Towards a post-pandemic world.

A new normal? Over the past week, I’ve spent perhaps more time than I should thinking about the post-pandemic world we might (please, God) be entering soon. With vaccine rollouts accelerating in the US, UK, and Israel it’s only natural to think about what comes next. The commonly held wisdom that the pandemic has mostly accelerated a series of trends that were happening anyway appears to be largely true — and the “return to normal” will hopefully be mostly a return to the best parts of being a human and less of a return to some of the less relevant structures our societies put in place over the recent decades.

The old normal? When the pandemic finally recedes, I think human contact — old-school face-to-face meetings — will remain important in many areas of life and business. I will still want to fly to meet companies in their offices to forge strong working relationships in a face-to-face way. I think, however, that the era of first meetings by zoom is likely to remain. The truth, however, is that European VC was operating this way for a decade before the pandemic started. No European VC with a mandate to cover the continent was flying around from city to city chasing the next deal. This is impossible now, but it was inefficient back then and thus people didn’t do it. Zoom (Skype?) was the preferred way of working in most cases — the best and most efficient way to triage which opportunities were significant enough to merit a flight a day (or two or seven) of devoted time to figure out if real value could be created through a partnership between a founder and a funder.

Shotgun weddings. We live today in an era of shotgun weddings between founders and funders. I (rather stupidly) complained this week on Twitter about the effective 200x multiples that seed stage starts are getting, particularly coming out of YC. The stupid part of my tweet is the suggestion (which is of course completely wrong) that anyone is ever trying to value a startup based on a “multiple” of revenue at these early stages. That is, of course, never the case. But what I meant to say is that we are seeing these 200x multiples up and down the stack from pre-seed to growth. A 200x multiple (any any stage) suggests that risk is just not being fully priced — and this top-of-market phenomenon appears to have seeped all the way down into the seed stage — where deals are getting done on minimal diligence, minimal interaction, and zero pricing of risk.

Zoom. What does this have to do with the pandemic? I think zoom contributes to this sense of lack of reality and superficiality. It can be much harder to develop insights into the heart of a company’s opportunity and into the souls of a founding team when interactions are limited to a few zoom calls — often very rushed and jammed in between dozens more. When an entire eco-system lacks the cues and signals that suggest the reality of a company — could it be that the reality of risk — the possibility of human failings and misjudgment — gets lost somewhere in the aether?

A trip to Fry’s. This week also saw the closure of Fry’s Electronics, a legendary electronics mega-store that played a key role in some of Silicon Valley’s hardware and software legends. In the pre-AWS era if you wanted to scale your online business, you pretty much had to run to Fry’s to buy more servers to stick in your actual garage to meet capacity. I would often visit Fry’s in Palo Alto on my trips to the valley. Under the guise of pretending to be interested in the latest laptops or tablets, I was basically just going into the store to try to absorb some of the last lingering fumes of an eco-system that had already moved beyond the set of challenges that Fry’s was designed to solve.

So what’s new? Retail has evolved and physical stores are challenged. But technical infrastructure has also evolved — it lives in the cloud now and is defined by code and provided as an infinitely scalable service. What is less clear — however — is how the fabric of technology business has changed as well. Are our business relationships going to be fully virtualized as well? Is the human-to-human, eye-to-eye, face-to-face basis of the founder-VC relationship going to feel as quaint as Fry’s? I am not sure. I think we’ll eventually end up in a better place — one that fuses the benefits of our cloud-native world and the opportunities of international video calls with the power of strong face-to-face relationships powered by human-to-human trust built over time and in person. The best VCs will learn to operate this ways. Global rapid deal triage will remain — but for the toughest decisions, the most contrarian cases driving the best returns, face-to-face time and therefore smart focused travel and deep networks will remain essential. If we play our cards right — this means more opportunities to work with who we want to work with to create the biggest impact on the world and more opportunities to invest in our families, our children, and our the health of our souls. I’m excited to see what this new world brings.

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.

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

• We’ll be announcing more sessions soon…..stay tuned!

Check out: www.angularventures.com/events for additional upcoming events, recordings of past events, and to subscribe to our event series.

From the blog

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/Security. SentinelOne gears up for the largest IPO in the history of Israeli security software. “Israeli-founded cybersecurity company SentinelOne is preparing for an initial public offering at a value of around $10 billion. According to a report by Bloomberg, the offering could happen this year, although the company’s plans are in the early stages and the valuation and timing could still change.”

