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Resilience in a difficult year
By Anonymous
For our Israeli founders, who marked Rosh Hashanah and Yom Kippur recently, this has been one of the more challenging years they, their families, and their country has faced in some time. This week, we wanted to share - anonymously - the email that one of our Israeli CEOs shared with his full team as the Yom Kippur holiday approached.
I am writing to you this evening as [myself], not as the CEO of the company. I wanted to share a few personal words from me.
Exactly one year ago, we all woke up to a morning that changed our lives. Over the past year, each of us, in my opinion, has experienced one of the most challenging years of our lives. From the early months of the war through the tough routine to the recent days that reminded us that the road to peace is still long.
We all work in “hi-tech,” a place that allows a certain level of escapism. And yet, I was fortunate to see each person choosing their unique and suitable way to cope, to be present, and, above all, to keep going.
During the reserve duty in which I took part, this was one of the most meaningful things I had the privilege to witness among the unit members, friends at home, family in the north, and even within our small company.
And with this feeling, I continued throughout the year. To keep moving forward despite the hardships, the moments of breakdown that each of us experienced, the loss, the uncertainty, and all the additional challenges.
It is present every morning that begins with a decision to volunteer, to help protect the families, to come to work, and also to laugh, to be happy, and to do silly things. Anytime and anywhere in the world.
I have no doubt that we will defeat our enemies. But in my view, this is the true way to overcome and get through this period: Just keep moving forward.
I wanted to personally say once again to each of you a big thank you for choosing to keep moving forward with us. For anything I can help with, advise, listen, or anything else – I’m here for you.
May we know peaceful days
And continue moving forward.
Amen.
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EUROPE AND ISRAEL FUNDING NEWS
UK / TechBio. Basecamp Research raised $60M, led by Singular, for its foundation model for biology.
Italy / AgTech. xFarm Technologies raised €36M, led by Mouro Capital, to expand its farm management platform to LATAM, India, Turkey and the US.
Netherlands / ClimteTech. Paebbl raised €22.8M, led by Capnamic, to build its first commercial scale plant for the plant of its CO2-storing mineral.
UK / SaaS. Lightdash raised $11M, led by Accel, for its open source alternative to Looker.
Sweden / ClimateTech. AirForestry raised €10.3M, led by Northzone, for its drone-based tree harvesting technology.
Germany / ClimateTech. forward earth raised €4.5M, led by Mosaic Ventures, to build its vision for embedding environmental management tools in existing business software.
Sweden / SaaS. Quartr raised €5.4M, led by Altos Ventures, for its qualitative public market research platform for finance professionals.
Italy / SpaceTech. Aiko raised €3.5M, led by Deep Blue Ventures and Primo Ventures, to fund the global expansion of its AI-powered space software platform, including a predictive maintenance tool and an onboard operating system that enables autonomous spacecraft operations.
WORTH READING
ENTERPRISE/TECH NEWS
One giant catch for mankind. “The biggest and most powerful rocket ever built took to the skies again. And this time, it came back.” Following the launch of the fifth test flight of the Starship rocket on Sunday, SpaceX achieved a major accomplishment when it successfully “caught” the returning booster with the "chopstick" arms of the launch tower in an unprecedented maneuver. Elon Musk’s video shows the monumental engineering feet (which has now been watched over 118 million times in 24 hours). By catching the first stage after it separates from the Starship, SpaceX aims to make it reusable for other flights. “SpaceX is developing Starship to help humanity settle the moon and Mars, among other exploration feats. The vehicle is designed to be fully and rapidly reusable (as evidenced by the Super Heavy launch-mount landing plan, which will slash the time needed between flights). This characteristic, combined with Starship's unprecedented power, could revolutionize spaceflight, according to the company and Musk.”
OpenAI’s bear case. Following OpenAI’s $6.6B+ raise at a $157B valuation, some, like Eric Newcomer, believe that there’s a bear case to be made of the company’s outlook. Newcomer opines that “while OpenAI's revenue might be growing faster than Google and Facebook in the early days, it's losing money while they turned substantial profits much earlier. OpenAI is spending about $6 billion to run its GPUs and power its training and inference runs. If all that money were going to build an impenetrable technological moat for OpenAI, then the spending might be forgiven, or even celebrated. But the reality is that OpenAI hasn’t been able to keep much of a technological edge over its competitors.” Not only is spending incredibly high, it’s expected to increase. Next year, OpenAI is projected to have losses as high as $16B. OpenAI isn’t projecting to turn a profit until 2029, when its revenue would hit $100B. Not only does OpenAI need to contend with massive expenses, but, after the failed Sam Altman coup, almost the entire founding team has departed — and several have started or joined competing companies. Most notably Ilya Sutskever’s new company, Safe Superintelligence. Additionally, former CTO Mira Murati who recently left OpenAI is allegedly trying to poach employees to join her next venture. “Researchers may be susceptible to her pitch. OpenAI’s research organization is in upheaval after the promotion of Liam Fedus to lead post-training”.
Enterprise SaaS M&A. While the IPO market is still fairly muted, corporate M&A is on the rise in the enterprise SaaS sector, especially when it comes to VC-backed companies. In the first half of 2024, 62% of enterprise SaaS deals involved VC-backed companies, above the historical average of 38%, according to Pitchbook’s latest Enterprise SaaS M&A report.
HOW TO STARTUP
Five founder lessons. Gil shared his five hardest-to-land lessons for founders on Twitter – simple but powerful principles that every startup founder should keep in mind: “1. Raise less. 2. Cut deeper and faster than you think you need to. 3. Smaller teams can outperform bigger teams. 4. Never ever take venture debt. 5. (For B2B) Don't be afraid to raise your minimum price & fire customers.”
European startup funding decline. According to Crunchbase data, funding for European startups took a sharp drop in Q3, with investments down 39% year-over-year, and late-stage funding being hit the hardest, down 57% year-over-year. Of the three largest countries for startup funding in Europe, the UK, Germany and France, “Germany was the only one to show a quarter-over-quarter and year-over-year increase.”
HOW TO VENTURE
VC deal activity. According to the latest PitchBook-NVCA Venture Monitor report, a dearth of exits is restricting new deal activity. Distributions to LPs are at their lowest since the Great Financial Crisis. Due to the lack of liquidity, LPs aren’t backing new VC funds. As a result, VCs are investing less, with Q3 2024 seeing $37.5B invested across 2,794 deals— a 34% drop from last quarter. The number of active investors has also fallen over 25% year-over-year, and fundraising is on track to be less than half of what it was in 2021 or 2022.
Ten things. Sam Lessin shared the ten things that matter right now in seed VC. The entire list is worth reading, but point three is especially important: “Capital efficiency and financial optionality: factory model is dead… and people have watched and learned tough lessons on dilution mill – smart kids focus on capital efficiency and optionality vs. conveyor belt.”
PORTFOLIO NEWS
Levity launched Control Tower, a business intelligence solution providing logistics companies comprehensive visibility into their email operations.
Reco CEO Ofer Klein shared a piece in Forbes on how most companies underestimate their SaaS exposure — and how not to be one of them.
CruxOCM CEO Vicky Knott discussed navigating the complex terrain of global decarbonisation.
PORTFOLIO JOBS
CruxOCM
Engineering Manager (Remote)
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