SentinelOne is a cybersecurity startup formed by an elite team of cybersecurity engineers and defense experts that joined forces to reinvent endpoint protection. With decades of collective experience, SentinelOne founders honed their expertise while working for Intel, McAfee, Checkpoint, IBM, and elite units in the Israel Defense Forces. They came together in 2013 to build a new security architecture that could defeat today’s advanced threats and nation state malware.
Building A Big Company From Day One
Our founding team has always had a vision to build a big company from day one. We had a novel approach to cyber security and developed a method that could protect data from the most intense threats. We knew from the start we wanted to market our solution to the biggest enterprise companies with the greatest security challenges. We were looking at various ways to get to the US market as soon as possible. When we connected with UpWest, it was an instant fit.
Exploring The Silicon Valley Ecosystem
It is always challenging to break into a new environment, but we knew that we needed to build our own network in Silicon Valley. Whether it was a question of building a better product or how to approach market influencers, UpWest was there for us to facilitate the initial connections and point us the the right direction. Then it was in our hands to take it and amplify to create our own strong ties in the valley ecosystem.
A Hustler’s Mentality And A Hacker’s Approach
Even before you raise funds and set up operations, you need to see if you can bring your product to market. One of the major questions we asked was whether our product could perform the way we envisioned it in the US market. While members on our team had already run and sold successful startups, finding big customers in the US was not viable from Israel. We could have stayed in Israel to raise funds and get initial customers, but we knew it was critical to our success to first get to our target audience. It was important that we speak to as many potential customers as we could to address their major concern and understand our potential – and do this sooner rather than later. We knew it was critical to verify and learn before we started architecturing our solution to build a better product suited to large US customers and could have only done that in the US market.
Disrupting An Industry
We built a product that is highly differentiated and cutting-edge and is trying to disrupt a market which has been stagnant for 20 years. To do so, we have teams in Israel and the US. It’s not easy, but having a strong product and presence in the US and having the best R&D team in Israel helps maintain our competitive advantage.
Company Culture And Community
The UpWest community is still a part of our company culture. Whenever we have a certain goal, whether it’s reaching a specific person, or getting into a strategic event, our team never hesitates to leverage our network and industry mentors for guidance. From business consideration to funding options, we can always benefit from bringing in an outside perspective. The UpWest community is like a family. It becomes part of your life.
HoneyBook is an event vendors platform established in 2013 by four friends who shared the pain of planning their major life events. As newlyweds, they found themselves collecting and signing countless contracts, managing emails and phone calls from upwards of 50 vendors each, and worst of all, writing paper checks (yes, they still make those). Determined to find a better way, the four co-founders — Oz, Shadiah, Naama and Dror—met with hundreds of creative businesses and their clients. Shortly after, HoneyBook was born and has quickly gained traction in the events industry by revolutionizing the way event pros run their business.
Love At First Sight
We (Naama and Oz) were dating from childhood and from an early age loved throwing events. When we got married, the wedding process showed us what a broken and outdated industry event planning was. We felt the planning experience was fragmented and full of friction. We wanted to solve this problem for others who were experiencing the same problem, so we built a great tool that fit the needs of the American industry.
Take It To The States
We were just starting to raise money, when we met with Gil in a coffee shop. We explained our plan to bring our product to Australia. Even though it was positioned for the US audience, we didn’t think we could start there. After meeting with Gil, we realized we should start in the American market. It seems ridiculous now that we had ever considered any other plan. Gil and his partners invited us to hop on a plane and come to UpWest and the rest is history.
Building A Big Company From Day One
In Silicon Valley, we started seeing huge companies around us that opened our eyes to what we should aspire to. We met other entrepreneurs that wanted to big build companies, making it clear that we could dream much bigger than we had originally planned. Houzz, for example, was a company who paved the way for our aspirations to build something meaningful. The other crucial aspect of being in Silicon Valley was meeting potential customers. One customer, a photographer, pointed out to us that our user interface was still in military time – showing 16:00 instead of 4pm. It was something simple and small but it affected our customers. Our main goal was always to build a great product while placing value on the customer relationships we were creating.
Company Culture & Customer Care
From day zero, we were already thinking about company culture and how to build a successful company based in Silicon Valley. Being in Silicon Valley exposed us to thinking about what type of company we wanted to build. Early on, we developed a passion to help all customers and showcase ourselves as a company with great support. It was essential for us to always care for our community.
An Expanding Vision
Today, we are headquartered in San Francisco with offices in Tel Aviv. We serve creative businesses in the events industry and are hyper focused on the event workflow for our customers. We want to be the leading place for creative businesses to go for their work collaboration. When we accomplish our vision, HoneyBook will enable an entire industry to operate seamlessly on our platform.