• Spain/Ecosystem. A new set of laws in Spain is designed to boost the local startup eco-system. “There are 50 different measures that will help us to align the efforts of the public and private sector in order to build the entrepreneurial nation we want to build. In the short term, we want to pass the ‘Startup Act’. This law is going to be another step forward, showing how Spain wants to be in this competition, and the specific content is going to be the following: answering to the historic demands of the ecosystem. 1. The first is the definition of ‘startup’ that allows this kind of structure to be recognized by the administration, so that we can give them differentiated treatment that allows them to grow faster and have incentives when it comes to creating an innovative business like this. 2. Second, we want to help retain and attract talent. It has to include new regulation for stock options that allows Spain to have the same tools to compete internationally for talent. The law also needs to review the different visas we have in place, to attract talent to Spanish startups. We want to study different tax breaks and investment incentives in order for investors to invest in Spanish startups or startups that have their headquarters here in Spain.”

• UK/Ecosystem. Amy Lewin of Sifted tweeted out some stats on how the UK’s Future Fund distributed GBP 1.12B of taxpayer funds to startups in response to the pandemic.

• Lightspeed lands and expands in London. The storied Silicon Valley firm has hired Paul Murphy as its second partner in Europe. Rumors published on Techcrunch were confirmed by Paul on Twitter later. Paul’s track record spans a number of sectors, but includes Hopin, which is rumored to be raising capital at a $5–6B valuation on the back of pandemic-fueled hyper-growth, making it one of the fastest-growing software companies in history.

• Greece/Ecosystem. Marathon Ventures published a review of the past decade in Greek entrepreneurship and venture. The post includes a spreadsheet of all the data used in their analysis.

• Switzerland/HR. Nexthink raised $180M for their digital employee experience management software.

• Portugal/Low Code App Builder. Outsystems raised $150M for their low-code app development service.

• Israel/Device Security. Armis raised $125M for its agentless device security platform.

• UK/Data Cloud Integration. Matillion raised $101M for its middleware built for cloud data platforms.

• Israel/Cyber Defence. CYE raised $100M for its software that conducts assessments and ‘real non-simulated attacks’ on companies’ security systems to find where vulnerabilities are and predict where others will emerge.

• Spain/DevOps for Salesforce. Copado raised $96M for its developer operations (DevOps) platform built for Salesforce to automate or minimize manual tasks.

• Israel/Bank Data Orchestrator. Earnix raised $75M for its software that allows banks and insurers to personalize offerings to customers.

• Israel/Cloud Storage. Pliops raised $65M for their cloud storage processor platform that focuses on making data centers run faster and more efficiently.

• Denmark/Educational Labs. Labster raised $60M for its provider of virtual science lab simulations to schools.

• Israel/Web App Protection. PerimeterX raised $57M for their protection solution that safeguards modern web and mobile applications and APIs.

• Ireland/Restaurant Software. Flipdish raised $48.5M for its white-label software for restaurants to build and manage their own food ordering platforms, whether for delivery or collection, rather than using third-party services like Deliveroo or Uber Eats.

• Spain/Mental Health. Koa Health raised $36.5M for its digital mental healthcare provider that helps organizations better support employees with a library of evidence-based activities focused on tackling stress, sleeping better, etc

• Germany/Business Bank. Penta raised $36M for its digital platform for business banking for small and medium-sized companies.

• Israel/Data Observability. Monte Carlo raised $25M to help companies better monitor their data inflows.

• France/B2B Payments. Libeo raised $24M for its software that simplifies invoices and payments for SMEs.

• UK/Decision Intelligence. Peak AI raised $21M for its software that helps companies accelerate their AI efforts by making it easier for businesses to get started and see results from AI-enabled decision making.

• Israel/Stock Options Management. EquityBee raised $20M to help start-up employees get the money they need to exercise their stock options before they expire.

• Germany/Spreadsheet App Builder. Rows (previously dashdash) raised $16M to let people build business apps using only spreadsheet skills.

• Israel/Surgery Video Analytics. Theator raised $15.5M for its AI surgical intelligence platform to improve the performance of surgeons.

• Israel/Web Data Analytics. Oribi raised $15.5M for its platform that wants to compete with Google Analytics making it easy to understand your website results and get the actionable info.

• France/User Testing. Maze raised $15M its SaaS platform that lets you run user tests at scale so you can get feedback before rolling out a design update or test copy.

• Estonia/SMB ERP. Kantana raised $11M to scale its manufacturing ERP (enterprise resource planning) platform for SMEs producing locally, selling online globally.

• France/Insurance Distribution. Zelros raised $11M for its platform that allows insurers to distribute and receive products and services, and in particular, insurers to offer automated subscriptions.

• UK/Cloud Storage. StorageOS raised $10M for its cloud-native storage management platform.

• Israel/SaaS Management. Torii raised $10M to help companies to monitor, measure and optimize the cost of all SaaS applications run in an organization.

• Poland/DevOps As Code. Spacelist raised $6M for its Cloud automation startup, n “infrastructure-as-code (IaC)” and a “policy-as-code” platform.

