Personal blog of Yzmir Ramirez

InsightFinder, a startup from North Carolina based on 15 years of academic research, wants to bring machine learning to system monitoring to automatically identify and fix common issues. Today, the company announced a $2 million seed round.

?IDEA Fund Partners, a VC out of Durham, N.C.,? led the round, with participation from ?Eight Roads Ventures? and Acadia Woods Partners. The company was founded by North Carolina State University professor Helen Gu, who spent 15 years researching this problem before launching the startup in 2015.

Gu also announced that she had brought on former Distil Networks co-founder and CEO Rami Essaid to be chief operating officer. Essaid, who sold his company earlier this year, says his new company focuses on taking a proactive approach to application and infrastructure monitoring.

“We found that these problems happen to be repeatable, and the signals are there. We use artificial intelligence to predict and get out ahead of these issues,” he said. He adds that it’s about using technology to be proactive, and he says that today the software can prevent about half of the issues before they even become problems.

If you’re thinking that this sounds a lot like what Splunk, New Relic and Datadog are doing, you wouldn’t be wrong, but Essaid says that these products take a siloed look at one part of the company technology stack, whereas InsightFinder can act as a layer on top of these solutions to help companies reduce alert noise, track a problem when there are multiple alerts flashing and completely automate issue resolution when possible.

“It’s the only company that can actually take a lot of signals and use them to predict when something’s going to go bad. It doesn’t just help you reduce the alerts and help you find the problem faster, it actually takes all of that data and can crunch it using artificial intelligence to predict and prevent [problems], which nobody else right now is able to do,” Essaid said.

For now, the software is installed on-prem at its current set of customers, but the startup plans to create a SaaS version of the product in 2020 to make it accessible to more customers.

The company launched in 2015, and has been building out the product using a couple of National Science Foundation grants before this investment. Essaid says the product is in use today in 10 large companies (which he can’t name yet), but it doesn’t have any true go-to-market motion. The startup intends to use this investment to begin to develop that in 2020.

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 9am Pacific, you can subscribe here.

1. VMware completes $2.7 billion Pivotal acquisition

VMware is closing the year with a significant new weapon in its arsenal. (I restrained myself from using a “pivotal” pun here. You’re welcome.)

The acquisition — first announced in August — helps the company in its transformation from a pure virtual machine supplier into a cloud native vendor that can manage infrastructure wherever it lives. It fits alongside the acquisitions of Heptio and Bitnami, two other deals that closed this year.

2. Spotify to ‘pause’ running political ads, citing lack of proper review

The company told us that starting early next year, it will stop selling political ads: “At this point in time, we do not yet have the necessary level of robustness in our processes, systems and tools to responsibly validate and review this content.”

3. ‘The Mandalorian’ returns for Season 2 on Disney+ in fall 2020

The last episode of the first season of “The Mandalorian” went live on Disney+ on Friday, and showrunner Jon Favreau wasted very little time confirming when we can expect season two of the smash hit to land: next fall.

4. 2019 Africa Roundup: Jumia IPOs, China goes digital, Nigeria becomes fintech capital

The last 12 months served as a grande finale to 10 years that saw triple-digit increases in startup formation and VC on the continent. Here’s an overview of the 2019 market events that capped off a decade in African tech.

5. Maxar is selling space robotics company MDA for around $765 million

Maxar’s goal in selling the business is to help alleviate some of its considerable debt. The purchasing entity is a consortium of companies led by private investment firm Northern Private Capital, which will acquire the entirety of MDA’s Canadian operations — responsible for the development of the Canadarm and Canadarm2 robotic manipulators used on the Space Shuttle and the International Space Station, respectively.

6. Cloud gaming is the future of game monetization, not gameplay

Lucas Matney argues that as is so often the case with the next big thing in tech, cloud streaming is much more likely to become the next big feature of a more traditional platform, rather than the entire platform itself. (Extra Crunch membership required.)

7. This week’s TechCrunch podcasts

Equity took the week off, but we kept Original Content going with a review of Netflix’s new fantasy show “The Witcher.”

Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.

It’s the second to last day of 2019, meaning we’re very nearly out of time this year; our space for repretrospection is quickly coming to a close. Before we do run out of hours, however, I wanted to peek at some data that former Kleiner Perkins investor and Packagd founder Eric Feng recently compiled.

