June 2021

At present, we at Janvest are in the process of executing four new investments – the greatest number of concurrent investments the fund has made since its inception in 2011. While there is always risk that a deal will fall through prior to funding, we are confident that by early Q3 these companies will be a part of the Janvest LP IV portfolio. What makes it possible to do this number of deals in parallel is that the General Partners have acquired a good amount of familiarity with each of the four sectors in which these start-ups operate by looking at similar types of businesses in the past - businesses, which for one reason or another, didn’t make it through our diligence and approval process that involved in-depth research with market leaders, prospective customers, and initial design partners. This work allowed us to develop a thesis surrounding each space, which we monitored closely in our CRM and team collaboration tools so that it was just a matter of waiting until the right opportunities presented themselves to get to conviction quickly and be a first-mover on leading or co-leading these rounds. In preparation for those investment announcements in the coming months, we wanted to provide some additional color to these sectors and why we are excited about the upcoming portfolio additions.

Shift Left Security
As cyber attacks globally increase in both number and sophistication, enterprises are looking at new ways to try and head off attackers. According to leading cyber firm, Palo Alto Networks (NYSE: PANW), 76% of all network vulnerabilities come from applications. One way that security personnel are trying to close down those vulnerabilities is through a ‘Shift Left’ approach – that is, building cyber protections into application code as it is in the development process rather than deploying solutions retroactively. This approach is also incredibly attractive for companies transitioning to the Cloud where misconfigurations cost an estimated $5 trillion from 2018 to 2019 alone. To meet the market demand, a whole host of next gen ‘Shift Left’ cyber security companies have emerged and are reporting significant traction – many of these companies were born in Israel. Snyk, which was one of the first into this market, has raised more than $700 million in venture financing. Other companies such as Apiiro ($35 million raised in their first round), CyCode ($25 million raised), and Argon Security ($4 million seed round recently closed) are also showing meaningful growth. With a 30%+ CAGR and a market expected to reach $6 billion by 2023, the race is on to innovate and capture a meaningful piece of the pie. In looking at Development, Security, and Operations (DevSecOps) companies historically, we have found some of their propositions to be compelling; however, with the rise in popularity of this space, round sizes and valuations have exploded to unjustified levels. As a valuation disciplined fund, we must be mindful of pricing that puts unnecessary risk on a business and therefore have avoided making a bet in this space to date. In addition, we felt as though many of these companies were not addressing one of the biggest issues in DevSecOps which is developers who may or may not have appropriate access to mission critical code making changes and adjustments that affect the integrity of the application. Recently we came across a company with Israeli founders already in the U.S. – two in Atlanta and one in Boston – which are bringing to market what we believe to be the right solution – a Developer Access Security Broker (DASB). This DASB will automatically grant and revoke developer permissions while monitoring developer behavior to understand whether there is anomalous/suspicious activity and if unauthorized changes are being made to the code that would affect its integrity. This approach will also help enterprises strike the right balance between security, software production velocity, and budget.

Deal Access: The CEO of this company is an Atlanta-based Israeli tech executive with whom Janvest’s Atlanta-based Partner, Brian Rosenzweig, had developed a relationship over several years. This executive approached Janvest as the first VC conversation to get some advice on venture financing as he was leaving his current role to start a new ‘Shift Left’ security business.
Winning the Deal: Janvest was chosen as the lead seed investor over much larger, household name Israeli and American venture funds because of our pre-existing relationship with the team, our domain expertise in seed investing, and the quality advisory and meaningful attention that was given to this team in the courting phase – attention they need and want as first time entrepreneurs.

Democratizing ‘Voice’
Amazon, Apple, and Google have brought voice and speech recognition technology into homes and businesses around the world with applications in a wide array of industries including but not exclusive to eCommerce, healthcare, defense, retail, education, manufacturing, logistics, and media/entertainment. For this reason, the voice and speech recognition market is expected to grow to nearly $27 billion by 2028. The challenges in this space are three-fold:

1. Small to mid-size businesses do not have the resources or know-how to create a voice interface with their customers, thus excluding them from the market for the most part, save for integration with Amazon.

2. The current voice platforms in the market work well but have limited capacity for adding new skills and capabilities required by these individual businesses.

3. Each voice platform (Siri, Google, Alexa) requires bespoke development, which is costly and in short supply.

Over the last four or five years we’ve seen a number of companies trying to innovate in the voice space however they are all very expensive for users, require specialized technical acumen to develop, come with heavy integration that requires the cooperation of Amazon, Apple, and/or Google, and provide negligible value relative to the overall opportunity in this market.

This latest investment of ours is checking the boxes we wanted in a voice solution. The team’s vision is to create the ‘WordPress of Conversations’, or said in another way, bringing quick, easy, inexpensive, and highly functional ‘voice’ to global SMBs by providing a set of tools that enable businesses to tack on ‘voice’ to pre-existing software development efforts and do so in an automated and easily customizable manner. In addition, they aim to offer cross-platform capabilities that would work on Google, Amazon, and Apple without specialized development. And finally, the functionality they envision would allow for each SMB to roll out offerings unique to their respective businesses rather than trying to take a generalized ‘skill’ and make it work for them.