Worth reading

Enterprise/Tech News

• Data is the new sand. Tim O’Reilly argues in the Information that individual units of “data” are not as valuable as many people tend to think. “Our individual data is just not that valuable. Data is not the new oil. It is the new sand. Like silicon, which makes up 28% of the earth’s crust, it is ubiquitous and is only made valuable by an enormous set of industrial-scale processes….So what’s the problem if an individual’s data isn’t very valuable on its own, and only gains value in the aggregate by the collection, refining and delivery of services based on it, and the user gets those services in an explicit trade for the data collected? Let’s try another metaphor. Data is the new Oxycontin. Like an opioid, data is highly addictive and dangerous when overprescribed, but extremely useful when prescribed correctly. It is harmful when companies turn it against their users to enhance their profits or competitive position, but beneficial when it is used on behalf of the people from whom it is collected.”

• The new data stack. Priyanka Somrah of WorkBench discusses the new data stack. In addition to providing a great overview of the current state of the art, she highlights two major trends driving innovation today: (1) the shift to building data-applications directly on top of the data warehouse/lake and (2) the rise of continuous data processing on top of streamed data. It’s definitely worth a read.

• Three trends in DevSecOps. A look at the three major trends driving DevSecOps today: (1) the shift to the cloud, (2) the locus of work shifting to the edge, and (3) more complex software supply chains.

• Digital Ocean S-1. Jamin Ball tears it down. “DigitalOcean has decent scale (especially for an IPO), steady growth, low gross margins (but higher operating margins), and hyper efficient S&M spend / CAC payback”

• Rough trading for SaaS giants. Salesforce and Workday were both punished by the markets despite reporting better-than-expected results.

How to Startup

• How to make sure your executives are scaling. Elad Gil with some great tips on how to identify an executive that is not scaling and what to do about it. “Non-scaling executives come from two places: (a) great junior people you keep promoting from within and (b) external hires. Often it is harder for a CEO to recognize the poorly scaling internal person given common history. Founders want to be loyal to people who took a risk on a company early by promoting them. While this is admirable, you should not let your loyalty to an individual override your loyalty to your company, your (Tens? Hundreds? Thousands? of other) employees, your customers, and your other shareholders. While many CEOs are reasonably good at dealing with external hires who are not scaling, internal hires have a strong emotional component due to an ongoing relationship or personal loyalty.
  Don’t put loyalty to a person over loyalty to your company and the other hundreds of employees on board, or to yourself and your family (given your own financial stake). You need to make the right decision for the company no matter how tough it is given the personal relationship or friendship over the years.”

• Building a talent funnel w. Maddy Cross, formerly of Notion Capital, talks about building a talent funnel for startup. It’s a thorough 9-step overview of this often overlooked part of a founder’s responsibility.

• A US Startup Visa? The NVCA is renewing its calls for a startup visa to make it easier for founders to come to the US to set up their businesses. Amen.

• Exit backstory. Not a B2B company, but Calcalist has a fascinating backstory on the events leading up to MyHeritage’s decision to exit to Francisco Partners for $600M.

• Some advice on dealing with rejection. D’Arcy Whelan offers some tips on how founders should follow-up after (and bounce back from) VC rejections. “Every touch point is an opportunity to share helpful information (e.g. customer, product or licensing developments), promote the success of your business (e.g. awards, senior hires) and develop the relationship. Investors may be juggling a few companies at a time so it’s great to keep positioning your business at the forefront of their pipeline and minds.”

How to Venture

• Need more structure? A really good format for VC-to-VC catchup calls by Jordan Cooper. Anyone want to try it? Ping me!

• European government handwringing. While EU VC continues to hit new highs all the time, some at the EIC (European Innovation Council) are intent on worrying that the market is “broken” in that fundamental innovation is not being backed.

• A vision of post-pandemic VC. Balthazar de Lavergne believes post-pandemic VC will be about distributed global firms that become networks of advice and capabilities. At Angular, we couldn’t agree more and have been operating in precisely this way since long before the pandemic. We are already a small but very international team spread over multiple cities and leveraging an active network of venture partners and venture advisors to drive real tangible impact for our portfolio companies. We’re glad this vision is increasingly shared. “My thesis is that the best VCs will turn into global platforms with several offices, managing billions of dollars and bundling capital & operating expertise for companies as soon as they reach Product-Market Fit.”

Portfolio News

KintoHub’s team is joining Cash App.

Crux OCM was selected by Phillips 66 for a pipeline control center operations pilot.

Aquant is helping transform workforces into service heroes.

Datos Health’s CEO, Uri Bettesh, shares why the future of remote care automation begins with cardiac rehabilitation.

Planable launched Social Teams 100, a list celebrating the top companies who hired the most social media professionals in 2020.

Sisense unveils Sisense Fusion, an AI-driven analytics platform designed to make data analytics simple, scalable and actionable.