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Silicon Valley Investors Are Bonkers For European Startups

Index Ventures partner Danny Rimer always planned to move back to London from Silicon Valley. But when Rimer returned to England a year ago after seven years establishing Index’s U.S. foothold with stakes in companies like Dropbox, Etsy and Slack, he had company: investors from U.S. venture capital firms Benchmark, NEA and Sequoia were also appearing at startup dinners, leading deals and even looking to open offices.

“We’ve always been surprised at how our U.S. peers flew over Europe,” says the Canada-born and Switzerland-raised Rimer, 49, who opened Index’s London office in 2002. As a full-time European resident again, he debuts at No. 3 on the 2019 Midas List Europe, thanks to multi-national investments including Discord, Glossier, Farfetch and Squarespace. Rimer says he watched as investors flocked to pour money into India, China, and Latin American countries, instead. “A very successful Welshman talked about Europe being a museum,” says Rimer, alluding to billionaire investor Michael Moritz, the Sequoia partner and Google and Yahoo investor who moved from Wales to Silicon Valley decades ago. “Now his firm is all over the geo looking.”

More money is flowing into European tech than ever, and it’s increasingly coming from venture capital’s elite U.S. firms. European startups are likely to receive a record $34.3 billion in investments this year, according to investment firm Atomico, with 19% of funding rounds including an American firm, double the portion when Atomico started tracking in 2015. Those American investors will account for about $10 billion, or nearly one-third, of the total amount invested.

American interest in European companies isn’t new: Palo Alto, California-founded Accel opened a London office nearly twenty years ago, and other firms followed suit. But many retreated in subsequent economic down cycles, says Philippe Botteri, No. 6 on Midas List Europe. Botteri, a French citizen, started his venture career at Bessemer Venture Partners in San Francisco and joined Accel in London in 2011. The years leading up to the U.S. firms’ return witnessed a global economic crisis, while access to customers, engineering talent and programs like startup accelerator Y Combinator drove a host of European founders, such as Stripe’s Collison brothers, to relocate to the U.S. Considered a splintered market with regional regulations and languages, Europe faced a fresh hurdle with “Brexit,” when the United Kingdom voted in a 2016 referendum to leave the European Union, a process still ongoing. Its ruling body, the European Union, has made an anchor policy of challenging big tech companies on how they use data.

Blossom Capital founder Ophelia Brown says she was met with incredulity when, as a young investor at Index Ventures between 2012 and 2016, she visited West Coast counterparts and described the opportunity in European tech. “Everyone would push back: Europe was a little travel, a little ecommerce, a little gaming,” she says. “They felt there was nothing of substance.” In 2017, when she set out to raise Blossom’s first fund, many U.S. investors told her the opportunity for new firms seemed greater in the U.S. and China. Just two years later, Brown says she now hears from institutions asking how to get more exposure to Europe’s startup scene.

What’s changed: A mix of high-profile public offerings such as Adyen and Spotify and a maturing ecosystem that’s made it a much easier draw for U.S. firms, facing intense competition at home, to risk millions in Europe. Spotify, the Stockholm-based music streaming service that went public via direct listing in April 2018, and Adyen, the Amsterdam-based payments company that went public two months later, have created nearly $50 billion in combined market value. The IPOs of Criteo in Paris and Farfetch in London have also produced a network of millionaires primed to write “angel investor” personal checks into smaller tech companies. Today there are 99 unicorns, or companies valued at one billion dollars or more, compared to 22 in 2015, according to Atomico’s data.

“The question used to be, can Europe generate a $1 billion outcome, and then you had Spotify and Adyen creating tens of billions of market cap,” says Botteri, who notes that winners are also coming from a broader base of cities in Europe – 12 hubs, not all from London and Tel Aviv. (As on the Midas List Europe, European investors often include Israel’s tech-heavy startup scene.) “Now the question is, can Europe generate a $100 billion company? And my answer is, just give it a few years.”

For startups in far-flung places like Tallinn, Estonia, where Pipedrive was founded in 2010, or Bucharest, where UiPath got its start, the influx of U.S. venture capital counts for more than just money – it means access to former operators who helped scale businesses like Facebook, Google and Slack, introductions to customers in New York or executive hires in San Francisco. And with their stamps of approval comes buzz that can still kickstart a startup’s brand recognition, investors say.

But they also come with a risk: heightened pressure to deliver, board members who may be 5,000 miles away, and potentially overheated valuations that can prove onerous should a founder misstep. Sarah Noeckel, a London-based investor at Dawn Capital and the publisher of women-in-tech newsletter Femstreet, has tracked a number of recent seed-stage deals in which a U.S. investor swooped in with an offer too rich for local alternatives to match, for companies that sometimes haven’t sold anything yet. “I think there’s little validation at this point how it actually plays out for them,” she says.

