Mid-year VC Recap

Welcome to The Startup Nation Review, a curated newsletter where I share insights from thought leaders, news, and opportunities around Israel, the Startup Nation. Every week you’ll receive timely analysis from off-the-beaten-path, an aggregation of this week's top headlines, and selected opportunities to further engage with the Startup Nation.

2020 has been a rough year all around, and as we enter its midway point it’s a good time to take stock and hear from a VC's perspective on what the near future may hold.

I've decided to enroll in the ThePowerMBA, you can read my thoughts on why despite the daily grind of building an agency I made this decision now: Why I chose to take ThePowerMBA.

To discuss future trends, I had a chance to connect with Gal Gitter who is a Managing Director at Ibex Investors, where he leads the firm's late A and B-round investments in private Israeli companies. Prior to joining Ibex, Gal was an Associate Partner at McKinsey & Company's Alliances and Acquisitions group, focused on sourcing new technologies for the firm and creating enterprise-grade offerings. Prior to that, he was at McKinsey's Strategy and Corporate Finance practice in the US, advising Financial Institutions, Telecoms and holding companies on growth related challenges.

How is COVID-19 factoring into how you're looking at investments?

For the most part, it hasn't. We are still looking for great businesses with strong and hungry founders that will be able to scale and create real, long term value. COVID has introduced more risk into the system – enterprise and government spending have gone down, and in some industries and geographies, there has been a rapid and significant "spending freeze". For most companies, that decreases their growth projections and increases churn risk across specific cohorts of customers – so we may need to adjust for that in some cases while evaluating investments. 

What is a piece of advice you would give founders today that they haven't heard before from VCs? 

Your go-to-market and channel strategy is as integral a part of your business as your technology, not something to be "figured out" in the future. I often think that startups give too much credit to enterprises – assuming that there is a structured process of outlining all the competitors in a space and ranking them based on their performance across technical attributes. Though that is sometimes the case, that's not how it'll usually work.

Enterprises will evaluate a few companies they have heard something positive about or were randomly introduced to, and very often the selection process will not be "scientific". With that in mind, one of the most critical questions a founder needs to ask themselves about the business, as early as possible, is how to most efficiently enter the initial consideration sets for as many prospects in their target markets as possible. Said differently, how do they generate as many at bats as possible. This will require experimentation, but there should be emerging hypotheses very early on – as the answer to this question can sometimes be the core driver of success/failure for a startup.

Do you see any new or surprising verticals or markets appearing which may have not been relevant in the past?

I wouldn’t yet call them entire verticals, but I see a re-positioning of some companies towards the post-COVID world and a more sustainable advantage for companies who were on one of these waves pre-COVID. Some of these waves will come and go, but some are here to stay. A few key themes that I believe will stay with us are:

1.      Online shopping truly going "mass-market" – we tend to think that the online revolution has been here for ages, but it’s not. Some industries' online sales are minor (i.e., Grocery is still at ~5-10%), and most small/medium businesses do not have a substantial enough online presence. Most businesses that do not offer the ability to view inventory and transact online will simply not survive in the long term. I believe companies well positioned to help these "laggards" will do very well, specifically enterprise grade tools for smaller businesses and/or undeserved industries, across logistics, sales optimization, support, etc. 

2.      Remote everything – The way we work has changed. In my opinion, many companies are frankly not going back to their previous life of having all their employees show up to work every day, and many small businesses have also adjusted to this changing world by offering their services remotely. Platforms that ease this transition will also do extraordinarily well – innovative work or social collaboration tools, differing video platforms for differing uses, remote productivity tools, etc.

3.      Flattening the (digitization) curve – much like in the business sphere, we no longer have the luxury of "skipping over" some individuals en route to total connectivity. If my grandmother frankly cannot use Zoom, access remote medical care or really understand a lot of the options she must communicate and/or be monitored, then we haven’t done a good enough job as a society. That must change and will emerge as a massive market.

A year from now, describe what you think the Israeli ecosystem will look like? 

I believe there will be a divergence – an increasing amount of companies will decline or go under, but an increasing amount will also increase in value significantly. Israelis are really agile by nature, so a differing set of circumstances that effect the entire market can actually create advantages for well-adjusted startups or entire ecosystems, if (and this is a big if) – these companies have access to capital. Thus, I expect the ecosystem here to adjust to this changing landscape quicker than most: Israeli companies will be able to re-position their offerings quickly enough to gain first mover advantages across niches in the trends that I highlighted above.

What is something that you believe that most people in the (Israeli) tech space would disagree with you on? 

That's a hard one! I don't know how many of my colleagues in the ecosystem in the ecosystem would disagree with me, but I continue to see way too many Israeli startups' aiming to reach scale via direct sales. I feel there is a massive under-utilization of indirect sales channels and partnerships in our entire ecosystem. Re-sellers, Advisory firms, Tech-platforms, etc. have many more links to your customers and are all actively looking to partner with you. It’s not easy, and often requires a lot of investment and thought – but when done well, the upside is massive. 

