The personal touch.

Today, Coinbase is going public in the US at something like a $65B valuation and is expected to trade up from there. It’s one of the most hotly anticipated IPOs in memory and a significant validation of the crypto market. While we continue to scratch our heads looking for legitimate and significant enterprise applications of the technology, the consumer appeal of the crypto asset class can no longer be disputed, and is showing no sign of slowing down.

Why am I writing about a late-stage consumer crypto IPO in an early-stage enterprise tech newsletter?

Good question. At Angular, we are lucky to have Phil Wickham — founder of Sozo Ventures — as a venture partner and advisor. He’s been a believer in what we’re building here since day one, since before it had a name. Phil has been a friend and mentor to me for over a decade. I met him in Israel in 2007 when he recruited me to the Kauffman Fellows Program, which he was running at the time as their CEO. The next time I saw him was in Palo Alto, as he welcomed Kauffman Class 13 (he was Class 1) and guided us through the MBTI framework. There I was first exposed to a big part of his philosophy and approach — that venture capital (or any other high-performance activity) is really all about getting to know people and — most of all — getting to know yourself and how you work internally so that you can show up as your best self when interacting with, working with, and learning from others. All the excels and slides and lines of code in the world would not save me — it was the “soft stuff” that really underpinned the best performing venture investors in the world.

Enter Sozo.

At some point, Phil stepped back from running Kauffman day to day and started setting up a VC firm called Sozo, which is focused on helping the best American tech companies expand into Asia, starting with the Japanese market, which Phil has navigated for decades. At first, I thought the idea for Sozo was perhaps even crazier than the idea for Angular. I was wrong. Sozo has gone on to back Twitter, Zoom, Flexport, Square, Palantir, Fastly, MongoDB, Grammarly, ServiceMax, Chainalysis, Chorus, and — yes, among others — Coinbase.

This week, Phil’s co-founder at Sozo, Koichiro (“Ko”) Nakamura, was named to the Midas List. This is an amazing achievement and a testament to what Sozo has built. Years ago, however, Phil and Ko tried to help me raise Angular I when absolutely no one was interested in backing this fund. Ko — who barely knew me — went out his way introducing me to Japanese LPs and trying to help me navigate that world. Nothing came of it — but the investment of time and energy that Ko was willing to make spoke volumes about him, his value system, and the culture that Phil and Ko have built at Sozo.

Being present.

Yesterday, Phil spent 90 minutes with me on a zoom call — helping me think through and navigate some interesting and wonderful challenges I am facing with Angular. He was fully present in that conversation, and it was incredibly valuable to me. This is on the eve of the biggest IPO in his career — one of the biggest IPOs in history — and Phil found the time and the presence of mind to show up on a call with a guy running a tiny little fund and give 100% of himself. He never considered rescheduling the call. He barely mentioned Coinbase — an outcome that dwarfs anything Angular has ever touched. A few hours later, my phone rang. It was Phil. “I was thinking about our call,” he said. And then he went on to shed even more light on how I can be an even better version of myself.

A few years ago, I was lucky enough to go to the Kauffman conference in Kansas City, as Phil was exiting the CEO role and gearing up with Sozo. There was a dinner organized in Phil’s honor, and person after person, VC after VC, got up and shared their gratitude and appreciation for how Phil has touched them. It was incredibly moving and inspiring. I was too junior and insignificant to be one of the speakers — but I would have said the same. Without Phil’s help in finding my path, I would be only a fraction of the person I am today. The key thing is — this event took place before Sozo had achieved any venture success of note. Today, Sozo has become — demonstrably — one of the best funds on the planet — but that, I dare say, for Phil is secondary. The primary thing for him — as it should be for all of us — is to be a good human being. To give to others, to serve friends and partners and colleagues. The universe is karma and energy more than it is dollars and percentages. Phil’s journey with Sozo is inspiring on every level.

Phil — thank you for everything you have done for me. I quite literally can not thank you enough — and I know I am one of hundreds who feel the same.

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.