For the U.S. investors, there’s a clear financial incentive to “swoop in.” On average over the past year, one dollar’s worth of equity in a European startup in a Series A funding round would have cost $1.60 in the U.S. for a comparable share, according to the Atomico report. Investors insist that for the most in-demand companies in Europe, such as London-based travel startup Duffel, which raised $30 million from Index Ventures in October, prices already match Silicon Valley highs.

All the more reason that as U.S. investors hunt in Europe like never before, they’re doing so quietly. Though Lightspeed Venture Partners announced its hiring of a London-based partner, Rytis Vitkauskas, in October, other U.S. firms have been on the ground without advertising it publicly. Leaders from NEA, with $20 billion in assets under management, passed through London in recent weeks on a venture capital tour as the firm plans to invest more heavily in Europe moving forward, sources say. Sequoia partners Matt Miller and Pat Grady, meanwhile, have been spotted around town meeting with potential job candidates. (Sequoia’s never employed a staffer in Europe before.) NEA and Sequoia declined to comment.

“Everyone would push back: Europe was a little travel, a little ecommerce, a little gaming. They felt there was nothing of substance.”

Blossom Capital founder Ophelia Brown

Many more U.S. investors now pass through London; some even stretch the meaning of what it means to visit a city through months-long stays. “I always used to have to travel to the West Coast to see friends that I made from the show,” says Harry Stebbings, who has interviewed hundreds of U.S. venture capitalists on his popular podcast, ‘The Twenty Minute VC.’ “Now, every week I can see three to five VCs in London visiting.” For the past several months, longtime Silicon Valley-based Accel partner Ping Li has lived in London with his family. Asked if he’d moved to the city without any public announcement, Li demurred – “I would argue that I’m spending a lot of time on British Airways,” he says – before insisting he plans to return to California in three to six months. “I don’t think you can actually be a top-tier venture capital firm without being global,” he says. Firms without plans for a permanent presence in London are creating buzz among local investors, too. Kleiner Perkins investors Mamoon Hamid and Ilya Fushman have been active in Europe recently, they confirm. Benchmark, the firm behind Snap and Uber, invested in Amsterdam-founded open-source software maker Elastic, which went public in 2018, and more recently London-based Duffel and design software maker Sketch, based in The Hague. “Europe’s just more in the spotlight now,” partner Chetan Puttagunta says.

Against the backdrop of Brexit, the inbound interest can feel like a surprise. London-based investors, however, appear to be shrugging off concerns and hoping for the best. “In and of itself, it means nothing,” says Index Ventures’ Martin Mignot, a French and British citizen investing in London and No. 7 on the Midas List Europe. “The only real question is around talent, whether it’s going to be more difficult for people to come and work in London, but how difficult that is remains to be seen.” Or as his colleague Rimer quips: “Having spent seven years in the U.S., I don’t exactly think the political climate of the U.S. was necessarily more welcoming.”

When Rimer attended the Slush conference, a tech conference of 25,000 in Helsinki in November, he brought along a guest: Dylan Field, the CEO of buzzy San Francisco-based design software maker Figma. If Field were European, Index would be leading him around Silicon Valley; instead, with 80% of Figma’s business outside of the U.S., Rimer wanted Field to experience the energy of Europe’s tech community first-hand. Explains Rimer: “It’s just a reflection of the reality today.”

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I’m an associate editor at Forbes covering venture capital, cloud and enterprise software out of New York. I edit the Midas List, Midas List Europe, Cloud 100 list and 30 Under 30 for VC. I’m a Fortune Magazine and WNYC alum. My tech focus would’ve perplexed my college self, as I studied medieval history and archaeology at Harvard University. Follow me on Twitter at @alexrkonrad and email me at akonrad@forbes.com. Securely share tips at https://www.forbes.com/tips/