A unique ecosystem yes, but certainly one that can replicated for cities and countries looking to build a strong tech community.

Airtable: Job opportunities in the Israeli tech ecosystem. Click here.

AWS Solutions Architect: They are looking to significantly expand their Solutions Architects organization and are organizing centralized Solutions Architect hiring days on June 14-21. This is a great opportunity for you to join AWS.They are looking for builders that would like to use their creativity and technical expertise to work directly with customers, linking technology to tangible solutions. AWS opportunities here.

HealthIL: Health Organization Innovation Leader at HealthIL. They're looking for top talents with genuine passion for transformation in healthcare. Apply here.

Mobileye: Content Manager. Mobileye's marketing department crafts the company's messaging, manages the brand globally, and executes online and offline campaigns for demand generation and brand awareness. Apply here.

Notion: Community Manager. They’re lucky to have a vibrant, creative community building all kinds of cool things with Notion. They host online and offline events, make videos, share advice and templates, and so much more. This global community plays a huge part in inspiring users in ways we never thought possible. They’re looking for a natural community builder to join the team so we can scale and support this movement even more. Apply here.

Quantum Hub: Analyst & Deal Flow Manager. Quantum Hub is an innovation hub for industrial technologies. Bringing together 100+ industrial companies in Israel and abroad with the most cutting edge tech startups, we aim to revolutionize industrial verticals such as Industry 4.0, Automotive & Mobility, Logistics and Energy. Apply here.

Wix: They're looking for a curriculum development person, familiar with WIX, passionate about technology and code, preferred native English speaker for a really cool project with @Corvid by wix. send her your best! Available immediately. Contact Simona Valsky Goikhman.

Nucleai: Nucleai is growing. Looking for complex ML problems? Challenging FS position? Check out their careers page. Opportunities here.

Rupert: They're looking for developers to join their team in Tel Aviv. They don't believe in ninjas, gurus and other magnificent beings. They're great for movies and comic books. They're looking for good people who want to change how businesses use data and have fun while doing so. Jobs at Rupert click here.

Smule: At Smule, they create social music-making experiences for everyone, no talent required. We are a diverse bunch of musicians, techies, designers, engineers, and real-life rock stars who believe that everyone is inherently creative. Current job openings at Smule click here. 

Yotpo: Yotpo is the leading customer content marketing platform for commerce brands. As a technology-driven company, they help businesses collect every type of user-generated content and use it to build a stronger brand. Opportunities here.

Featured webinar: Venture Summit Virtual Connect | Global: New-York Israel Chamber of Commerce is pleased to announce its sponsorship and invite you to join us at Venture Summit Virtual Connect | Global. Come meet, interact and network online with more than 1,300 VCs, Corporate VCs, angel investors, industry execs and founders of venture backed, emerging and early stage companies at the prestigious Venture Summit Virtual Connect. August 4th – 6th. Special offer: Register Now & Save 20% off Early Bird Rates (Use discount code "NYICCVIP"). Register here.

DLD Sync sessions in June: There are many DLD Sync sessions yet to come, covering a range of topics. You’ll find details on the next three below and can always see our full schedule on our dedicated DLD Sync page. And if you haven’t joined us yet, please know that our interactive online events are complimentary. Webinars here.

BIRD Foundation Funding for Food Manufacturing/Supply Chain Industry: From farm-to-fork, the food supply chain is reinventing itself to stay competitive in response to the Coronavirus pandemic. They invite you to a webinar on an opportunity to win a grant of up to $1 million for your next innovative development project. June 11, 12:00 pm. Register here.

GLOBAL WELLNESS DAY: Global Wellness Day is an entirely not-for-profit day, a social project dedicated to living well. The purpose of Global Wellness Day is to ask the question, even if for just one day, “How can I live a healthier and better life?” Omri Casspi, 10 years NBA veteran, Captain of Maccabi Tel Aviv& Israel National Team and Amir Alroy, co-founder of Welltech1. Join them on Saturday, June 13th 2020 at 19:00 Israel time. Register here.

Water Management During COVID-19: As a provider of critical infrastructure, power and utility companies are working around the clock to ensure that safe, reliable water service continues to flow. What are the best strategies for water management during the pandemic? Join them for a live discussion on current challenges and initiatives, learn from case studies and explore supportive technological solutions. Jun 15, 12:00 PM in Eastern Time. Register here.

Cybersecurity: Digital Transformation Mode: Today, we are witnessing the consolidation of years of enterprise digitization efforts into just several months. New concerns around digital security are arising as a consequence of this sudden transformation. In turn, navigating cybersecurity in today’s digital-first world is both increasingly challenging and essential. Jun 15, 10:00 AM in Eastern Time. Register here.