Feng dug into the changing ratio between enterprise-focused Seed deals and consumer-oriented Seed investments over the past decade or so, including 2019. The consumer-enterprise split, a loose divide that cleaves the startup world into two somewhat-neat buckets, has flipped. Feng’s data details a change in the majority, with startups selling to other companies raising more Seed deals than upstarts trying to build a customer base amongst folks like ourselves in 2019.

The change matters. As we continue to explore new unicorn creation (quick) and the pace of unicorn exits (comparatively slow), it’s also worth keeping an eye on the other end of the startup lifecycle. After all, what happens with Seed deals today will turn into changes to the unicorn market in years to come.

Let’s peek at a key chart from Feng, talk about Seed deal volume more generally, and close by positing a few reasons (only one of which is Snap’s IPO) as to why the market has changed as much as it has for the earliest stage of startup investing.

Changes

Feng’s piece, which you can read here, tracks the investment patterns of startup accelerator Y Combinator against its market. We care more about total deal volume, but I can’t recommend the dataset enough if you have the time.

Concerning the universe of Seed deals, here’s Feng’s key chart:

As you can see, the chart shows that in the pre-2008 era, Seed deals were amply skewed towards consumer-focused Seed investments. A new normal was found after the 2008 crisis, with just a smidge under 75% of Seed deals focused on selling to the masses for nearly a decade.

In 2016, however, a new trend emerged: a gradual decline in consumer Seed deals and a shift towards enterprise investments.

This became more pronounced in 2017, sharper in 2018, and by 2019 fewer than half of Seed deals focused on consumers. Now, more than half are targeting other companies as their future customer base. (Y Combinator, as Feng notes, got there first, making a majority of investments into enterprise startups since 2010, with just a few outlying classes.)

This flip comes as Seed deals sit at the 5,000-per-quarter mark. As Crunchbase News published as Q3 2019 ended, global Seed volume is strong:

So, we’re seeing a healthy number of deals as the consumer-enterprise ratio changes. This means that the change to more enterprise deals as a portion of all Seed investments isn’t predicated on their number holding steady while Seed deals dried up. Instead, enterprise deals are taking a rising share while volume appears healthy.

Now we get to the fun stuff; why is this happening?

Blame SaaS

As with many trends long in the making, there is no single reason why Seed investors have changed up their investing patterns. Instead, there are likely a myriad that added up to the eventual change. I’m going to ping a number of Seed investors this week to get some more input for us to chew on, but there are some obvious candidates that we can discuss today.

In no particular order, here are a few:

• Snap’s IPO: Snap went public in early 2017 at $17 per share. Its equity quickly spiked to into the high 20s. By July of that same year, Snap slipped under its IPO price. Its high-growth, high-spend model was under attack by both high costs and slim gross margins. Snap then went into a multi-year purgatory before returning to form — somewhat — in 2019. It’s not great for a category’s investment pace if one of its most prominent companies stumble very publicly, especially for Seed investors who make the riskiest bets in venture.

VMware is closing the year with a significant new component in its arsenal. Today it announced it has closed the $2.7 billion Pivotal acquisition it originally announced in August.

The acquisition gives VMware another component in its march to transform from a pure virtual machine company into a cloud native vendor that can manage infrastructure wherever it lives. It fits alongside other recent deals like buying Heptio and Bitnami, two other deals that closed this year.

They hope this all fits neatly into VMware Tanzu, which is designed to bring Kubernetes containers and VMware virtual machines together in a single management platform.

“VMware Tanzu is built upon our recognized infrastructure products and further expanded with the technologies that Pivotal, Heptio, Bitnami and many other VMware teams bring to this new portfolio of products and services,” Ray O’Farrell, executive vice president and general manager of the Modern Application Platforms Business Unit at VMware, wrote in a blog post announcing the deal had closed.

Craig McLuckie, who came over in the Heptio deal and is now VP of R&D at VMware, told TechCrunch in November at KubeCon that while the deal hadn’t closed at that point, he saw a future where Pivotal could help at a professional services level, as well.

“In the future when Pivotal is a part of this story, they won’t be just delivering technology, but also deep expertise to support application transformation initiatives,” he said.

Up until the closing, the company had been publicly traded on the New York Stock Exchange, but as of today, Pivotal becomes a wholly owned subsidiary of VMware. It’s important to note that this transaction didn’t happen in a vacuum, where two random companies came together.