Building Valuable Networks
From the beginning of our partnership with UpWest, two important networks were being developed. First, with all the mentors, customers, and investors with whom we have maintained close relationships. The second network is no less important; the portfolio community. This network continues to grow over time as each new portfolio company goes through the same process and similar growth experiences. Being part of the UpWest community, and having that crucial support ecosystem, is like having siblings versus being an only child.
The Keywee team calls on their unique backgrounds in natural-language processing and Big Data to solve a rapid-growing pain for publishers and content marketers: finding the audiences most likely to act in accordance with specific business goals and crafting better-performing content for those audiences.
Not Just Content
We help hundreds of publishers and brands use data to create better content and find audiences for the content they are creating. Our team’s unique background combines software engineering as well as understanding text and language, which sets us apart from our competitors. When we started Keywee, we had the core idea and vision with a basic challenge to solve: how to better use data to match content effectively, and how to create content using that data.
The Fast And The Furious
UpWest was instrumental in helping us successfully test our initial prototype, which evolved once we better understood our market and customers. The team encouraged us to get closer to customers and industry experts that would help us reach our understanding of the market faster. We secured four pilots in the US that we could never have gotten in Israel. Without this support, we would have wasted months and exhausted ourselves working on the wrong product for the wrong reasons. Even for a company already in the US, this kind of network helps you move much faster. Speed is the most important thing for a startup.
First Time Entrepreneurs
We were first time entrepreneurs when we started KeyWee and we quickly recognized that there are so many lessons to be learned from other people and their prior experience in startups. We began to internalize these lessons at UpWest, in Silicon Valley, which is the best source of knowledge for teaching a startup to tell their story, fundraise, and track metrics. No matter how smart you are, these insights can only truly be gained by working with people who have been in this environment for an extended period of time.
A Connected Community
We are still very connected to the UpWest team. I don’t think that relationship goes away, which is a huge asset to have for a startup. We have offices in New York City, but UpWest continues to provide critical advice and connections. Being a part of the UpWest community has been a great advantage for our company and instrumental for our growth.
The Most Valuable Network
We came to UpWest without any US network. After the first four months, we had a robust network of mentors, advisors and investors. We met two members of our advisory board through UpWest. All of our investors came through the UpWest network. All of them. Today, we are growing faster than ever.
CyberX delivers the only industrial cybersecurity platform built by blue-team military cyber-experts with nation-state expertise defending critical infrastructure
Gil Ben-Artzy, partner at UpWest was recently featured in HaShavua, the most popular podcast in the Israeli tech community. UpWest is a Silicon Valley early-stage investor in Israeli startups looking to build large global companies based in the US. As a seasoned investor who has evaluated thousands of startups from a variety of domains, Gil participated in an “Ask Me Anything” with the HaShavua community on Facebook. Below you can find the highlights of the podcast Q&A. Here’s a link to the entire recording (Hebrew).
What do you think are the most important factors for an Israeli startup to raise funding in the US?
I think that a few factors come to play: (1) You need to be doing something that has a chance of being HUGE. VC economics mandate that any startup investment must have the potential to return the fund — and fund sizes are typically quite large in the US. (2) You need to be in the US. Early stage investing is a local business, and investors typically want the CEO next to them — often, before they even consider investing. (It’s ok for the tech team to remain in Israel, even preferable in most cases). (3) You need to have US-based proof. i.e., customers / users, which indicates potential for product-market fit. Israel-based validation most likely will not be enough.
What is a typical cycle time to close a round of funding?
Always plan for 3–4 months AFTER you are ready. i.e., you have the fundraising materials ready, you practiced for days, made a list of your target investors, and then the clock starts. Important: try and raise between Feb-June and Sept-Nov; other times of the year are relatively quiet.
Can you briefly explain the processes of your work — from meeting the entrepreneur, to seed to investing, as well as your US presence?
We like to meet with companies as early as possible in their life cycle — even if they’re “too early” to come to UpWest (in my opinion, there’s no such thing as too early.) Seeing the entrepreneurs learn and grow over the course of multiple interactions is one of the best forms of validation. Regarding logistics, we like to start with an in-person meeting or phone call with someone from our team. It’s always helpful to get an introduction from someone we know, especially entrepreneurs we have invested in or investors we have co-invested with. Once the entrepreneurs come to UpWest, the initial relationship is focused on optimizing for momentum with customers and partners, and to some extent on building relationships with investors. Then, our operations are set in a way in which we can effectively help our startups for years after our initial investment; we only take 10–12 teams a year, because we want to have the capacity to support our startups in the long term.
I assume that you’re meeting and following vast amounts of both Israeli and American entrepreneurs. Do they have differences? If so, what are the key differences?
