YSL Europe/Israel Enterprise/Tech Weekly

The Angle Issue #23: April 30, 2018

Good morning from San Francisco — and welcome to Issue #23! HQ for this (early) morning is Cafe de la Presse, a little corner of Europe here on the West coast. Check it out between acai bowls and breakfast burritos next time you are in town.

Last week saw strong earnings reports from Microsoft, Facebook, and — especially — Amazon which seemed to — at least for the moment — sweep aside the “break up big tech” theme that has been building for several months. The T-Mobile/Sprint mega-merger announcement also played into the narrative that big tech is here to stay for a while longer. Docusign’s IPO valued the company at $4.4B, well above the price of its last round ($3B), signalling that the tech IPO window is wide open for leading enterprise SaaS businesses. Worth noting, as Villi Iltchev pointed out in tweetstorm, that it took Docusign 15 years to get to this point — the company was founded in 2003. He also pointed out that their relatively high multiple was driven mostly by their 85% gross margin, and not their relatively modest growth levels. Growth is good, but profitable growth is great.

From the blog

Moltin. Why I invested in Moltin’s Seed Round.

2018 EU+IL VC Data. $20.3B of VC investment summarized in 74 slides.

Europe/Israel Enterprise/Tech

• Denmark/Robotics. US-based Teradyne acquired Danish robotics maker MiR for $272M. MiR was founded in 2013 and reported $12M in revenue in 2017. The company builds autonomous mobile robots for industrial settings, most recently “the MiR200 which can lift 440 pounds, pull 1,100 pounds, is ESD approved and cleanroom certified.”

• Israel/AI. Allegro.AI raised $11M for its AI development and management platform.

• Israel/Databases. ScyllaDB raised $10M for its cloud database infrastructure offering.

• UK/Infrastructure. Pusher raised $8M for its suite of real-time application infrastructure products, including an event-based API for pub/sub messaging, push notifications, and chat infrastructure. The company plans to expand its San Francisco presence.

• UK/Regtech. Clausematch raised $5M to help enterprises collaborate around regulatory compliance.

• UK/Adtech. Oracle acquired Grapeshot, a contextual targeting startup. Terms were not disclosed.

• Israel/AI. Oren Gershon, head of Artificial Intelligence Products Group (AIPG) at Intel Israel gave a great 15-minute talk on the future of AI. (Shoutout to Hillel Fuld!) Among other things, he showed off the Intel Nirvana AI chip — the world’s first AI-dedicated processing system.

• UK/Brexit. The Financial Times covers the impact of Brexit on London’s tech scene. While I think most of the data the cite in the article is not really relevant to the argument, the anecdotes most certainly are.

• Israel/Tax. Multinationals R&D centers, which account for 50% of the R&D spending in Israel, may soon need to pay higher taxes on options granted to employees. Advocates say this levels the playing field a bit for local companies competing fiercely for talent. Opponents say this will discourage foreign companies from expanding their Israel operations.

Worth reading

• Where is early-stage financing headed? Techcrunch published a fascinating and data-driven discussion with Peter Wagner of Wing Venture Capital: “Today’s cumulative seed capital — because it often comes in in multiple rounds — is larger than the average Series A round was in 2010, which wasn’t all that long ago. The average Series A in 2010 was $4.9 million; by last year, it had reached $12.1 million. The average amount of seed funding a startup raised in 2010 was $1.4 million; as of last year, it was $6.3 million.” Click through to the story for the data itself. If you are in the mood for more on this theme, Crunchbase also put out some solid data and analysis on where the San Francisco startup scene is headed.

• Frontier Tech: Plus ça change, plus c’est la même chose. Shahin Farshchi of Lux Capital reflects on the promises and challenge of frontier tech from a VC perspective. He runs through three areas (satellites, quantum computing, and driverless cars) all as challenging as they are promising. Shahin argues that — unlike in cleantech — the end products of the current generation of frontier technology startups are unlikely to be pure commodities. That said, he cautions CEOs to navigate carefully between strategies that require too much capital on the one hand and strategies that sacrifice long-term potential for short-term revenue on the other.

• Two tech VC funds branch out. Kleiner Perkins announced a new $298M cleantech fund and DCVC announced a new $250M bio-focused fund.

• “The internet belongs to the Americans — but blockchain will belong to us.” The NY Times on why Russia’s intelligence community is paying a ton of attention to blockchain.

• User-centric Windows. Apparently, a major update to Windows is coming out this week, and one of the major new features is a “timeline” where users can track their activity in windows across multiple devices. According to Aaron Woodman (GM for Windows Product Marketing), “one of the big changes you see with Windows Timeline is that it embraces the end customer over the individual machine.”

• Do you know where your (genetic) data is? Last week, law enforcement officials in California arrested a man for a series of murders from 1972–1984. They found him using banks of genetic data from other people that no one ever expected would be used for this purpose, raising a long series of very thorny questions.

• An industry insider view on blockchain. Here’s a interesting look at blockchain from the perspective of the shipping industry: “Issues such as a lack of standardised procedures, an unwillingness to share information with hundreds of other businesses — some of them competitors — and the extra cost of data storage make blockchain a farfetched application for the shipping industry in the near term.” For another, even darker, take on blockchain, check out this piece by former Intuit CEO Bill Harris:”Bitcoin is the greatest scam in history: It’s a colossal pump-and-dump scheme, the likes of which the world has never seen.”

• The view from DARPA. DARPA, the US Defense Advanced Research Projects Agency that famously played a key role in the invention of the early internet, is alive and well — and pursuing a range of futuristic technology including: hypersonics, directed energy, AI/ML; quantum science for both encryption and computing; and microelectronics.

Portfolio News

Rollout on which devops metrics actually matter.

I curate this newsletter by hand and hope you find it useful. I am an early-stage VC and angel investor based in London and Tel Aviv and investing across Europe & Israel. You can follow me on Twitter andMedium or connect with me on LinkedIn. If you are running an early-stage start-up in the enterprise space anywhere in Europe or Israel, I’d love to hear from you to see if I can help. You can find a list of current portfolio companies here.

Yours,
Gil Dibner

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