YSL Europe/Israel Enterprise/Tech Weekly

The Angle Issue #11: January 18, 2018

Good morning from sunny Tel Aviv (Cafe Lulu, the HQ) - and welcome to issue #11. Please feel free to email me with comments - and if you like this - please forward to friends and subscribe!

From the blog

New blog post: The Evolution of the AI/ML Application Space. "While algorithmic complexity plays a role in making a problem 'easy' or 'hard,' I would argue that it’s not the main factor. Computational complexity is not a factor at all thanks to tremendous improvements in compute power and cloud compute. The real drivers of difficulty are things that have nothing to do with the mathematics and computation of AI/ML, but have to do with the nature of the application space itself." Click here for eight souces of difficulty (and barriers to entry) in AI/ML. 

2018 EU+IL VC Data. This post has been viewed over 4K times, but since it was a lot of work to put together, so I'm ok plugging it for one more week: My quarterly data deck on European & Israeli venture capital investment trends, summarizes $20.3B of VC investment summarized in 74 free slides. For the full, downloadable report, click below:
 

Portfolio News

How cool is it that Front's product roadmap is a publicly-available Trello page? 

Siemplify announced 1000% bookings growth in 2017. New customers including a Fortune 500 US financial services provider, a Euro STOXX 50 European bank, a Global 500 APAC- headquartered engineering group and several leading MSSPs

An interview with Profitect CEO Guy Yehiav on the evolving use of analytics in retail. 

Europe/Israel Enterprise/Tech

• US/Tax Repatriation. Apple announced it would take a $38B tax hit as it repatriated some of its $252B overseas cash balance. This is important to European and Israeli startups because, historically, the availabilty of large cash balances overseas was used by American companies to acquire European and Israeli startups with overseas "pre-tax" dollars, effectively lowering the acquisition price and, thus, artificially jacking up the size of some acquisitions.

• Israel/Healthcare. Start-Up Nation Central, a nonprofit organization that aims to connect Israeli startups with investors, and PwC Israel and Health Research Institute have jointly set up a digital health toolbox for Israeli startups, to help them navigate the intricate US healthcare system.

• Israel/Security. YL Venture's Ofer Schreiber on the state of Israeli Cyber. Alongside Glilot, YL Ventures has done a great job branding themselves as a thought-leader in cyber security. 

• EU/Supercomputing. The EU is launching a $1.2B supercomputing initiative and - thanks to Brexit - the UK is not involved. The thrust of the program seems to be to build a "European" supercomputing platform to reduce the security risk of running sensitive compute jobs on platforms built by geopolitical rivals. 

• Israel/IoT Security. 83North (formely Greylock Israel) led a $13M Series A round into VDOO to secure connected devices. Congrats, Gil Goren!

• Dublin/AI. University College Dublin announced a EUR 4M AI research project together with Samsung. 

• UK/Bots. Smartsheet acquired the UK's Converse.ai to bring natural language capabiltities in-house. 

• Israel/Logistics. Brigg raised a $12M round led by Salesforce Ventures. Bringg’s delivery logistics platform is used by retail, ecommerce, food, services, and logistics providers in over 50 countries. Customers include brands such as Coca-Cola, Kimberly Clark, Panera Bread, Cdiscount, and Hilti.

• Tel Aviv/Paris/Auto-Dollars. Auto alliance Renault-Nissan-Mitsubishi, also known as Alliance Ventures, announced on that it was launching a new $1 billion venture capital fund for “next-generation mobility,” with offices in Tel Aviv, Silicon Valley, Paris, Yokohama, and Beijing. Remember than corporate VC funds are cheap to announces as capital is rarely "committed" into an actual "fund." But it's a big number nonetheless. 

• Barcelona/Counterfeit Detection. Barcelona’s Red Points raised a $12 million round led by Northzone with participation from Mangrove Capital Partners and Sabadell Venture Capital. The company develops a SaaS-based product for detecting content and goods that infringes on intellectual property and issuing takedown requests. The software uses keyword monitoring, image recognition, and machine learning to detect infringing content.

