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London and Tel Aviv based VC firm 83North has closed out its fifth fund at $300 million, as we reported earlier. It last raised a $250 million fund in 2017 and expects to continue the same investment mix, while tracking developments in emerging areas like healthcare AI and autonomous vehicles.
In a conversation with general partner Laurel Bowden, the veteran investor shared a few further thoughts with Extra Crunch — talking about the tech scene in Europe vs Israel, what the firm looks for in a team and tips on scaling globally.
The interview has been lightly edited for clarity.
TechCrunch: Is Europe starting to catch up to Israel when it comes to deep tech startups?
Laurel Bowden: We clearly think we have in our portfolio some deep tech. And in other VC portfolios too — there’s clearly some deep tech [coming out of Europe]. And then on the reverse side you’ve seen more consumer-related stuff coming out of Israel. But still if you take a blanket look, we see more data infrastructure, security, storage coming out of Israel than we see in Europe — that’s for sure.
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83North has closed its fifth fund, completing an oversubscribed $300 million raise and bringing its total capital under management to $1.1BN+.
The VC firm, which spun out from Silicon Valley giant Greylock Partners in 2015 — and invests in startups in Europe and Israel, out of offices in London and Tel Aviv — last closed a $250M fourth fund back in 2017.
It invests in early and growth stage startups in consumer and enterprise sectors across a broad range of tech areas including fintech, data centre & cloud, enterprise software and marketplaces.
General partner Laurel Bowden, who leads the fund, says the latest close represents investment business as usual, with also no notable changes to the mix of LPs investing for this fifth close.
“As a fund we’re really focused on keeping our fund size down. We think that for just the investment opportunity in Europe and Israel… these are good sized funds to raise and then return and make good multiples on,” she tells TechCrunch. “If you go back in the history of our fundraising we’re always somewhere between $200M-$300M. And that’s the size we like to keep.”
“Of course we do think there’s great opportunities in Europe and Israel but not significantly different than we’ve thought over the last 15 years or so,” she adds.
83North has made around 70 investments to date — which means its five partners are usually making just one investment apiece per year.
The fund typically invests around $1M at the seed level; between $4M-$8M at the Series A level and up to $20M for Series B, with Bowden saying around a quarter of its investments go into seed (primarily into startups out of Israel); ~40% into Series A; and ~30% Series B.
“It’s somewhat evenly mixed between seed, Series A, Series B — but Series A is probably bigger than everything,” she adds.
It invests roughly half and half in its two regions of focus.
The firm has had 15 exits of portfolio companies (three of which it claims as unicorns). Recent multi-billion dollar exits for Bowden are: Just Eat, Hybris (acquired by SAP), iZettle (acquired by PayPal) and Qlik.
While 83North has a pretty broad investment canvas, it’s open to new areas — moving into IoT (with recent investments in Wiliot and VDOO), and also taking what it couches as a “growing interest” in healthtech and vertical SaaS.
“Some of my colleagues… are looking at areas like lidar, in-vehicle automation, looking at some of the drone technologies, looking at some even healthtech AI,” says Bowden. “We’ve looked at a couple of those in Europe as well. I’ve looked, actually, at some healthtech AI. I haven’t done anything but looked.
“And also all things related to data. Of course the market evolves and the technology evolves but we’ve done things related to BI to process automation through to just management of data ops, management of data. We always look at that area. And think we’ll carry on for a number of years. ”
“In venture you have to expand,” she adds. “You can’t just stay investing in exactly the same things but it’s more small additional add-ons as the market evolves, as opposed to fundamental shifts of investment thesis.”
Discussing startup valuations, Bowden says European startups are not insulated from wider investment dynamics that have been pushing startup valuations higher — and even, arguably, warping the market — as a consequence of more capital being raised generally (not only at the end of the pipe).