At a high level — yes, there are some differences, but none that should prevent Israel entrepreneurs from succeeding. I think US-based entrepreneurs are often better in presenting their ideas in a succinct and appealing way — “Show & Tell” from first grade sort of helps that 🙂 From my experience, Israelis are more resilient at times. Both of these are quite generalized observations. Regardless, smart Israeli founders can adapt quickly and become just as articulate as their American counterparts — I’ve seen it happen!
What is the biggest mistake that Israeli entrepreneurs make when entering the US market?
The short version: coming too late, leaving too early. I mean, they often come to the US only when the product is in advanced stages and discover that the customer wants something else — hard (and expensive) to undo what you have already built. Then, they sometimes only arrive for a week or two at a time, which is often not enough to really gain an understanding and momentum.
Can you name a few of the most active VCs right now in the valley? Also — are there individuals in the valley that one ‘must know’?
There are MANY active VCs in the valley. It really depends on the domain you are in. Some are strong across the board, some are stronger in specific domains. Also, it varies by Partner, not just fund. Same for the individual partners, it depends on your domain and what you are hoping to accomplish.
Is having an MVP that performed amazingly well in Israel, enough to raise a great funding round in the US?
The short answer: unfortunately not. The reasons: (1) US customers may have different requirements. You’ll be surprised how many times I have seen companies do well in Israel, only to discover that the US market behaves differently (e.g., pricing, needs, feature requests, etc.) (2) US investors do not know your Israeli customers, hence will not give them high points as references. So, getting to market ASAP is really the best — and often only — form of validation. Product-Market fit is achieved when the Product and the Market are in the same place.
Are there any legal challenges that Israeli startups face when they recruit from American investors? If so, what do you think is the best way to deal with them?
We often hear from US investors that because they are not experts in Israeli law, they highly prefer to invest in US (Delaware) entities. This may seem trivial, but it does matter to them. Many US VCs have opened offices in Israel and are ok with Israel-registered companies; however, I believe that the vast majority of US-based investors invest only in US-registered companies. If you are registered in Israel, no need to “flip” just yet — just be ready to answer that request if/when it arrives from your potential US-based investor.
Is it more effective for our team to take money from Angels that are recognized in our industry before our product works, or should our team focus on building our product further? Does receiving an investment help promote our product, and thus make it worthwhile to pursue fundraising even though we might not be 100% ready for the investment?
I think that bringing on the right investor early can be very valuable for your business. Not only can that person help you think through business questions you may have, but they should be able to open more customer doors, help you in future rounds, etc. Remember, in a way, you are “marrying” this investor, so make sure to feel that it’s a really good fit.
Can you tell us what are the verticals you’re looking into?
We are a highly diverse fund, and have typically invested in B2B, B2C, both software and hardware (any drone companies out there?) We focus on large market opportunities, hence invested in HoneyBook (events), BuildUp (construction), SentinelOne (endpoint security), and others looking to disrupt big markets. We are also looking at emerging markets — AR/VR being the latest top-of-mind area for us. Healthcare IT also a great area we look at, and startups leveraging AI, deep learning, and some of the more advanced tech out there. We don’t limit the verticals, as the right founder targeting the right vertical for them, is really a huge consideration for us (i.e., “Team-Market” fit).
From your experience, what are the assets of Israeli entrepreneurs in front of US customers and investors?
I think that Israelis come across as strong technologists, persistent and passionate – all strong traits that really can help you sell to investors and customers.
What are the hottest trends in the startup ecosystem of 2016 that you have noticed so far?
AR/VR, Autonomous Cars, Drones, IoT (depends what exactly), Fintech (though may be a bit slower than originally predicted), DevOps, Insurance (though getting a bit crowded).
Relocating to the US can be difficult for Israeli entrepreneurs. Some common problems are difficulties in the transition to another location, distance from family, among others. Can you speak to these challenges?
I think that it often surprises people how hard it is to make the move. The main difficulty is less language, culture, etc. — although those are real challenges, people expect and can prepare. I think that the #1 challenge is that no one knows who you are, and that all the Israeli “badges” you collected in your life — 8200, Technion, VP in Hot Israeli Startup X, who you know in the Israeli community, etc all mean much less in the US. Suddenly, your virtual business card is thinner, and you have less credibility. Don’t get me wrong, Israelis bring a ton to the table and they are highly valued and appreciated. However, less doors open based on who you know and your previous accomplishments — which is what Israeli entrepreneurs are used to when doing business mainly in Israel.
When is the next batch at UpWest due to start? Are startups that address both the US and Asian markets relevant to you?
We invest in startups year-round, but make most of our investments in Dec-Feb and in June-Aug. This way, the startups can come to UpWest for 3–4 months of an uninterrupted sprint, followed by years of our ongoing support, leveraging the community we have built in the US. Our startups aim to be global companies, and begin by targeting to the US market. It only makes sense they would want to target Asia at some point, but my advice is to pick one to start in. It is hard enough to succeed in one region, close to impossible to win in Asia and the US at the same time.
