Enterprise & Deep Tech Weekly
Issue #129: For the week ended February 1, 2022
Firebolt, Forwrd, and Finance
Gil Dibner
I. Another Unicorn. As Firebolt’s brilliant marketing team illustrated, these days another unicorn is born almost every day. Still, when it’s one of your own, it’s something to celebrate. We are thrilled to congratulate Firebolt on their $100M round and shiny new $1.4B valuation. We at Angular Ventures are thrilled to have been the first investor in Firebolt. (You could even argue that by backing Sisense, we’ve been backing a lot of the Firebolt team since before they formed the company…) We invested in the first round, participated in every round since, and were proudly a significant investor in this last financing round as well. Thank you to Eldad Farkash, Saar Bitner, Asaph Schulman, Boaz Farkash, and the entire Firebolt team for letting us be a small part of your story! The round size and the valuation are — in my opinion — not why Firebolt is interesting. What makes Firebolt TRULY special are these three things:
1. Technology. Firebolt’s technology is blazingly fast and revolutionary — ensuring that all customers have fully optimized cloud-native data warehouses from day zero.
2. Team. Firebolt’s fully-distributed team is one of the strongest ever assembled in the data space — and one of the strongest ever assembled this quickly by an Israeli company. This trend continues with the announcement that Mosha Pasumansky, previously a principal engineer on Google Cloud’s BigQuery team, has joined as the company’s US-based CTO.
3. Revolutionizing the economics of an industry. What’s most exciting to me about Firebolt is the way they are revolutionizing the economics of the data warehousing industry itself. This is often a reliable indicator of a true technological breakthrough: companies that bring true technological paradigm shifts to market are often the companies that totally re-write the way pricing works — and when you do that, you are really bringing the benefits of technology to customers in powerful and tangible ways.
II. Announcing our investment in Forwrd.ai. We are also super excited to take the covers off one of our more recent investments, Forwrd.ai, which came out of stealth this week, announcing the $3.5M round that Angular Ventures led last year. Led by former WalkMe SVP of Product, Kobi Stok, Forwrd.ai is a complete re-imagining of how enterprise knowledge workers — particularly in sales and revenue-driving functions — will implement predictive analytics and integrate them with their daily workflows. Forwrd.ai’s thesis is that a no-code customer-built approach to predictive analytics can truly democratize these powerful analytical tools for the first time. With Forwrd.ai, every sales ops manager and account executive can build their own predictive models for things like churn, lead quality, PQL conversion, or anything else by leveraging a powerful set of easy-to-use tools. The company’s key insight is that these sorts of analytics should be (1) focused on the business user and (2) designed to be built by that user without the help of data scientists and leveraging the business users’ deep expertise. We are immensely impressed by Forwrd.ai’s ambitious and comprehensive product roadmap — and blown away by the quality and thoughtfulness of what they have already built. If you want to see the future of predictive analytics in real-world business settings — drop them a line.
III. Raising capital in a focused way. As I write this, the Nasdaq has just closed down 8.99% for the last Monday of January, narrowly missing its worst ever January performance record. Multiples are way down across the board for tech companies, especially tech companies that are not turning a profit. Late-stage investors are reportedly lowering valuations on deals in progress, pulling back from promised investments, and dramatically slowing their pace. Early-stage investors are noticing the change as well. Until recently, founders seemed to be optimizing for headline numbers: maximizing the amount of cash raised and raising valuations to the highest levels the markets would bear. It’s too early to say if this pattern is reversing itself, but my sense is that the smartest founders are starting to rethink their approach. High valuations are not always best for founders. Huge war chests are always valuable, but can not — alone — set a company on a course for success.
Founders that recently raised large rounds should think very carefully about their burn rate and what needs to be achieved to justify the valuations they have just attained. The bar has risen, and so the distance from where you are today to where you need to be to raise again is probably a lot greater than it appeared when the ink on that term sheet was still wet. But the good news is, you have cash on your balance sheet. Spend it (invest it) wisely in the right hires and the right activities, and it should take you far enough.
For founders that are setting out to fundraise now, these may turn out to be challenging times: you will be trying to fundraise in a climate of increasing uncertainty and compressing valuations. That said, if you focus on the individual people you are raising capital from and what your actual cash needs are — you might be able to chart a course through these stormy waters. Raise only the cash you know you can effectively invest in de-risking your company and achieving proof-points to support your narrative. The rest will work itself out. The topic of valuation came up a few weeks ago as I sat with one of our portfolio CEOs for dinner under the sky in Tel Aviv. “Don’t care what my valuation is today,” he said. “All I care about is having enough cash to operate, the valuation at the IPO when we go public, and the amount of the company I still own when that day comes.”
Heading to Tel Aviv. I’ll be in Tel Aviv Feb 4 to Feb 16. If you are working on something ambitious, amazing, or impossible — please let me know. I’d love to buy you coffee.
Regards,
Gil
EVENTS
Feb 16 / Building a RegTech Company
Eynat Guez, CEO of Papaya Global & Neta Meidav, CEO of Vault Platform
Mar 23 / The Importance of Culture and Values As You Scale a Business
Oren Kaniel, Co-Founder & CEO, AppsFlyer
FROM THE BLOG
What Childhood Can Teach Us About Entrepreneurship
Childhood as a solution to the early stage entrepreneurship explore–exploit dilemma.