“Definitely valuations are getting pushed up,” she says. “Definitely things are getting more competitive but that comes back to exactly why we’re focused on raising smaller funds. Because we just think then we have less pressure to invest if we feel that valuations have got too high or there’s just a level… where startups just feel the inclination to raise way more money than they probably need — and that’s a big reason why we like to keep our fund size relatively small.”
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Apple has fixed a security flaw for a second time after it accidentally reintroduced an old bug in a recent software update.
Released Monday, iOS 12.4.1 contains a security fix that was first patched months earlier in iOS 12.3. Apple rolled out a fix in May, but accidentally undid the security patch in its latest update, iOS 12.4, in July.
In a brief security advisory published after the software’s release, Apple said it fixed a kernel vulnerability that could have allowed an attacker to execute code on an iPhone or iPad with the highest level of privileges.
Apple’s latest security advisory for iOS 12.4.1
Those privileges, also known as system or root privileges, can open up a device to running apps that are not normally allowed by Apple’s strict rules. Known as jailbreaking, apps can access parts of a device that are normally off-limits. On one hand that allows users to extensively customize their devices, but it can also expose the device to malicious software, like malware or spyware apps.
Spyware apps often rely on undisclosed jailbreak exploits to get access to a user’s messages, track their location and listen to their calls without their knowledge. Nation states are known to hire mobile spyware makers to remotely install malware on the devices of activists, dissidents and journalists. Washington Post journalist Jamal Khashoggi, who was murdered by agents of the Saudi regime, is believed to have been targeted by mobile spyware, according to reports. The company accused of supplying the spyware, Israel-based NSO Group, has denied any involvement.
Apple confirmed it pushed out a fix in its security notes, which included a short acknowledgement to Pwn20wnd, the team that confirmed last week that its jailbreak was working again.
The same kernel vulnerability was fixed in a supplemental update for macOS 10.14.6.
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Getting even the most well-organized team to agree on anything can be hard. Tel Aviv’s Ment.io, formerly known as Epistema, wants to make this process easier by applying smart design and a dose of machine learning to streamline the decision-making process.
Like with so many Israeli startups, Ment.io’s co-founders Joab Rosenberg and Tzvika Katzenelson got their start in Israel’s intelligence service. Indeed, Rosenberg spent 25 years in the intelligence service, where his final role was that of the deputy head analyst. “Our story starts from there, because we had the responsibility of gathering the knowledge of a thousand analysts, surrounded by tens of thousands of collection unit soldiers,” Katzenelson, who is Ment.io’s CRO, told me. He noted that the army had turned decision making into a form of art. But when the founders started looking at the tech industry, they found a very different approach to decision making — and one that they thought needed to change.
If there’s one thing the software industry has, it’s data and analytics. These days, the obvious thing to do with all of that information is to build machine learning models, but Katzenelson (rightly) argues that these models are essentially black boxes. “Data does not speak for itself. Correlations that you may find in the data are certainly not causations,” he said. “Every time you send analysts into the data, they will come up with some patterns that may mislead you.”
So Ment.io is trying to take a very different approach. It uses data and machine learning, but it starts with questions and people. The service actually measures the level of expertise and credibility every team member has around a given topic. “One of the crazy things we’re doing is that for every person, we’re creating their cognitive matrix. We’re able to tell you within the context of your organization how believable you are, how balanced you are, how clearly you are being perceived by your counterparts, because we are gathering all of your clarification requests and every time a person challenges you with something.”
At its core, Ment.io is basically an internal Q&A service. Anybody can pose questions and anybody can answer them with any data source or supporting argument they may have.
“We’re doing structuring,” Katzenelson explained. “And that’s basically our philosophy: knowledge is just arguments and counterarguments. And the more structure you can put in place, the more logic you can apply.”
In a sense, the company is doing this because natural language processing (NLP) technology isn’t yet able to understand the nuances of a discussion.
If you’re anything like me, though, the last thing you want is to have to use yet another SaaS product at work. The Ment.io team is quite aware of that and has built a deep integration with Slack already and is about to launch support for Microsoft Teams in the next few days, which doesn’t come as a surprise, given that the team has participated in the Microsoft ScaleUp accelerator program.