Source: Silicon Valley Investors Are Bonkers For European Startups

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A interview with Venture Capitalist and Co-Founder of Andreessen Horowitz, Marc Andreessen In this interview, Marc discusses how Silicon Valley works and why it is so hard to replicate. Marc also talks about what he looks for in investments and gives advice to students. 📚 Marc Andreessen’s favourite books are located at the bottom of the description❗ Like if you enjoyed Subscribe for more:http://bit.ly/InvestorsArchive Follow us on twitter:http://bit.ly/TwitterIA Other great Venture Capitalists videos:⬇ Marc Andreessen: Venture Capital Investment Philosophy:http://bit.ly/MAndreessenVid1 Billionaire Chris Sacca on Investing, Venture Capital and Life:http://bit.ly/CSaccaVid1 Billionaire Peter Thiel on Entrepreneurship, Innovation and Competition: http://bit.ly/PTheilVid1 Video Segments: 0:00 Introduction 1:58 Something you really screwed up? 3:09 How does Silicon Valley work? 6:33 Why has Silicon Valley never been replicated? 10:24 Where does the value of cryptocurrency come from? 12:46 Is it going to disrupt governments? 14:26 What makes a fundable company? 19:23 What do you see in the future? 22:48 Advice to students? 24:52 How do you get rid of fear? Marc Andreessen’s Favourite Books🔥 Life: The Movie:http://bit.ly/LifeTheMovie Confessions of an Economic Hit Man:http://bit.ly/ConfessionsEconomic And the Money Kept Rolling In (and Out) Wall Street:http://bit.ly/MoneyKeptRolling Last Call:http://bit.ly/LastCallMA Startup Rising:http://bit.ly/Startuprising Interview Date: 29th March, 2018 Event: Udacity Original Image Source:http://bit.ly/MAndreessenPic1 Investors Archive has videos of all the Investing/Business/Economic/Finance masters. Learn from their wisdom for free in one place. For more check out the channel. Remember to subscribe, share, comment and like! No advertising.

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Measuring The Total Economic Impact Of Unified Endpoint Management

Today, the average IT organization is spending at least 5% of their organization’s annual revenue on IT investments – and the cost of each investment spans far beyond its price tag. Each one needs to be deployed and maintained by IT staff that is grappling with more tools and software products than ever before. Of course, supporting an IT staff comes with its own set of costs and challenges. CIOs, CTOs, and their teams are human resource scarce and spread extremely thin, so the opportunity cost of focusing on one tool versus another has never been greater.

This complexity comes at a time where clearly defined IT strategies that bring about positive impact to the business are non-negotiable. According to IDG’s 2019 State of the CIO report, “62% of CIOs say that the creation of new revenue generating initiatives is among their job responsibilities.” 88% claim to be “more involved in leading digital transformation initiatives compared to their business counterparts.” Net-net, the onus is on IT leaders to streamline efficiencies, reduce total cost of ownership (TCO), and net a return on investment (ROI) for the business.

IT investment decisions driven by real customer data

Forrester has been instrumental in helping business decision-makers overcome their resource, budget, and investment challenges by introducing a Total Economic Impact™ (TEI) methodology. Not only does the TEI take costs and benefits into account, but also the time saved and economic impact of strategic decisions made. Forrester’s TEI assessments are drawn from real client experiences with vendor products and services. The team diligently documents customer outcomes to better understand their positive or negative business impact. Consulting this unique research methodology helps business decision makers justify and future-proof their investments.

Making the transition to unified endpoint management

If your organization is like most, it has a mix of devices that employees use to get work done – whether they’re corporate-liable or supported under a bring your own device (BYOD) program. With 464 custom apps deployed across the average enterprise, procuring a means to manage devices and everything on them (not just apps, but also content and data) has become mission-critical for businesses.

Traditionally, mobile device management (MDM), enterprise mobility management (EMM), and client management tools (CMTs) have been relied upon to get the job done. However, business use cases for devices have become more complex and wide ranging. These shifts are necessitating a tool that makes it possible to manage everything from one place. This is unified endpoint management (UEM).

Commissioned by IBM, Forrester Consulting recently conducted a TEI analysis of IBM Security MaaS360 UEM customers to determine whether they are reducing TCO and netting a quick break-even on their investment. The Forrester team took the time to glean feedback from 19 MaaS360 UEM clients representing financial services, nonprofit, utilities, manufacturing, and professional services industries. These individuals are responsible for managing anywhere from 500 to 100,000 devices for their respective businesses each day.

How UEM from IBM resulted in significant ROI1

Across the 19 clients that were interviewed, Forrester identified the following key benefits. These amount to a three-year 160% ROI and payback in less than 3 months:

  • Endpoint configuration: a 96% reduction in time spend provisioning devices
  • End-user setup: a 47% reduction in time spent getting employees up and running
  • Modern management: $22,960 saved from simplifying their management approach
  • Support ticket remediation: 50% fewer tickets and 55% less time taken to resolve them
  • Security breach remediation: 80% reduction in number of incidents experienced

Of course, these benefits were experienced by a composite organization used to represent the 19 customers surveyed by Forrester. Organizations considering UEM that are actively seeking their own customized TEI assessment can now work with IBMers to do just that. Request your own complementary assessment today to understand whether you can expect a return on your UEM investment, and if so, how quickly you can expect your payback period to arrive.