Angular Insights: Talks for Enterprise Founders

Angular is hosting a series of online interactive events with our community of early-stage enterprise tech founders from across Europe and Israel. These talks are designed to deliver practical startup advice in an easy-to-consumer format — with plenty of opportunities to engage with our speakers. Typically, these take place on Wednesday at 3pm UK, 4pm CET, 5pm Israel. To register for any of the sessions, just click on the links below.

• May 26: A Talk with Dror Davidoff, Co-Founder & CEO of Aqua Security

• June 2: A Talk with Dana Oshiro, General Partner at Heavybit

• June 9: A Talk with Leigh Moore, VP of Marketing at Snyk

• June 23: Lemonade — Building an Engineering Organization from Startup to IPO with Erez Dickman, Vice President of R&D at Lemonade

• June 30: Building Developer Products and Communities with Amir Shevat, Co-Founder & CPO of Reshuffle

• July 21: A Talk with Lenny Pruss, General Partner at Amplify Partners

Check out: www.angularventures.com/events for additional upcoming events.

From the blog

The great acceleration of seed investing. The best seed funds are really accelerators.
Why we invested in Levity.ai: A no-code ML-powered workflow on every desktop
Why we invested in Firebolt: Next-gen cloud-native data warehouses (& Eldad Farkash)
Why we invested in Candu: Democratizing Front-End Development
US Immigration: Updates in US Immigration Impacting Founders
Going to America: Lessons on moving to the US from Israeli startups
JFrog Investment memo: What JFrog looked like in April 2012
Milestones, gratitude, and the challenges ahead: Reflections on an IPO and the ones that got away
League Tables: The most active US VCs in European & Israeli Enterprise Tech
The Data: Enterprise & Deep Tech VC in Europe & Israel
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.

Europe/Israel Enterprise/Tech

• Israel/Retail Computer Vision. Trax raised $640M for their suite of computer vision-based systems transforming retail spaces including autonomous shelf monitoring solutions to help retailers keep products on shelves.

• Israel/Low latency Database. Redis Labs raised $110M for their database platform that helps to solve for low-latency requirements of business-critical applications and the go-to-market strategy to succeed alongside the cloud hyperscalers.

• Israel/Security. WhiteSource raised $75M for its open source security and license compliance management platform.

• UK/Open Banking Payments. TrueLayer raised $70M for its open banking payments platform.

• Germany/No Code Automation. BRYTER raised $66M for its AI-based no-code platform helping enterprise automate applications and workflows.

• Israel/Tax. Blue Dot raised $32M for its All-in-one Tax Compliance Platform that aims to cover the entire tax report and returns for different countries.

• Ireland/No Code Automation. Tines raised $26M for their no-code security automation platform.

• Israel/Remote Working Security. Talon Cyber raised $26M for their cybersecurity solution for distributed workforces which makes organizations safe by enabling all employees, no matter the device they are using or their location, to access their corporate resources securely, without compromising on privacy or productivity.

• Israel/No Code Big Data Analytics. Upsolver raised $25M for its no-code start-up that enables analytics on cloud data lakes.

• Germany/OS Dev Environment. Gitpot raised $13M for its open-source platform that helps automate everything a developer needs in order to start coding.

• Spain/SME Finance OS. Abacum raised $7M for its real-time and collaboration finance tools for SMEs.

Worth reading

Enterprise/Tech News

• Saving Box. KKR invests $500M in Box. A good reminder that life as a public company (or a highly valued one in general) is not always a bed of roses.

• Observability is the new monitoring. Monitoring tools are evolving to keep pace with new software architectures. The most radical approach to this we saw was Aspecto. Check it out. Here is more from Protocol: “Maybe 10 years ago, the way things would work is developers would write the application and then hand it off to an IT pro, who would probably deploy it onto a server in a data center,” Staples said. “Meanwhile, they hope that the system keeps up and running and the IT pro will tell them if something breaks — otherwise, they just go on to the next feature.” A decade later, that approach will not fly. Companies no longer separate software development from operations: a shift known as DevOps, which calls for closer cooperation between the teams and forces developers to be more aware of the impact of their changes. One of the big risks of making changes to a monolithic application was the chance that you could cause a difficult-to-detect problem in a completely unrelated part of the app. Microservices changed that, allowing developers to break their applications down into lots of smaller pieces that can be operated and tweaked separately. At the same time, cloud adoptees started moving toward deploying their applications in containers, which meant they could be deployed across a wide range of servers.