The overall idea here, Katzenelson explained, is to provide a kind of intelligence layer on top of tools like Slack and Teams that can capture a lot of the institutional knowledge that is now often shared in relatively ephemeral chats.
Ment.io is the first Israeli company to raise funding from Peter Thiel’s late-stage fund, as well as from the Slack Fund, which surely creates some interesting friction, given the company’s involvement with both Slack and Microsoft, but Katzenelson argues that this is not actually a problem.
Microsoft is also a current Ment.io customer, together with the likes of Intel, Citibank and Fiverr.
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At the beginning of 2019, Techstars Mobility turned into Techstars Detroit. At the time of the announcement, Managing Director Ted Serbinski penned “the word mobility was becoming too limiting. We knew we needed to reach a broader audience of entrepreneurs who may not label themselves as mobility but are great candidates for the program.”
I always called it Techstars Detroit anyway.
With Techstars Detroit, the program is looking for startups transforming the intersection of the physical and digital worlds that can leverage the strengths of Detroit to succeed. It’s a mouthful, but makes sense. Mobility is baked into Detroit, but Detroit is more than mobility.
Today the program took the wraps off the first class of startups under the new direction.
Techstars has operated in Detroit since 2015 and has been a critical partner in helping the city rebuild. Since its launch, Serbinski and the Techstars Mobility (now Detroit) mentors have helped bring talented engineers and founders to the city.
Serbinski summed up Detroit nicely for me, saying, “No longer is Detroit telling the world how to move. The world is telling Detroit how it wants to move.” He added the incoming class represents the new Detroit, with 60% international and 40% female founders.
Airspace Link (Detroit, MI)
Providing highways in the sky for safer drone operations.
Alpha Drive (New York, NY)
Platform for the validation of autonomous vehicle AI.
Le Car (Novi, MI)
An AI-powered personal car concierge that matches you to your perfect vehicle fit.
Octane (Fremont, CA)
Octane is a mobile app that connects car enthusiasts to automotive events and to each other out on the road.
PPAP Manager (Chihuahua, Mexico)
A platform to streamline the approval of packets of documents required in the automotive industry, known as PPAP, to validate production parts.
Ruksack (Toronto, Canada)
Connecting travelers with local travel experts to help them plan a perfect trip.
Soundtrack AI (Tel Aviv, Israel)
Acoustics-based and AI-enabled Predictive Maintenance Platform.
Teporto (Tel Aviv, Israel)
Teporto is enabling a new commute modality with its one-click smart platform for transportation companies that seamlessly adapts commuter service to commuters’ needs.
Unlimited Engineering (Barcelona, Spain)
Unlimited develops modular Light Electric Vehicles as a fun, cheap and convenient solution to last-mile trips that are overserved by cars and public transportation.
Zown (Toronto, Canada)
Open up your real estate property to the new mobility marketplace.
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Spacetech startup NSLComm is gearing up to put its first satellite into orbit, aboard a Russian Soyuz rocket launching this Friday at 1:42 AM ET. Not only is the launch a first for the company, but it’s also the first deployment of a new kind of satellite technology, an expandable antenna solution created by NSLComm which is the secret ingredient that will unlock a number of different lines of business for the fledgling Israeli startup.
“Satellite communication is too expensive,” explained NSLComm CEO and co-founder Raz Itzhaki in an interview. “And this is the case, because satellites are expensive. A communication satellite is basically a dish in space, you want more communication, you need a larger dish. But a larger dish requires a larger satellite, and a larger launcher, so everything becomes more expensive. This is why if you launch a geostationary communication satellite you have to launch it for 20 years, because it has an ROI of more than 10 years. It weighs tons because it needs to live for 15-20 years, and when you sell the capacity, you pay hundreds of billions per megabit per second per month, because you need to return the amount of investment in the satellite.”