In fact, VMware and Pivotal were part of the consortium of companies that Dell purchased when it acquired EMC in 2015 for $67 billion. While both were part of EMC and then Dell, each one operated separately and independently. At the time of the sale to Dell, Pivotal was considered a key piece, one that could stand strongly on its own.

Pivotal and VMware had another strong connection. Pivotal was originally created by a combination of EMC, VMware and GE (which owned a 10% stake for a time) to give these large organizations a separate company to undertake transformation initiatives.

It raised a hefty $1.7 billion before going public in 2018. A big chunk of that came in one heady day in 2016 when it announced $650 million in funding led by Ford’s $180 million investment.

The future looked bright at that point, but life as a public company was rough, and after a catastrophic June earnings report, things began to fall apart. The stock dropped 42% in one day. As I wrote in an analysis of the deal:

The stock price plunged from a high of $21.44 on May 30th to a low of $8.30 on August 14th. The company’s market cap plunged in that same time period falling from $5.828 billion on May 30th to $2.257 billion on August 14th. That’s when VMware admitted it was thinking about buying the struggling company.

VMware came to the rescue and offered $15.00 a share, a substantial premium above that August low point. As of today, it’s part of VMware.

In this episode, we talk about the importance of documentation and tools we use to create it.

www.talkingdrupal.com/229

Topics

• Stories
• What type of documentation do you need?
• What do you expect to be included in documentation
• Where and how

Resources

Discount tickets for DrupalCon

Hosts

Stephen Cross – www.stephencross.com @stephencross

John Picozzi – www.oomphinc.com @johnpicozzi

Nic Laflin – www.nLighteneddevelopment.com @nicxvan

 

 

Salesforce turned 20 this year, and the most successful pure enterprise SaaS company ever showed no signs of slowing down. Consider that the company finished the year on an $18 billion run rate, rushing toward its 2022 revenue goal of $20 billion. Oh, and it also spent a tidy $15.7 billion to buy Tableau this year in the most high-profile and expensive acquisition it’s ever made.

Co-founder, chairman and CEO Marc Benioff published a book called Trailblazer about running a socially responsible company, and made the rounds promoting it. In fact, he even stopped by TechCrunch Disrupt in San Francisco in September, telling the audience that capitalism as we know it is dead. Still, the company announced it was building two more towers in Sydney and Dublin.

It also promoted Bret Taylor earlier this month, who could be in line as heir apparent to Benioff and co-CEO Keith Block whenever they decide to retire. The company closed the year with a bang with a $4.5 billion quarter. Salesforce, for the most part, has somehow been able to balance Benioff’s vision of responsible capitalism while building a company makes money in bunches, one that continues to grow and flourish, and that’s showing no signs of slowing down anytime soon.

All aboard the gravy train

The company just keeps churning out good quarters. Here’s what this year looked like:

Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.

Today, something short. Continuing our loose collection of looks back of the past year, it’s worth remembering two related facts. First, that this time last year SaaS stocks were getting beat up. And, second, that in the ensuing year they’ve risen mightily.

If you are in a hurry, the gist of our point is that the recovery in value of SaaS stocks probably made a number of 2019 IPOs possible. And, given that SaaS shares have recovered well as a group, that the 2020 IPO season should be active as all heck, provided that things don’t change.

Let’s not forget how slack the public markets were a year ago for a startup category vital to venture capital returns.

Last year

We’re depending on Bessemer’s cloud index today, renamed the “BVP Nasdaq Emerging Cloud Index” when it was rebuilt in October. The Cloud Index is a collection of SaaS and cloud companies that are trackable as a unit, helping provide good data on the value of modern software and tooling concerns.

If the index rises, it’s generally good news for startups as it implies that investors are bidding up the value of SaaS companies as they grow; if the index falls, it implies that revenue multiples are contracting amongst the public comps of SaaS startups.*

Ultimately, startups want public companies that look like them (comps) to have sky-high revenue multiples (price/sales multiples, basically). That helps startups argue for a better valuation during their next round; or it helps them defend their current valuation as they grow.