• Independence in the Cloud. Target CIO Mike McNamara on breaking free of AWS. “We did adopt an enterprise microservices strategy. So we started to decompose our own applications into microservices. We built an API layer between all the legacy stuff and the new stuff that we’re building. Part of that whole journey was around infrastructure as well. The way I describe it is to abstract the infrastructure away from application developers. So instead of an application developer worrying about how many cores they need, how much memory they need, how much heap space they need, anything like that, I wanted them to focus on writing features and functions. Because at the end of the day, it’s features and functions that actually make money for Target, either by improving our sales or by improving the productivity of our operations.”

• The decline of Heroku. “Even Heroku’s founders recognize that the revolutionary web development platform has run out of steam. How did Heroku lose its magic, and could a new, modern Heroku revive the PaaS?”

• Tech in India. A look at the role of tech in the “unspooling” of India’s democratic norms.

How to Startup

• Covid and software sales efficiency. Tomasz Tunguz analyzes the impact of the last year on sales efficiency. Some companies saw a decrease followed by an increase, but most saw little effect. What effect did it have on you? “This steadfastness in the metrics is all the more remarkable for its lack of turbulence. By and large, software companies transitioned to virtual sales seamlessly. Call it a testament to the resiliency of go-to-market teams and their virtual pair-partners, the buyers. The data does imply lengthening sales cycles, lower conversion rates, increased online spending, or other leaks in the funnel offset declines in travel and field marketing expense. Virtual selling does have its tradeoffs, but the heartening conclusion is that irrespective of the sales vector, software companies close customers with constant cost-effectiveness.”

• Leave gracefully. Matias Pastor of The Family on how to leave a startup. Gracefully. “If what you’re quitting is a pre-product market fit startup, you’re leaving your ex-colleagues with the incredibly difficult task of building something people want. You surely contributed to whatever has been built until now, but don’t be greedy; realize that the hardest is yet ahead of them. So leave gracefully.”

• Struggles. The trial by fire that Vlad Magdalin endured to get Webflow off the ground. Respect.

• More on Usage Based Pricing. Openview ventures has already written the book on this massive trend, but now they are back with more great content on the theme. “Even if customers are asking for usage-based pricing, some companies just don’t have a great usage metric they can use for their pricing….Consider an online survey tool, for example. Should their usage metric be # of surveys, or does that force the customer to make a purchase decision each time someone on their team wants to deploy a new survey? Should it be # of survey responses, even though the value of a response might be very different if the respondents are B2B customers vs. free users vs. your own employees? One way to solve for this is to mix subscription packages with usage-based pricing, similar to Zapier (screenshot below) or Cypress. The subscription packages help monetize the value of the product capabilities for different audiences. Meanwhile, the usage fee helps monetize customers as they grow their product adoption over time.”

How to Venture

• Playing Different Games. There is only one thing to read in VC land this week. It’s this post by Everett Randle at Founders Fund on the “Tiger Phenomenon” and what it really means for VC. I am not going to comment on it — yet — save to say that I completely agree with it and I think it’s the most intelligent and coherent answer I have yet come across to the questions I tried to raise in this thread on VC panic. The panic I’m describing is real — and it’s a response from the “JC Penney” funds to what the Tiger Globals are doing. I can also say that two VCs I know told me that the Randle piece is going to be the entire agenda for their weekly partners’ meeting. He nailed it. Nothing else matters.

• VC vs. SPAC. Par-Jorgen Parson of Northzone tells Bloomberg what he thinks of SPACs. I am delighted to report that even yours truly was invited to be on the board of a SPAC last week. That means we’re near the top, folks.

Portfolio News

Datos Health and its remote patient management application is a key part of Sheba’s new ‘breakthrough’ deal to give diabetic care in UAE.

Crux OCM’s CEO, Vicki Knott, discusses automation in the control room, making assets more efficient and the role automation plays in reaching global climate targets on the Global Energy Show.

Aspecto’s CTO, Michael Haberman, will be giving a talk at Conf42’s Cloud Native 2021 event on April 29 on hundreds of microservices without breaking your APIs.