What Raz and his team saw was that much of the size and weight for these high-powered communication satellites was actually due to the antennas they need to use to ensure they can achieve a good signal from space. These are either large and fixed, requiring a lot of extra launch hardware and protection as they make their way to space (which is not needed once in orbit), or, for unfolding antennas that existed previously, they require a lot of additional hardware to actually do the unfolding antenna deployment in space, adding again a bunch of bulk and weight. All of which translates to higher launch costs, the need for longer productive life spans for the satellites and higher costs for connectivity consumers.
NSLComm’s solution was to develop a new kind of antenna that can deploy on its own, without the help of any additional heavy machinery, and that can extend to the sizes needed to provide truly high-throughput connectivity on a satellite that’s small and much easier to launch, providing about 100 times faster connectivity than the fastest nano-satellites in the same size class today at about one-tenth the launch cost.
“Our approach was to develop an antenna based on SMP — that’s a shape memory polymer,” Itzhaki said. “This antenna is actually a 3D spring; it memorizes its shapes, it needs no opening mechanism, because the antenna itself is its own opening mechanism. So when you open a hatch, it jumps out like a jack-in-the-box. We have an antenna that is compacted to a volume that is so small, that it fits less than 1U [around the space of one rack in a multi-rack server configuration, or about 1.75 inches tall] for a 60 centimeter [about two feet] diameter dish. And the antenna weighs 140 grams. Well, this changes the economics of satellite communication.”
NSLComm intends to launch 30 satellites by 2021 and hundreds in total by 2023, but launching its own network is only one part of its business plan, and there are other ways it intends to generate revenue in the more immediate term. Itzhaki explained that, in fact, the startup has four primary ways of doing business, including first offering cost-effective ways for customer companies to build their constellations using the startup’s technology. Next, there’s a “turnkey” option for customers that can purchase satellite terminals and ground stations for specific use, including one client already who is using this for an IoT application. Itzhaki says there are already “many” of these types of arrangements in the pipeline.
Third, NSLComm intends to offer a “private constellation” offering, where, for example, a cruise ship operator could build, launch and operate its own network constellation for its customers at minimal cost. Finally, there’s a “constellation as a service” model, where NSLCom would launch the constellation itself, partner with an operator and sell the capacity of the network on a subscription basis.
To date, NSLComm has raised $16 million, including $12 million from VCs, including Jerusalem Venture Partners, OurCrowd, Cockpit Innovation and Liberty Technology Venture Capital. It’s also backed by the Israel Space Agency and the Office of the Chief Scientist in Israel, which provided the remaining $4 million in initial funding.
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Revenue-based financing is on the rise, at least according to Lighter Capital, a firm that doles out entrepreneur-friendly debt capital.
What exactly is RBF you ask? It’s a relatively new form of funding for tech companies that are posting monthly recurring revenue. Here’s how Lighter Capital, which completed 500 RBF deals in 2018, explains it: “It’s an alternative funding model that mixes some aspects of debt and equity. Most RBF is technically structured as a loan. However, RBF investors’ returns are tied directly to the startup’s performance, which is more like equity.”
Source: Lighter Capital
What’s the appeal? As I said, RBFs are essentially dressed up debt rounds. Founders who opt for RBFs as opposed to venture capital deals hold on to all their equity and they don’t get stuck on the VC hamster wheel, the process in which you are forced to continually accept VC while losing more and more equity as a means of pleasing your investors.
RBFs, however, are better than traditional debt rounds because the investors are more incentivized to help the companies they invest in because they are receiving a certain portion of that business’s monthly revenues, typically 1% to 9%. Eventually, as is explained thoroughly in Lighter Capital’s newest RBF report, monthly payments come to an end, usually 1.3 to 2.5X the amount of the original financing, a multiple referred to as the “cap.” Three to five years down the line, any unpaid amount of said cap is due back to the investor. When all is said in done, ideally, the startup has grown with the support of the capital and hasn’t lost any equity.