Deal Access: Janvest’s Tel Aviv-based Partner Dafna Winocur Biran had a pre-existing relationship with the CEO and CTO of this business. These entrepreneurs decided early on that they wanted to work with seed specialists from whom they could get the much needed advisory and therefore approached Dafna, and just a small group of other funds, with the opportunity to invest in their venture.
Winning the Deal: Both the founders of this business are high profile executives in Israel coming out of companies such as Microsoft and Wix. As such, many of the seed funds they approached, as well as a number of later stage investors in Israel that heard about their venture, wanted access to the round and the ability to lead or co-lead. Janvest was chosen as the co-lead because of our pre-existing relationship with the team, our knowledge in the ‘voice’ space, the transparency of our process, our ability to get to conviction quickly, and the feedback they got from our portfolio entrepreneurs on the value of working with Janvest.

Next Gen Recruitment
HR departments within mid-size to large enterprises have become increasingly reliant on technology to identify, qualify, attract and retain high value candidates to their organizations, which is why HR tech has become a $148 billion market. The tech these enterprises leverage include everything from job boards where they can reach large audiences of active job seekers to recruitment tools that can effectively manage the screening and hiring process. Despite the innovation, as well as the standardization and productization of all these HR technologies, the fact remains that each company leverages them differently – building their own recruitment operations in siloes, which tend to be massively inefficient. In addition, relative to other industries, the HR market is struggling with the limited availability of data, specifically as it pertains to job seekers. Other than static CVs, incomplete profiles created by recruiters, and what can be scraped off social media, enterprise HR departments are having a difficult time optimizing their hiring and talent retention. According to PWC’s 2020 HR Tech Survey, 43% of enterprises struggle with helping their employees maximize their full potential – a byproduct of employees being in the wrong position at the wrong point in their careers. As a result, nearly half of enterprise HR personnel are planning to invest in skills mapping and career pathing technologies over the next 12-24 months. This latest investment of ours is tying in the entire recruiting ecosystem – enterprise HR departments, headhunters, as well as both active and passive candidates (those looking and those not) – so as to be able to piece together new forms of unstructured and disparate data that can be uniquely processed as part of a next generation Career Path Analysis, Prediction, and Recommendation engine. The aim is to give enterprise recruiters the ability to maximize employee potential by boosting engagement, which in turn reduces churn and allows for easier and more effective succession planning.

Deal Access: Janvest’s New York-based Partner Daniel Frankenstein was approached by a well known Israeli Angel investor and start-up advisor as one of only 3-4 funds to see a new company founded by three extraordinarily successful serial entrepreneurs. These entrepreneurs wanted to work with a fund that specialized in seed stage investments in Israel, but which could offer some value in the U.S. as well.
Winning the Deal: Janvest was chosen as the co-lead investor because of our reputation in the market, the value we can offer in the U.S., and the personal and positive report we had developed with the team in the due diligence process.

Model Performance Monitoring
Machine Learning (ML) and Artificial Intelligence (AI) technologies are comprised of two components – the algorithm, which is essentially the code that ingests and processes data, and the model, which is the output or the result of that processing. The challenge in effectively deploying AI and ML solutions is that a lot can and does go wrong that negatively impacts their performance, which limits just how widely they can be used without extensive monitoring by specialized engineers. In fact, only 53% of AI and ML projects make it into production because of how difficult it is to create and manage production-grade AI and ML. To solve this problem there are two areas that enterprises are investing heavily in – Data Reliability, which supercharges the algorithms, and Model Performance Monitoring (MPM) designed to ensure the quality and integrity of the models or output. In the past we’ve looked at companies in both areas especially given the explosive growth in the AI infrastructure market, which is expected to reach more than $50 billion by 2025. Specifically, as it pertains to MPM, which is where we have seen the bulk of correlated deal flow in the past two years, we’ve found that the solutions attending to the challenge in the market are sub-optimal in that they are reactive in nature, extremely difficult to integrate, require the customer to dedicate valuable and expensive engineering resources for integration and remediation, and lack visibility into the ROI from the deployment of a monitoring solution. This latest investment of ours is taking a drastically different approach that will not only offer real-time and proactive flagging of model underperformance, but also automated remediation in addition to a light touch integration that starts to produce value within days, not months. This approach will also make it easier for mid-size enterprises that do not have the technical resources of a Fortune 500 corporation to leverage state-of-the-art MPM in order to get the most out of their Machine Learning and Artificial Intelligence-based solutions.

Deal Access: This company was introduced to Janvest by an entrepreneur and Angel investor in Israel who was previously part of a company that the fund declined to invest in several years back. Given the transparency of our process with that company and the relationship we had built with this entrepreneur, he returned to us with a compelling pre-seed investment opportunity which we are now leading.
Winning the Deal: Janvest was chosen by the company as the lead investor because of our pre-existing knowledge of the MPM market, our ability to quickly understand their differentiation and unique value proposition, the speed of our due diligence process, and the ability to support their efforts in the United States.