How to Overcome “Customer-Built” Software’s Learning Curve
“Customer-built” companies and the challenge of user activation.
The Long Road to Creating a Category:
Category creation strategy, with a little inspiration from Apple.
Three Methods of Venture Capital:
A guide to navigating a manic market as a venture capitalist (part 1).
EUROPE & ISRAEL FUNDING NEWS
Israel/Crypto Infrastructure. Fireblocks raised $450M for its digital asset custody, transfer and settlement platform.
France/SME Health. Patient21 raised $142M for its digi-physical platform aiming to use data to help doctors give the most personalized treatments possible.
Estonia/Security. Veriff raised $100M for its AI-based secure identity verification solution.
Israel/Data Tooling. Firebolt (an Angular portfolio company) raised $100M for its data warehouse for faster, cheaper analytics on large data sets.
UK/ML Tooling. Instadeep raised $100M for its AI-powered decision-making systems to solve some of the world’s most complex industrial problems.
Israel/Security. Hunters raised $68M for its platform helping enterprises replace traditional Security and Information Event Management (SIEM) solutions with their own tools.
UK/Enterprise Financial. BCB Group raised $60M for its platform offers business accounts, cryptocurrency, and foreign exchange market liquidity and custody for a significant number of the world’s largest crypto-engaged financial institutions.
UK/Environmental. Sylvera raised $32M for its carbon offset rating platform.
France/Software Adoption. Stonly raised $22M for its customer onboarding software helping companies create interactive step by step guides.
UK/Security. PQShield raised $20M to help arm legacy cryptography systems with quantum-safe standards.
Israel/Industrial. Vanti Analytics raised $16M for its AI-powered product for manufacturers to identify, explain and prevent defects early in their production processes.
Israel/Construction. SiteAware raised $15M for its software that leverages AI and drones to track construction site progress.
WORTH READING
ENTERPRISE/TECH NEWS
$1B+ di Milano. A rare $1B+ exit for an Italian technology company with space company D-Orbit going public via SPAC. D-Orbit’s key product is its ION satellite carrier, which it advertises as “a flexible, cost-effective” solution to delivering satellites into specific orbits.
A better view of the cosmos. The James Webb space telescope has reached its final destination, having traveled about a million miles since its launch on Dec. 25, 2021. This article, from science reporter Dennis Overbye, is an inspirational reminder of the extraordinary efforts of humanity’s scientists and technologists: “There was no military or economic advantage in devoting 25 years and $10 billion of national treasure to build a telescope, of all things, devoted not to looking down at our enemies, but out across time and space, trying to decipher the nature and condition of our origins. We all share the quest…”
Artificially intelligent warfare. The Pentagon is making a bet on artificial intelligence. This article, from Sue Halpern, provides a deep dive on how artificial intelligence is being used to fly warplanes. But that’s not all. This program is “one of more than six hundred Department of Defense projects that are incorporating artificial intelligence into war-fighting.” Some more examples highlighted by Halpern point to how big a business AI and defense may be: “the Navy is building unmanned vessels that can stay at sea for months; the Army is developing a fleet of robotic combat vehicles. Artificial intelligence is being designed to improve supply logistics, intelligence gathering, and a category of wearable technology, sensors, and auxiliary robots that the military calls the Internet of Battlefield Things.”
HOW TO STARTUP
Scaling leadership to scale growth. Peter Reinhardt, currently the CEO of Charm Industrial and previously the Founder & CEO of Segment, shares some thoughts on the challenges of early company growth here. Segment hit $10M ARR, having grown 300% YoY. Then within 6 months, growth had slowed to just 40% YoY. What happened? The lesson is more one of organizational design and leadership than a clever growth hack. I won’t ruin the secret. Give it a read.
No bad PR. Ryan Breslow, CEO of Bolt (though he just announced he’s stepping aside to become executive chairman), wrote two firecracker threads this past week: one on the “mob bosses of Silicon Valley” (the Stripe founders and Y Combinator, according to Breslow), and the other on the very real, but often overlooked, downsides of going through Y Combinator.
HOW TO VENTURE
Market turmoil inside baseball. There’s been a lot of turmoil in the markets these past few weeks, and this uncertainty has had a huge impact on the mindset of venture capital investors. VCs are all thinking the same thing: how overvalued is my existing portfolio? And will new companies raise at more “reasonable valuations” (read: lower)? Dave McClure does a good job putting words to these conflicted feelings that were undoubtedly discussed at every investor committee meeting this past week.
PORTFOLIO NEWS
Firebolt, a data warehouse startup, raised $100M at a $1.4B valuation for faster, cheaper analytics on large data sets.
Forwrd, an Israeli business intelligence startup, emerges from stealth with $3.5M in seed funding from Angular Ventures.
Datos Health and Permanente Health Care Ventures launched a breakthrough Covid-19 remote monitoring app to ensure back to work safety.
JFrog’s new tools flag malicious javascript packages.