At this point, they could opt to raise additional revenue-based capital, they could turn to venture capital or they could tap a tech bank to help them get to the next step. The idea is RBF is easier on the founder and it allows them optionality, something that is often lost when companies turn to VCs.
IPO corner, rapid-fire edition
Slack’s direct listing will be on June 20th. Get excited.
China’s Luckin Coffee raised $650 million in upsized U.S. IPO
Crowdstrike, a cybersecurity unicorn, dropped its S-1.
Freelance marketplace Fiverr has filed to go public on the NYSE.

Plus, I had a long and comprehensive conversation with Zoom CEO Eric Yuan this week about the company’s closely watched IPO. You can read the full transcript here.
Silicon Valley entrepreneur Hosain Rahman, the man behind Jawbone, has managed to raise $65.4 million for his new company, according to an SEC filing. The paperwork, coincidentally or otherwise, was processed while most of the world’s attention was focused on Uber’s IPO. Jawbone, if you remember, produced wireless speakers and Bluetooth earpieces, and went kaput in 2017 after burning up $1 billion in venture funding over the course of 10 years. Ouch.
On the heels of enterprise startup UiPath raising at a $7 billion valuation, the startup’s biggest investor is announcing a new fund to double down on making more investments in Europe. VC firm Accel has closed a $575 million fund — money that it plans to use to back startups in Europe and Israel, investing primarily at the Series A stage in a range of between $5 million and $15 million, reports TechCrunch’s Ingrid Lunden. Plus, take a closer look at Contrary Capital. Part accelerator, part VC fund, Contrary writes small checks to student entrepreneurs and recent college dropouts.
Our paying subscribers are in for a treat this week. Our in-house venture capital expert Danny Crichton wrote down some thoughts on Uber and Lyft’s investment bankers. Here’s a snippet: “Startup CEOs heading to the public markets have a love/hate relationship with their investment bankers. On one hand, they are helpful in introducing a company to a wide range of asset managers who will hopefully hold their company’s stock for the long term, reducing price volatility and by extension, employee churn. On the other hand, they are flagrantly expensive, costing millions of dollars in underwriting fees and related expenses…”
Read the full story here and sign up for Extra Crunch here.
If you enjoy this newsletter, be sure to check out TechCrunch’s venture-focused podcast, Equity. In this week’s episode, available here, Crunchbase News editor-in-chief Alex Wilhelm and I chat about the notable venture rounds of the week, CrowdStrike’s IPO and more of this week’s headlines.
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Five years ago, Dynamic Yield was courting an investment from The New York Times as it looked to shift how publishers paywalled their content. Last month, Chicago-based fast food king McDonald’s bought the Israeli company for $300 million, a source told TechCrunch, with the purpose of rethinking how people order drive-thru chicken nuggets.
The pivot from courting the grey lady to the golden arches isn’t as drastic as it sounds. In a lot of ways, it’s the result of the company learning to say “no” to certain customers. At least, that’s what Bessemer’s Adam Fisher tells us.
The Exit is a new series at TechCrunch. It’s an exit interview of sorts with a VC who was in the right place at the right time but made the right call on an investment that paid off.
Fisher
Fisher was Dynamic Yield founder Liad Agmon’s first call when he started looking for funds from institutional investors. Bessemer bankrolled the bulk of a $1.7 million funding round which valued the startup at $5 million pre-money back in 2013. The firm ended up putting about $15 million into Dynamic Yield, which raised ~$85 million in total from backers including Marker Capital, Union Tech Ventures, Baidu and The New York Times.
Fisher and I chatted at length about the company’s challenging rise and how Israel’s tech scene is still being underestimated. Fisher has 11 years at Bessemer under his belt and 14 exits including Wix, Intucell, Ravello and Leaba.
The interview has been edited for length and clarity.
Lucas Matney: So, right off the bat, how exactly did this tool initially built for publishers end up becoming something that McDonalds wanted?