Ignite the Spark E-SUMMIT: Following the post-pandemic economic downturn, countries around the world, including Israel, are reexamining their energy goals and policies. Over the past year, there have been new developments in the Israeli energy tech sector, and stakeholders are ready to make Israel a global leader in this industry. Tue, June 16, 7:30 AM. Register here.

Deploying innovation: Ensuring a successful expansion to NYC: Join SOSA and Foreign Trade Commission Association for a webinar all about innovation.From ensuring a successful expansion of your ecosystem’s most prominent startups to NYC, to key-takeaways on how one can support the growth and use of innovation in all verticals. Jun 16, 2020 09:30 AM in Eastern Time. Register here.

Coronavirus in Israel (with Fahed Hakim, MD): What does the coronavirus experience look like on-the-ground in Israel from the perspective of a health care professional? Will this pandemic lead to increased and sustained cooperation between Israeli Jews and Arabs? What does the future hold as Israel and the world navigates through this pandemic? Jun 17, 12:00 PM in Eastern Time. Register here.

Enabling eCommerce: Co-Presented by the YU Wall Street and YU Technology Groups. Featuring: Sarah Hofstetter, President, Profitero. Greg Malen, VP Solutions, Similar Web. Wednesday, June 17 | 12:00 p.m. EDT. Register here.

Hear from the Experts: COVID's Impact on the Economy, Education & MidEast: In the non-stop city of Tel Aviv, where innovation is just another way of saying ‘business as usual’, we bring you three of Tel Aviv University's experts – Prof. Emeritus Leo Leiderman, Dr. Miri Yemini, and Prof. Meir Litvak - from the disciplines of economy, education and middle eastern history. They will share with us how indeed crisis can serve as a catalyst to think creatively and discover new solutions to existing and new problems. Wed, June 17, 1:00 PM. Register here.

Virtual Food Innovation Speed Dating: Euro Edition: Come join WeWork Food Labs via Zoom for Food Innovation Speed Dating! This is an opportunity to meet your next amazing hire, client, mentor, future co-founder, or just a new peer in the industry to share learnings & insights with. June 18, 9:00am. Register here.

DLD Sync with Steve Case & Yossi Vardi: Join Steve Case, Chairman and CEO of Revolution, and DLD Co-Chairman Yossi Vardi for a comprehensive talk on entrepreneurship in a time of crisis. It’s hard enough to build a successful startup when times are good. But now? How will the Covid-19 pandemic impact entrepreneurs, investors and startup ecosystems around the world? Tuesday, 23rd June 11.00 am (EDT). Register here.

Cost Cutting - Israeli startups: Vintage Global-Startups-Sessions. Find how US, European and Israeli startups help corporations today in different areas of innovation. Jun 24, 2020 11:30 AM in Eastern Time. Register here.

Sports 2020: What About the Fans? Their topic for this edition of Connection to Innovation will focus on what it means to be a sports fan in 2020. It is clear that sports are coming back to the fans, but it is still unclear when and how the fans will come back to sports. While the social distancing persists, what will the experience look like? What cutting edge innovations will support the "new normal" fan experience? Wed, July 15, 2:00 PM. Register here.

Fusion LA: They're excited to announce a new Investment Fast-Track at Fusion LA: Three Weeks to get a $110,000 investment. Recipients of their investments will also join their accelerator program in the US, which includes connections with ~200 investors and partners across LA and Silicon Valley, free office space in LA* and a follow-on program (including workshops, networking events and business development services) that spans the company's activity in Israel and the US. Apply here.

 NYC Accelerate 2020: After working with hundreds of startups in NYC on their go-to-market strategies, the teams at SVB and Bowery Capital have found that there is always room for revenue generating operations to be optimized. As a result of this, they decided to put these lessons into one cohesive bootcamp to help pre-seed B2B companies get the revenue traction they need to raise seed and series A rounds. Apply here.

The Entrepreneurial Dream Project: A $100,000 non-dilutive grant fund and mentorship program benefiting new businesses that are building during COVID-19. Recipients will receive non-dilutive capital and coaching from the Supermaker Mentor Network, a dream team of 40+ business leaders from Mark Cuban to Rebecca Minkoff, with representation from companies including Unilever, Adidas, Harry's, and many more. Deadline June 15. Apply here.

8200 IMPACT: Founded by 8200 alumni in 2013, 8200 IMPACT is the first acceleration program in Israel for social technology (social impact) startups, that aim to solve significant social problems through technology in a wide spectrum of fields. This non-profit program was launched in order to harness the human capital of 8200 alumni for the benefit of society. The application season for 8200 Impact is extended until June 30th. Apply here.

Jonathan “Yoni” Frenkel has been involved in the New York-Israeli tech community for many years, mentoring startups on marketing, hosting events connecting investors with startups, and publishing on the topics of tech and venture regularly. Professionally, he heads a content marketing agency, YKC Media, focused on engaging millennials, Gen Z, and tech professionals through written content and social.