A few questions: Can you please share a bit about a typical ‘funnel to funding’ process for an UpWest participant? I am trying to get a ‘bottom up’ sense of a typical process or some sample use cases. To clarify — let’s say “StartUp X” is selected by UpWest as an investment candidate. When will they typically start to meet follow-on investors? From your experience, do your investments usually move toward follow-on investments with US investors, or Israeli ones? What are your typical follow-on investment sizes? (Is it usually pre/post/or A) Will they usually close the follow-on investment during the in the initial 3 months or after 6+ months?
The short version: Come to UpWest if you want to build a large global business, are “in it” for the long-term, and don’t expect to raise quickly. Over 70% of our companies raise seed rounds that average $1.5–2M. However, it takes time to prepare the company and find the right investor. We tell our startups to have a runway of 9–12 months after our initial investment, as they will need to gain some momentum in the US market and for US investors to get to know them before real discussions can happen. As for post-seed, Series A rounds typically are $8–15M in size. In general, US valuations are higher than Israeli ones, but that’s not the reason to add US investors to your Israeli investors (a combination is often a great idea) — the reason to bring them is that they can open doors to customers that otherwise would take you ages to acquire.
Comments Off on Our Companies Are Hiring: UpWest Portfolio Job Board
If you’re on the job market or have talented friends who are seeking exciting jobs in tech, look no further! Welcome to the UpWest Portfolio Job Board. If you are interested in any of the positions listed below, please feel free to reach out directly to the company using the contact information provided below.
Comments Off on 2015 – A Banner Year for Growing UpWest Startups
When we founded UpWest in 2012 and launched our fund to invest in seed-stage startups, we knew that this would be a long-term journey. We believed that despite the high risk — and the guarantee that we would make mistakes — we could play a significant role in helping our startups grow and scale within their market.
As we evolved, the real litmus test to measure our effectiveness became whether we could continue to support our companies after the initial hands-on phase. Could we help them scale into their market, acquire new customers, hire the right talent, and achieve full momentum in the US?
As I reflect on the past four years, it is clear that 2015 was a defining year for UpWest and our companies. Our portfolio community grew to over 50 companies, including 11 new investments. We are conscientious of our role as the most active US-based fund investing in Israeli startups.
Many of our companies have relocated their HQ to the US, and in 2015 we saw KeyWee and Apester open offices in New York, and Buildup, Mobilize and uMake setting up their business operations in San Francisco.
Additionally, this year saw phenomenal growth in the amount of capital invested in our portfolio companies, with close to $100M in follow-on funding in 2015 alone. This includes six of our companies that raised Series A financing rounds, and two more — SentinelOne and HoneyBook — that closed Series B rounds.
However, even more significant than these large institutional funding rounds is the extent and pace at which these companies are disrupting their respective industries. The HoneyBookteam was only four founders when we first backed them in 2012. That team is now approaching 100 people as they continue their relentless pursuit to build the largest market network for the events industry, making the event planning business paperless, efficient and full of creativity and delight.
SentinelOne co-founders Almog Cohen and Tomer Weingarten had the vision in 2013 to replace anti-virus with the next generation of endpoint protection. This year, companies including Netflix comprise the many large enterprises whom are deploying SentinelOne to displace their aging anti-virus solutions.
UpWest was there as the first investor in these companies, and we continue to support their growth long after the initial investment. My Partners and I are privileged to collaborate with courageous and visionary entrepreneurs who see no frontier as a challenge they cannot tackle.
Though we have grown, our mission has not changed. Our conviction and focus was (and still is) to back phenomenal entrepreneurs and work with them on the number one challenge they face: building a product in the market and sustaining fast momentum to create meaningful and industry-shaping companies.
We are excited to share today’s news from UpWest portfolio company uMake as they announce an additional $5.2M in financing, which will be used to further disrupt the multi-billion 3D design market. You can read the full announcement here.
The 3D market has seen an explosion of interest on the back of new hardware to create and experience it, from 3D cameras and VR headgear through to 3D printers; and a raft of popular content that has taken advantage of this. Today, uMake, is announcing $5.2 million in funding to fuel development of what it claims is the industry’s first cloud-based mobile 3D sketching app.
“On desktop you may find similar approaches but it’s not that common and can be expensive,” said CEO Eviathar Meyer.
The round was led by BlueRun Ventures, with participation also from UpWest, Brian McClendon, and Noam Bardin.
Based in San Francisco and Israel, uMake has already made a little splash: before even releasing its app, uMake was featured in Apple’s keynote when it debuted the Pencil and the iPad Pro. Then, when uMake released its eponymous app in the App Store earlier this month, it immediately appeared as an editor’s choice.