Adam Fisher: I mean, the story of Dynamic Yield is unique. Liad, the founder and CEO, he was an entrepreneur in residence in our Herzliya office back in 2011. I’d identified him earlier from his previous company, and I just said, ‘Well, that’s the kind of guy I’d love to work with.’ I didn’t like his previous company, but there was something about his charisma, his technology background, his youth, which I just felt like “Wow, he’s going to do something interesting.” And so when he sold his previous company, coincidentally to another Chicago based company called Sears, I invited him and I think he found it very flattering, so he joined us as an EIR.
And really only at the very end of his residence did he come up with this idea that would become Dynamic Yield. He came about it very much focused on the problem he saw with publishers being outwitted by ad buyers. He felt like all the big publishers really didn’t understand their digital businesses, didn’t understand their users, didn’t understand how performance ad buying was working, and he began to build a product that could dynamically optimize a publisher’s website to maximize revenue, hence the yield … the dynamic yield.
But very quickly, we told him, ‘That’s interesting, but we’re not sure how big that market is. And, you know it’s not always great to sell to those kind of weak customers. Sometimes they’re weak for a reason.’
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Infinity Augmented Reality, an Israeli startup, has been acquired by Alibaba, the companies announced this weekend. The deal’s terms were not disclosed. Alibaba and InfinityAR have had a strategic partnership since 2016, when Alibaba Group led InfinityAR’s Series C. Since then, the two have collaborated on augmented reality, computer vision and artificial intelligence projects.
Founded in 2013, the startup’s augmented glasses platform enables developers in a wide range of industries (retail, gaming, medical, etc.) to integrate AR into their apps. InfinityAR’s products include software for ODMs and OEMs and a SDK plug-in for 3D engines.
Alibaba’s foray into virtual reality started three years ago, when it invested in Magic Leap and then announced a new research lab in China to develop ways of incorporating virtual reality into its e-commerce platform.
InfinityAR’s research and development team will begin working out of Alibaba’s Israel Machine Laboratory, part of Alibaba DAMO Academy, the R&D initiative into which it is pouring $15 billion with the goal of eventually serving two billion customers and creating 100 million jobs by 2036. DAMO Academy collaborates with universities around the world, and Alibaba’s Israel Machine Laboratory has a partnership with Tel Aviv University focused on video analysis and machine learning.
In a press statement, the laboratory’s head, Lihi Zelnik-Manor, said “Alibaba is delighted to be working with InfinityAR as one team after three years of partnership. The talented team brings unique knowhow in sensor fusion, computer vision and navigation technologies. We look forward to exploring these leading technologies and offering additional benefits to customers, partners and developers.”
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Cars are now essentially computers on wheels — and like every computer, they are susceptible to attacks. It’s no surprise then that there’s a growing number of startups that are working to protect a car’s internal systems from these hacks, especially given that the market for automotive cybersecurity could be worth mor $900 billion by 2026.
One of these companies is Israel’s C2A Security, which offers an end-to-end security platform for vehicles, which today announced that it has raised a $6.5 million Series A funding round.
The round was led by Maniv Mobility, which previously invested in companies like Hailo, drive.ai and Turo, and ICV, which has invested in companies like Freightos and Vayyar. OurCrowd’s Labs/02 also participated in this round.
Like most companies at the Series A stage, C2A plans to use the new funding to grow its team, especially on the R&D side, and help support its customer base. Sadly, C2A does not currently talk about who its customers are.

The promise of C2A is that it offers a full suite of solutions to detect and mitigate attacks. The team behind the company has an impressive security pedigree, with the company’s CMO Nat Meron being an alumn of Israel’s Unit 8200 intelligence unit, for example. C2A founder and CEO Michael Dick previously co-founded NDS, a content security solution, which Cisco acquired for around $5 billion in 2012 (and then recently sold on to Permira, also for $5 billion).
“We are extremely proud to receive the support of such outstanding investors, who will bring tremendous value to the company,” said Dick. “Maniv’s expertise in autotech and strong network across the industry coupled with ICV’s rich experience in cybersecurity brings the perfect combination of skills to the table.”

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