Request a custom Forrester TEI assessment now

1 The Total Economic Impact™ Of IBM MaaS360 With Watson, a commissioned study conducted by Forrester Consulting, April 2019

John Harrington is a Program Director at IBM Security, overseeing product marketing for data security and unified endpoint management (UEM). In this capacity, he works with product managers, product marketers, and account managers to provide guidance for businesses encountering modern cybersecurity challenges. He’s focused on helping clients learn how to establish digital trust and the various ways Guardium and MaaS360 can help them keep their data and endpoints protected. John is also working towards an MBA graduate degree at Villanova School of Business, and spends his spare time exploring the city of Philadelphia with his wife and their two beagles.

Source: IBM Security BrandVoice: Measuring The Total Economic Impact Of Unified Endpoint Management

Last Week Confirms It. Goodbye, Recession – Hello, Bull Market

 

It is time to get excited, optimistic and bullish. Last week put the final nails in the “Oh, woe is me” recession coffin. RIP.

Last week’s good news supported and confirmed recent anti-negative and pro-positive improvements. Here is the wonderful list:

Earnings reports are driving a shift to the positive

Compare these two headlines from The Wall Street Journal:

  • October 9: “U.S. Earnings Flash a Worrying Signal”
  • November 2: “Earnings Tide Lifts Most Stocks – Investors are getting a more positive picture of American corporations’ health than that painted by analysts in buildup to earnings season”
Today In: Money

The cause? Earnings reports continue to be positive on balance, with most of the September quarter-end earnings reports now in. The 336 S&P 500 companies reporting September results so far (from October 15 through November 1) represent 67% of the 500 companies and 75% of the $27T market capitalization. (Many of the remaining 164 companies will report October or November quarter-end results later.)

While reports of companies beating expectations are widespread, a good way to view investors’ complete evaluation is by examining stock performance. Below is a graph of the one-month returns (including dividend income) for all of the 336 reporting companies. I have broken out the so-called “safe” stocks (REITs and utilities) because they have been beneficiaries of both reduced interest rates and bearish thinking – therefore, expect them to underperform.

Clearly, Wall Street views this earnings report season as favorable. Additionally, the need and desire for “safe” stocks has given way to the pursuit of growth.

The Federal Reserve cuts and quits

Finally! While rates remain abnormally low (meaning there is music to be faced in the future), at least the game of will-they-or-won’t-they looks over for now. That is helpful because businesses, consumers and investors now can make decisions based on a stable rate environment.

GDP growth is just fine

A good example of how negativity can take time to turn positive is the last week’s third quarter GDP growth report. Expectations had been for a seasonally adjusted, real (adjusted for inflation), annualized rate of 1.6%, down from 2% last quarter. Instead, it came in at 1.9%. That is good news, but most reports focused on the “continued slowing” instead of the desirable surprise.

Think of that report this way. For a quarter that had its problems, growth was still around 2%, in line with the average post-recession growth rate. Looking at a longer time period provides a good perspective for that 1.9% growth rate.

Employment and consumer spending are good

The recession pundits keep expecting these shoes to drop, but they do not. The problem is the factors leading up to reduced employment are absent. Following, so long as consumers are employed, they will spend. Therefore, in spite of that previous sharp drop in consumer confidence, consumer spending has remained strong and consumer confidence has improved.

The Wall Street Journal’s November 2 lead story (print edition) says it best: “Jobs, Consumers Buoy Economy, Defying Slowdown Across Globe.”

The bottom line

Last week offered an outstanding combination of good news that removes recession pessimism and reintroduces growth optimism for 2020. Stock ownership (excluding “safe” stocks) continues to look desirable.

Follow me on Twitter or LinkedIn.

During my 30-year career, I managed and consulted to multi-billion dollar funds. Using the “multi-manager” approach, I worked with leading investment managers. I now manage personal accounts and write about my analysis and decisions. … From my 50-year personal/professional investment experience, I developed the skills I use to find opportunities and avoid risks. Because markets are ever changing, I choose the strategies (safety, income, value and growth) that conditions warrant. … My one regular activity is to seek developments and trends being ignored or misinterpreted by investors. These are the situations that consistently produce higher return opportunities (or higher risk levels). … I am a CFA charterholder with an MBA from Stanford Graduate School of Business and a BS in Finance from San Diego State University. I am a former Washington DC CFA board member and currently serve on the AAUW Investment Advisers Committee and the City of Vista Investment Advisory Committee. … For more, please see my LinkedIn bio at http://www.linkedin.com/in/johntobeycfa

Source: Last Week Confirms It. Goodbye, Recession – Hello, Bull Market

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Traders Jon and Pete Najarian are joined by Sarat Sethi, managing partner at Douglas C. Lane & Associates, and Anastasia Amoroso, global investment strategist at J.P. Morgan Private Bank, to discuss calls on Netflix, Apple and Juniper Networks.

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