employees to 150 as its open-source software development approach to security has taken hold in the marketplace. McKay is someone who makes sense for the job, given he has been involved with the company as an investor since its early days, and has known Podjarny in various roles for 15 years."

Planable CEO Xenia Muntean discusses the future of marketing management. [video]

Balena raised $14.4M to simplify IoT device management. "The number of devices on Balena’s platform is growing at a rate six times year-over-year and that customer acquisition is on the upswing. Balena now counts Bosch, Booster, Allscripts, Tapp, Zume Pizza, OpenDoor, Sonder, smart home systems company Dwelo, smart roof startup Sense, HVAC monitoring and controls provider Enerbrain, and smart building controls developer Mount Kelvin among its customer base....Balena’s eponymous platform builds on Docker, Git, Yocto, and other open source technologies to solve common problems in IoT device deployment. It offers a workflow targeting embedded Linux systems with a console that lets developers push updates to thousands of devices at once, and that delivers visibility into the health of device fleets."

Siemplify was named a finalist in the first annual "Black Unicorn" cybersecurity awards.