Europe/Israel Enterprise/Tech Weekly

The Angle Issue #46: December 24, 2018

Merry Christmas to those of you celebrating tonight.

Maybe - in the spirit of the holiday season - we can be forgiven for glossing over the political crises unfolding simultaneously in the United States, the UK, France, and Israel. Maybe we can even be forgiven for ignoring the ominous signals coming from the stock market, and tech stocks in particular. I suspect we'll all start focussing on these challenges in the new year. (If you want to get an early start on 2019, here's a link to Sequoia Capital's famous RIP Good Times slide deck from 2008. If you are too young to have seen this before - definitely take a look.)

Enjoy the holidays and the last few days of 2018. Let's hope that, by this time next year, we are all a bit more confident that the worst is behind us. 

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If you are building an enterprise tech startup in Europe or Israel, please let me know... 

From the blog

A Security Layer for the Physical World: Why we invested in DUST Identity

Angular's first investment: Why we invested in Aquant.io

1Q18 & 2Q18 EU+IL VC Data.
$12.7B of VC investment summarized in 70 slides. 

Europe/Israel Enterprise/Tech

• Coming to America. A data-driven reminder to European and Israeli founders that Americans remain much friendlier to immigration than the rantings of our obviously unfit President might suggest. "Americans seem to be growing friendlier to foreigners. This year Gallup reported that a record 75% of them think that immigration is good for the country, up from 66% in 2012."

• UK/Semiconductors. Graphcore raised $200M for its IPU (intelligence processing unit).

• France/Data Science. Dataiku raised $101M for its data science SaaS toolset for the enterprise. The company which was born in France but is now HQed in NYC has been working on the problem of democratizing data science since 2013 and has a series of tier-1 customers including General Electric, Sephora, Unilever, KUKA, FOX and BNP Paribas.

• Israel/Security. Avanan raised $25M to secure SaaS-based email and collaboration.

• UK/Data Security. Egress raised $40M for data security.

• UK/AR. Blippar crashes to earth after raising $130M. 

• Sweden/Startup Law. Erik Beyrenius of Nordic Makers released a template for what he calls WISE (Warrants for Investment in Startup Equity), a version of a SAFE Note adapted to Swedish law. 

• Lithuania/Google Payment. "Google Payment, a company owned by Alphabet Inc., obtained an e-money license in Lithuania, joining a growing number of fintech firms that have secured permission from the Baltic nation to offer financial services across the European Union. The license will enable Google to process payments, issue e-money, and handle electronic money wallets. The license, granted by the Lithuanian central bank, gives it permission to operate throughout the EU."

• Germany/Israel/Transportation. It's not exactly "enterprise tech," but German automaker Volkswagen has reportedly written-off the majority of its investment in Israeli-born taxi-hailing app Gett. "The decision was a result of Gett’s inability to gain market traction in the face of rivals Uber, Didi Chuxing, and Lyft, Der Spiegel reported."

• Ireland/Tech Housing. Dublin's housing crisis threatens to slow down the very tech boom that helped fuel it. 

• UK/Israel/Drone Security. It's still unclear what exactly happened at Gatwick last week, but flights were disrupted for 36 hours following a possible drone incursion into the airport's airspace. The Israeli press is reporting that the British Army deployed a drone detection system developed by Israeli defense firm Rafael.

Worth reading

 Enterprise/Tech News

• 2019 according to Tunguz. There are a lot of 2019 prediction posts out there, but this one by Tomas Tunguz is among the best. 

• Privileged Sales. I missed this earlier, but Carl Fritjofsson of Creandum wrote a brutally honest post about what it means to be a VC. 

• The future of devops. JFrog looks ahead to devops in 2019, highlighting AI, low-code, and data-ops as three areas of focus. Joe Ruscio of Heavybit offers his predictions for the space in this piece.

• The Yoda of Silicon Valley. A profile of Donald Knuth, a Stanford Professor, author of "The Art of Computer Programming," and renowned algorithmist. “I am worried that algorithms are getting too prominent in the world,” [said Dr. Knuth]. “It started out that computer scientists were worried nobody was listening to us. Now I’m worried that too many people are listening.”

• The war-torn web. A damning look by Foreign Policy at the increasingly fragmented internet and the role governments are playing in driving that disturbing trend. Far too much to summarize with a short quote - so you'll have to just read it. 

