YSL Europe/Israel Enterprise/Tech Weekly

The Angle Issue #19: March 21, 2018

Hello from sunny Tel Aviv and welcome to issue #19!
(HQ for the week - Cafe Zorik)

To be honest, this was a dark week in tech (Cambridge Analytica and Facebook scandal, Theranos charges, Uber death, and an Israeli VC #MeToo). But today is the first day of spring, and let's hope that next week brings somewhat brighter news. See below for some pretty interesting links on GDPR, Lightening, and how crypto can be used to power AI/ML....

Please feel free to email me with comments - and if you like this - please forward to friends and subscribe if you haven't already. Thanks!

(Please remember to add weekly@yankeesabralimey.com to your address books.)

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

• Israel/Semi Cap Equipment. KLA-Tencor announced it was acquriring Orbotech for $3.4B. Orbotech was launched in 1981 and is a leader in semiconductor capital equipment, specializing in optical inspection of PCBs and Semis. Born before the advent of the Israeli VC industry, the company recieved backing from Uzia Galil and Elron, went public in 1984, and became a pillar of the Israeli technology sector, employing 2,600, most of them at its HQ in Yavne, south of Haifa. 

• UK/Norway/Social Data. Meltwater (born in Norway but now based in SF) acquired Datasift, the London-based social data platform for an undisclosed amount of capital. Meltwater has raised about $60M of debt capital (no equity) and has made a series of acquisitions recently. Datasift, which ran intro trouble in 2015 when Twitter cut off its data supply, has raised $72M from Insight, Scale, and Upfront. If you happen to know the terms of the acquisition, drop me a line.

• UK/Fintech. Experian announced it would acquire London-based Clearscore for GBP275M. Clearscore, launched in 2015, is free consumer credit checking service which is supported by ad revenue. 

• Israel/Digital Health. A digital health complex has been launched in Haifa to support startups in the space.

• Israel/Security. Solebit raised $11M to defend against zero-day malware.

• Europe/GDPR. Wired has a long read on why - especially in the wake of Cambridge Analytica - GDPR is looking less and less like senseless protectionism and more and more like an important piece of legal infrastructure that will have wide (and mostly positive) social implications.

• Sweden/Security. Swedish security company Detectify raised EUR 5M in a round that, noteably, was led by Insight Venture Partners. Insight has been stepping up their activity in Europe recently, announcing a number of deals. The round size on this deal suggests (but doens't confirm) that this is an earlier-stage deal than is typical for Insight. Detectify provides an automated pentesting service powered, in part, by a network of white-hat hackers. Trello is a customer.

Worth reading

• System of Incentives for ML. This week's "must read" is by Fred Ehrsam, co-founder of Coinbase on how blockchain technology enables a system of incentives to drive machine learning forward. To my mind, this is one of the potentially killer apps for crypto. Here's a taste: "Incentives to attract data are the most potent part of the system as data tends to be the limiting factor for most machine learning. In the same way Bitcoin created an emergent system with the most compute power in the world through open incentives, a properly engineered incentive structure for data would cause the best data in the world for your application to come to you. And it’s nearly impossible to shut down a system where data is coming from thousands or millions of sources. Competition between algorithms creates open competition between models/algorithms in places where it previously didn’t exist. Picture a decentralized Facebook with thousands of competing newsfeed algorithms."

• Don't buy the AI hype. This interesting piece in venturebeat argues that AI is over-hyped in many enterprise contexts: "An AI is only as good as the data it receives. And it is able to interpret that data only within the narrow confines of the supplied context. It doesn’t “understand” what it has analyzed, so it is unable to apply its analysis to scenarios in other contexts. And it can’t distinguish causation from correlation. AI is more like an Excel spreadsheet on steroids than a thinker."

• Salesforce acquires Mulesoft. The world's enterprise SaaS giant bought integration vendor Mulesoft for $6.5B, a 36% premium over the market price. Ben Kepes argues that this is evidence of how important Salesforce believes SaaS/API integration tooling is as the company attempts to roll up the enterprise cloud. 

• Looking back at Spotify. My friend Frederik at Creandum wrote a thoughtul post on his decision to back Spotify at the seed stage in 2007 - noting both what he got right and wrong at the time. Nope, not enterprise, but super interesting. Techcrunch also has a piece on why Spotify has chosen an unconventional IPO route.

• Adtech duopoly eroding? For the past several years, the dominant narrative in the adtech world has been the increasing concentration of power among the giants (Google and Facebook), and the increasing difficulty for startups attempting to crack the space. This week, the WSJ cited new data from eMarketer suggesting that this duopoly may be eroding for the first time. Google & Facebook's combined share of the US digital advertising business will drop this year from 58.5% to 56.8%.

• Fast as lightening. Lightening Labs announced that it raised $2.5M (an admirably conservative number in today's crypto craze) and, more importantly, launched the Lightening Network, a protocol designed to enable the blockchain to scale dramatically beyond its current limitations in terms of the speed and volume of transaction processing. For much more on Lightening, read this interesting piece by (Israeli) Meni Rosenfield, who argues that for many people, what Lightening is doing has always been the vision for how blockchain should be implemented.

• Voice interfaces are going to be big. Amazon CTO Werner Vogels on the importance of voice to the enterprise.

• Big Google is Watching You. Police in Raleigh, NC, presented Google with a warrant for "data from all the mobile devices that were within a certain distance" from a crime scene.

• Autonomous death. A self-driving car operated by Uber killed a woman in Arizona. Aside from the obvious human tragedy here, this story is an interesting litmus test for views on automation. One the one hand, it appears that the death in this case was likely the result of reckless behavior on the part of the pedestrian and that no vehicle (automated or manual) could have avoided this incident. Furthermore, even if it were to emerge that the algorithms were at fault, a strong case could be made that occasional harm to people is an inevitable part of technological progress (how many people died in early cars or early aircraft?). On the other hand, there is no denying the ominous emotional undertones of the incident - being cited as perhaps the first time that a human died as the result of decisions taken by an autonomous machine. 

• Send in the accountants. PWC want to audit the blockchain. 

• Gender bias. A Swedish study on the impact of gender bias on VC decision-making. The study looked at four specific beliefs held by many VCs about gender relating to risk tolerance, performance, and other factors: "In total, none of the beliefs VCs expressed about female versus male entrepreneurs could be backed up by data related to how ventures actually performed."

Portfolio News

Chorus.ai's new VP Sales, Joe Caprio, on what they are building: "Wait..we can we tap directly into the conversations sales teams have with their customers and prospects, help ensure the key moments from those conversations get into your CRM, and then help find an intelligent way to synthesize that data for better decision making?" Yup.

Pedro Fonseca, CTO of James, has put out a call for engineers (especially female engineers) to apply for a program he is running at the Lisbon Data Science academy, which he co-founded. Check it out. 

You've probably heard enough about Front from me, but the company did release their Series B deck that led to their $66M round led by Sequoia, and it's worth a look. This is part of Mathilde's (and Front's) commitment to radical transparency.