• UK/Facebook. The Wall Street Journal reports that Facebook is expanding its internal inquiry into the degree of Russian interference in Brexit. 

• Israel/Weak Dollar. The strong Shekel is hurting Israeli tech: "Along with a rise in local salaries of between 5% and 15% in the last year high-tech companies are also seeing their costs rise 10% because of the eroding dollar, said Rami Fital, chief financial officer of the 83North venture capital fund. As a result, the interval between funding rounds is shortening. A company that had enough capital for two years has lost three months of it just because of the exchange rate." I'm sure currency is part of this, but sounds like tech salary inflation is the real culprit. 

• Israel/Delicious. Israeli startup develops ice capsules to make instant ice cream at home. See? Some startups really are snowflakes. 

Worth reading

• Freemium vs Free Trial vs Hybrid Customer Acquisition Model in SaaS. A thoughtful piece on how to choose the right pricing model for a SaaS business. 

• Sequoia launched a new $180M seed fund. I guess I'll just have to work even harder....

• Monolith v. Microservice v. Serverless. Elliot Forbes takes a look at these three infrastructure paradigms. The real winner, he argues, is the developer who has more architectural choices than ever before.

• Commoditization of AI/ML. Google launched Cloud AutoML: "Cloud AutoML helps businesses with limited ML expertise start building their own high-quality custom models by using advanced techniques like learning2learn and transfer learning from Google. We believe Cloud AutoML will make AI experts even more productive, advance new fields in AI and help less-skilled engineers build powerful AI systems they previously only dreamed of. Our first Cloud AutoML release will be Cloud AutoML Vision, a service that makes it faster and easier to create custom ML models for image recognition. Its drag-and-drop interface lets you easily upload images, train and manage models, and then deploy those trained models directly on Google Cloud. Early results using Cloud AutoML Vision to classify popular public datasets likeImageNet and CIFAR have shown more accurate results with fewer misclassifications than generic ML APIs." 

• Javascript's Rising Stars. A look at which projects got traction in 2017 by comparing the numbers of stars added on GitHub over the last 12 months.

• Beyond the Bitcoin Bubble. The New York Times Magazine has this good long read on blockchain, bitcoin, and what comes next. Also on Bitcoin, Brad Feld of Foundry Group offers a thoughtful rumination on how it can all go to zero. 

• AI Chips. The New York Times on how the AI explosion is causing a boomlet in specialized semis: "Graphcore, for example, is building chips that include more built-in memory so that they don’t need to send as much data back and forth. Others are looking at ways of widening the pipes between chips so that data exchange happens faster. “This is not just about building chips but looking at how these chips are connected together and how they talk to the rest of the system,” Mr. Coughran, of Sequoia, said. But this is only part of the change. Once neural networks are trained for a task, additional gear has to execute that task. At Toyota, autonomous car prototypes are using neural networks as a way of identifying pedestrians, signs and other objects on the road. After training a neural network in the data center, the company runs this algorithm on chips installed on the car. A number of chip makers — including start-ups like Mythic, DeePhi and Horizon Robotics — are tackling this problem as well, pushing A.I. chips into devices ranging from phones to cars."

• Solarwinds acquired Loggly. From Techcrunch: "SolarWinds, the company behind services like Pingdom, Papertrail and AppOptics, today announced that it has acquired the cloud-based log-monitoring and analytics service Loggly. The two companies did not disclose the price of the acquisition, but Loggly, which was founded in 2009, had raised about $47 million over the years, including an $11.5 million Series D round in 2016. Investors include True Ventures, Matrix Partners, Cisco, Trinity Ventures and Harmony Partners. According to its marketing materials, about a third of the Fortune 500 use the company’s services, including the likes of Lenovo, Pizza Hut and Dell."

• Tunnel vision. Hyberloop is coming to life.