• "Designed by Apple in California. Assembled in China." The New York Times takes a look at the history of Apple's manufacturing, including its experiment with manufacturing in the US in the 1980s. "“When I started my career, all my flights were to Japan,” said Tony Fadell, one of the hardware designers of the iPod and iPhone at Apple. “Then all my flights went Korea, then Taiwan, then China.” Today, Silicon Valley has retained a relatively small manufacturing workforce, as electronics manufacturing has exploded globally, creating millions of jobs. The small amount of manufacturing still done in the Valley is largely done by specialized contract firms that focus on fast-turnaround prototype systems. The challenge today is that an enormous manufacturing ecosystem is required to make products for mass markets, and that ecosystem has largely moved to mainland China, where some 450,000 people have worked at a single iPhone plant."

• An Epic Culture. The New York Times again, this time with a tear-down of Epic Systems' headquarters campus in Wisconsin. Epic, one of the largest tech companies in the US, is also one of the least well understood, so the Times starts by looking at the facility itself and the culture it embodies. "I cover Wall Street, not health care or technology, and when I came across the privately held Epic this year I was consumed with questions. Who was this publicity-shy yet spectacle-loving C.E.O., and how did her theme-park sensibility coexist with the mundanity of health care billing protocols? Was Epic’s odd culture a magnet for talent and clients, or was it an indulgence that kept the company from growing even bigger? In August, I traveled to Wisconsin to see what this 1,100-acre Midwestern behemoth might be hiding."

• A look back at Bitcoin's year. In this fairly damning piece, Daniel Cooper of Engaget looks at crypto's annus horribilis: "Bitcoin, for all of its sophistication, was so poorly engineered that the more popular it grew, the less usable it became. This was true as far back as 2016, when block sizes were artificially kept small, apparently to appease Chinese miners. Refusing to deal with the issue caused a chronic slowdown in validation speed that made it ever more useless as a functional currency. One solution was to create a splinter version (called a hard fork) of Bitcoin that removed this technical limit apparently favored by vested interests. Rather than one Bitcoin-branded currency, you had two: Bitcoin and Bitcoin Cash. Sadly, much like the running joke about the liberation groups in Monty Python's Life of Brian, communities without a strong center are prone to factionalism." His conclusion is stark: "Bitcoin was never more than a vehicle for tax evaders and grifters to burn carbon in the hope of scoring a hot new Lambo. It represents all of our worst excesses, and it does so at a huge cost both to the people and our planet." For a counterpoint, here's Ouriel Ohayon on building through the crypto-winter. For synthesis, here's Jessica Lessin.

• Morgan Stanley. How the big bank is working to streamline tech onboarding. "Earlier in 2018, the company turned its 20-page vendor agreement into a single page, shortening the time it takes to work with vendors from three months to a week, said Shawn Melamed, head of technology business development and innovation, in an interview with Reuters. A portal for employees to start using new tech and more opportunities for executives to test new tech is also facilitating collaboration."

How to Startup

• An interview with Jason Green of Emergence. An interview with Jason Green, founder of Emergence Capital, and one of the leading enterprise SaaS investors in the world. He highlights the five traits of "growth leaders" he looks for in founders. 

• SaaS multiple compression. Sammy Abdullah of Blossom Street Ventures has this awesome analysis of SaaS multiples in the current market. "[Since 4Q14,] the median SaaS multiple has ranged from 4.43x to 9.32x with an average of 6.69x. Today, we’re at the middle of that range."

• SaaS trends for 2019. Openview compiles seven observations and predictions about where SaaS is headed in 2019. 

How to Venture

• Venture Capital Blindspots. 645 Ventures on why VCs miss billion-dollar companies. Now all I need is a time machine.

• Young people, old industry. Hunter Walk on how generational change is fueling his investment thesis: "Privately-owned businesses that were in the hands of a family patriarch are now being passed down to the next generation. This group of 30-50’something men and women have smartphones in their pockets and are more eager to adopt technology than the previous owners. You don’t need to educate the market on why SaaS, sensors, machine learning and so on are good investments. Or why a spreadsheet might not be the most dynamic dashboard available to them in 2018."

• The state of fund terms. Different Funds release a survey of 2018 venture fund terms.

Portfolio News & Jobs

Devops predictions from JFrog.

Front's Mathilde Collin on discipline.

- - - Portfolio Jobs - - -

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

Vault is hiring a front-end developer in London.