Given that it’s Christmas Eve, I’m going to present you with a somewhat ugly chart. Today I can do no better. Please excuse the annotation fidelity as well:

In this episode, we talk about some recent Drupal news and how to deal with insecure modules

www.talkingdrupal.com/228

Topics

• Stories
• What happens when the Drupal Security Team marks a module as unsupported?
• How do you handle modules not covered by security team
• Field Slide Show

Resources

Acquia acquire AgilOne 

What happens when the Drupal Security Team marks a module as unsupported?

Field Slide Show

Hosts

Stephen Cross – www.stephencross.com @stephencross

John Picozzi – www.oomphinc.com @johnpicozzi

Nic Laflin – www.nLighteneddevelopment.com @nicxvan

 

 

F5 got an expensive holiday present today, snagging startup Shape Security for approximately $1 billion.

What the networking company gets with a shiny red ribbon is a security product that helps stop automated attacks like credential stuffing. In an article earlier this year, Shape CTO Shuman Ghosemajumder explained what the company does:

We’re an enterprise-focused company that protects the majority of large U.S. banks, the majority of the largest airlines, similar kinds of profiles with major retailers, hotel chains, government agencies and so on. We specifically protect them against automated fraud and abuse on their consumer-facing applications — their websites and their mobile apps.

F5 president and CEO François Locoh-Donou sees a way to protect his customers in a comprehensive way. “With Shape, we will deliver end-to-end application protection, which means revenue generating, brand-anchoring applications are protected from the point at which they are created through to the point where consumers interact with them—from code to customer,” Locoh-Donou said in a statement.

As for Shape, CEO Derek Smith said that it wasn’t a huge coincidence that F5 was the buyer, given his company was seeing F5 consistently in its customers. Now they can work together as a single platform.

Shape launched in 2011 and raised $183 million, according to Crunchbase data. Investors included Kleiner Perkins, Tomorrow Partners, Norwest Venture Partners, Baseline Ventures and C5 Capital. In its most recent round in September, the company raised $51 million on a valuation of $1 billion.

F5 has been in a spending mood this year. It also acquired NGINX in March for $670 million. NGINX is the commercial company behind the open-source web server of the same name. It’s worth noting that prior to that, F5 had not made an acquisition since 2014.

It was a big year in security M&A. Consider that in June, four security companies sold in one three-day period. That included Insight Partners buying Recorded Future for $780 million and FireEye buying Verodin for $250 million. Palo Alto Networks bought two companies in the period: Twistlock for $400 million and PureSec for between $60 and $70 million.

This deal is expected to close in mid-2020, and is of course, subject to standard regulatory approval. Upon closing Shape’s Smith will join the F5 management team and Shape employees will be folded into F5. The company will remain in its Santa Clara headquarters.

Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.

This week Kate was in SF, Alex was in Providence and there was a mountain of news to shovel through. If you’re here because we mentioned linking to a certain story in the show notes, that’s here. For everyone else, let’s get into the agenda.

We kicked off with a look at three new venture funds. In order:

• Tusk Ventures: Tusk’s new fund, worth $70 million, is an effective doubling of its prior fund’s $36 million size. The politically savvy firm has put money into Coinbase, and other companies that deal with regulated industries.
• Sapphire Ventures: SAP’s former corporate venture fund Sapphire Ventures announced a whopping $1.4 billion fundraise this week. Sapphire may be one of or the most successful CVC spinouts to date.
• Moxxie: Katie Jacobs Stanton, known for co-founding #ANGELS, just closed her debut fund on $25 million. Kate chatted with her about her experience fundraising her very own fund, some of her previous investment and her plans for Moxxie Ventures, so there was plenty to unpack here.

From there we turned to the gender imbalance in the world of venture capital. This year, companies founded by women raised only 2.8% of capital. These not-so-stellar statistics are always worth digging into.

We then took a quick look at two different venture rounds, including ProdPerfect’s $13 million Series A and Pepper’s smaller $5.6 million round. ProdPerfect’s round was led by Anthos Capital (known for investing in Honey, which sold for $4 billion). The company has $2 million in ARR and is growing quickly. Pepper, formed by former Snap denizens, is working to help other startups lower their CAC costs in-channel. Smart.

And finally, Alex wanted to bring up his series on startups that reach the $100 million ARR threshold (Extra Crunch membership required). A first piece looking into the idea led to a few more submissions. There seem to be enough companies to name the grouping with something nice. Centurion? Centipede? Centaur? We’re working on it.