Angular Ventures Weekly Refresh

Angular Ventures Weekly Issue #223: For the week ended April 30, 2024

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Angular Ventures Weekly refresh

We’re delighted to share that the Angular Ventures Weekly newsletter is getting a refresh! Starting next week, our newsletter will have a fresh look and a brand-new name: The Angle. Please note that our email provider will also be changing, so please check your spam folder if you do not see the newsletter in your inbox next Tuesday. The relaunch marks a significant milestone as we continue to evolve and adapt to better serve our community.

The Angle will continue to deliver the same content: a weekly column, worth reading enterprise tech news, European and Israeli funding news, and highlights from our portfolio companies. With over 12,000 subscribers, we are immensely grateful for your support and engagement. We would love to hear your thoughts on our new newsletter. Thank you for being a part of our subscriber base, and be sure to look out for The Angle in your inbox next week!

Anne, David and Gil

FROM THE BLOG

Revenue Durability in the LLM World
Everything about LLMs seems to make revenue durability more challenging than ever.

A Robotic Future for Retail Grocery, Finally.
Why we invested in Finally.

A Digital Fabric for Maritime Trade
Why we invested in Portchain.

Three Keys to the Kingdom
The sometimes-competing and sometimes-aligned goals that early-stage founders must manage.

EUROPE AND ISRAEL FUNDING NEWS

Germany / SaaS. Parloa raised $66M, led by Altimeter Capital, for its conversational AI platform for customer service.

Ireland / SaaS. Tines raised $50M, co-led by existing investors Accel and Felicis, for its platform for building automated security remediation workflows.

France / SaaS. Zefir raised €11M, led by internal investors Sequoia and others, to continue building its “collective selling” platform for real estate transactions.

Germany / ClimateTech. Goodcarbon raised €5.25M, led by Ocean 14 Capital, to expand its carbon offset platform globally.

France / SaaS. Upflow raised $5M, led by Lorimer Ventures, for its cash collection automation platform.

UK / ClimateTech. Camion raised €2.7M, led by EQT Ventures, for its EV charging and intelligence platform.

WORTH READING

ENTERPRISE/TECH NEWS

Nvidia’s shopping spree. Nvidia is buying two Israeli startups, Deci and Run:ai. Both startups aim to lower the cost of running or developing AI models. Lowering the cost of running AI models is quite strategic for Nvidia as “exploding appetite from tech companies to run AI models over the past 18 months has sent demand for Nvidia’s chips skyrocketing, multiplying its revenues by many times. But companies are increasingly questioning the return they get from AI models, which are expensive to run and prone to mistakes. If Nvidia can help bring down the cost of running models, it could keep companies coming back to buy the technology — and in turn its graphics processing units.” Run:ai will be acquired for $700M and Deci’s purchase price has not yet been released.

Rethinking Business Intelligence. Benn Stancil proposes a shift towards BI tools that offer stronger opinions on data interpretation to address the industry’s current shortcomings. “This is the real reason why BI tools are a tar pit:10 They solve the wrong problem. They’re focused on protecting us from bad inputs, and don’t do nearly enough to stop us from screwing up the outputs. And until one does that, we’ll keep feeling frustrated, keep churning through tools, and keep wondering why nothing seems to work. Maybe it’s time to try another approach. Stop giving us more exploratory interfaces to get lost in. Stop waiting for us to become “data literate.” Assume we aren’t, and won’t be for a long time. If we were jaded about that, what would we build then?”

SaaS M&A challenges. Two Sigma’s Villi Iltchev provides insights into why the SaaS market isn’t experiencing consolidation akin to the on-prem software companies of the early 2000s. “It is my view that the tepid M&A environment will continue for the foreseeable future. I do not believe large software vendors will embark on ambitious consolidation strategies. The IPO markets will continue to be the path to liquidity for the select few companies that are able to build escape velocity to reach $100 million in revenue, focusing on large addressable markets, and are still growing >40%. SaaS vendors with $20–100 million in revenue, growing +/- 30% will never reach the IPO milestone. Nor are those companies getting acquired. They will have to become profitable and create value for their investors in the absence of a liquidity event.”

HOW TO STARTUP

First 10 customers. Uncork’s Amy Saper wrote a great post on how to find and select your first 10 customers. The entire post is worth reading but the common traps to avoid are particularly important, especially her section on reaching out to big “shiny” companies too early. “It can be tempting to reach out to massive enterprise companies early on, especially if you eventually see yourself targeting the enterprise market. However, larger, more established companies tend to be less willing to provide great feedback, have less patience for the inevitable bugs and bumps in the road that go with early stage products, and can also be less willing to give you a second chance if you fail to impress them in an early meeting. There are some exceptions here of course, notably if you have close personal relationships inside large organizations, but in general, be careful about targeting the largest customers in your first set of outreach when you’re still working out kinks in your messaging and your product.”

The state of the startup market. Crunchbase released 11 charts that highlight the state of the startup world in 2024.

HOW TO VENTURE

Dear VCs. Axios published a rather harsh open letter to VCs stating how the VC model is currently broken, as funds are not exiting companies.

• “Limited partners are in this for the coin too, and for years have been stuck in a liquidity drought of your making.
• VCs let startups stay private longer, often well past the hypergrowth phase that justified sky-high valuations. Now they’re praying some still will mature into those inflated prices.
• It’s swinging for the fences on every pitch, rather than taking the single or double that’s available.

A whopping 37% of “unicorns” are being held for at least nine years by VC funds, including 13% that are past the 12-year mark, per PitchBook and the NVCA. Remember when you told LPs that your fund had a 10-year distribution period?”

PORTFOLIO NEWS

LightSolver’s CEO Ruti Ben-Shlomi was recently published in Inside Quantum Technology’s “Quantum Particulars”. In her article, Ruti introduces LightSolver’s quantum-inspired technology which harnesses the power of lasers to compute faster than the most powerful classical and quantum computers.