2016 was a banner year for boldstart, and we could not have achieved any of this without the amazing support of our boldstart family and the founders who have given us the opportunity to invest in and partner with them.
Before diving into the standard year-end predictions on the enterprise, I thought I would share some data on our firm and our founding teams from 2016:
- we welcomed 9 new enterprise founding teams to the portfolio including Workrails (started by venture partner Jeff Leventhal), BigID, Hypr, Init.ai, and 5 stealth companies
- Thematically our new investments include 5 infrastructure/dev platforms, 3 security, and 2 SaaS; 4 are using some form of AI or machine learning; geographically 4 are in NYC, 3 Bay Area, 1 Canada, 1 Chicago
- 8 of our portfolio companies raised follow on Series A rounds with > $70mm raised and an average size of almost $9mm — announced rounds include Kustomer, Robin, Emissary, Replicated and Front — geographically 2 in NYC, 3 Bay Area, 1 Canada, 1 LA, 1 Chicago
- 4 of our portfolio companies raised Series B financings with close to $70mm raised and an average financing size greater than $17mm — announced rounds include security scorecard, handshake, and wevr — geographically 2 in NYC, 1 LA, 1 Canada
- fund iii had an oversubscribed closing of $47mm
Enterprise tech in 2017:
- We are pumped about the NYC enterprise tech ecosystem! When you have local Fortune 1000 IT execs who are looking to buy innovative technology combined with NYC enterprise startups and west coast VCs and founders building a presence here, you get an amazing recipe for a killer 2017.
- Fortune 1000 companies continue their slow but steady march to the cloud unlocking significant $$$. Yes, AWS and Azure will garner a bulk of this, but still requires significant new investment to easily monitor, manage and secure this sprawling infrastructure. Concurrent with this move will be microservices/container tech moving from dev environments to production and more $$$ spend being unlocked to support this transition. Abstraction layers and avoiding vendor lock-in are huge.
- Enterprise companies get more comfortable purchasing from startups. Many are already using open source (numbers range from 70–90% in certain tech stacks) and more and more Fortune 1000s are creating new positions like Chief Innovation Officer, Chief Digital Officer, etc., and we expect this trend to continue. Combining the bottom up, user-driven model with forward thinking IT execs has resulted in shortened enterprise sales cycles across our portfolio and some phenomenal reference customers.
- AI is table stakes for any enterprise app, not a separate market but weaved into every app from SaaS to infrastructure like CRM, BI, BPM, monitoring and security.
- Edge computing will come back — data everywhere — can’t do everything in cloud, edge computing and edge intelligence will reemerge — hybrid architecture with secure edge appliances to do analytics for any application where latency is mission critical from industrial (jet turbines, plants) to consumer facing like streaming video and all things between; we have a stealth investment here with more details to come in 2017.
- SaaS 3.0 — many of leading SaaS companies are 8–10 years old on archaic platforms, opportunity to rebuild with new stack from back-end to front-end and go after large incumbents (our pitch in 2016 and continues in 2017). SaaS 3.0 is adding an intelligent layer to this new platform. One area we are excited about is bringing back Business Process Management (BPM) in a lightweight way, DIY manner by leveraging AI and APIs. In addition, there will be opportunities to create new systems of record for emerging categories like data science and PII data.
- On-demand startups make deeper push into the enterprise as large companies augment their teams in areas like professional services, research, development, sales intelligence and more.
- Security will continue to remain white hot — new infrastructure = new attack vectors = new security approaches — areas we are keen on are securing open source at the dev level, managing security policies in enterprise for microservices architecture, IoT security, and biometrics. And let’s not forget about the ongoing rise of government sponsored attacks, a trend that will only proliferate in 2017.
Would love to hear your thoughts as well and here’s to a great 2017!
(published previously on Medium)