Thanks for subscribing to TheFridayEveningReport 5th Edition. TheFridayEveningReport is an weekly report on the latest venture funding, PE deals & my endless rants about literaly the week that wasn’t. And let’s see the startup funding happenings since Apr1, 2018.
- Mumbai based Online Fitness Discovey Platform — Fitternity, raised INR 12.97 crores from Exfinity Venture, Saha fund Partners, Arihant Patni of Patni Family Office, Anjali Bansal, Shardul Amarchand Mangaldas, Satish Khanna and Taparia family office.
- Coimbatore based Synctag is a Social Media Anlaytics Platform. It has raised 2 crores INR from Subhkam Ventures and Mohit Khadaria. Synctag is a content aggregation service that provides aggregation across multiple types of content from various types of providers in one place. CONGRATS!
- Gurugram based Benepik which is an Enhanced Employee Engagement Platform, raised Seed / Angel Funding from Vishal Bali, Yogesh Misra, Thomas Assessments and others.
This post is about 2 stories,… but it sums to one question: Who controls us?
Israel is a very small community that is practically an island completely surrounded by nations that you can’t cross. Yes, they have attacks on all sides and porous borders. They developed creativity to compensate its lack of resources, and it is a country that need to conduct constant surveillance on its neighbors, which is under constant annihilation and threat by other nations,
Israel understood many years ago that going into wars and launching massive military operations bears unbearable prices, and first in human lives, in terms of economic loss, and international legitimacy. So, cyber security was right answer for many things that was needed.
2017 was another excellent year for Israeli cybersecurity startups, with dozens of companies being formed, breaking fundraising records and producing solid exits — 60 newly founded cybersecurity startups emerged in Israel. Israeli cybersecurity ecosystem, with companies like Deep Instinct, Demisto, PerimeterX, Twistlock, and Karamba Security raising large B rounds, and companies like SentinelOne and Cybereason raising significant amounts of growth capital this year.
And today Israel’s private cybersecurity receives more than 1/5th the global funding, and this nation has more venture capital per citizen, than most startups in the valley. Here’s few IL based cyber security companies to watch.
Israeli cybersecurity companies exited for approximately $1.3 billion in 2017 (not including IPOs), with an average exit valuation of $130 million.
Military service is mandatory for most Israel citizens, and one of the largest parts of this force is cyber intelligence unit. Approx 20000 cybersoliders work in the desert city to constantly protect the country from many forces, and this is quickly becoming the Israel's silicon valley
On recruitment process: To quote Roni Zevahi, the CEO of Cyberspark, a $5bn venture on why military being a part of all of this, “ … because going to the services is compulsory, Israeli army can be looked as the largest organization in the world. They practically start scanning the layers of people and position them in right places,.. If you take a person who is 18 years of age, and expose them to the state-of-the-art technology to the highly advanced paradigms and methodologies, when they go out of the services at the age of 23–24, they from a corporate point of view, they have already done a screening. And, they select their best.” How is the prelims done? There is after school classes, which are feeder programs, yes unofficially, for the cyber units.
… Not only defense, but also these units are responsible for one the most aggressive cyber attacks in the history. Stuxnet, a cyber attack that sabotaged Iranian N-program, by destroying the centrifuges of Natanz nuclear facility is widely believed to a joint operation of unit 8200 and the NSA.
In 2014, almost 43 former members of the 8200 unit formally wrote an open letter to the PM of Israel, refusing to serve because of the unit’s use of wide spread surveillance. Israeli Intel is everywhere, literally everywhere in the palestianen territories, and surveillance is so worrisome that no one is off-limits. Although, if you are at war with other people, its an advantage. But, the problem is when it goes beyond insecurity, and affects those directly related to them (families), its a problem beyond correction.
It was widely speculated the government monitored social media, watched every move of their citizens, and put them to their use. If you were a anti-establishment blogger, and these are secrets about your private lives, what your families would not have known, and this gets collected by intel agencies, and kept as a bargaining chip to leverage information. Sources claim, although this might sound worse than N. Korea, few agencies (mostly Govt and affiliated ones; or the ones claiming to be so) have made threats with many certain individuals/peers to trade intel, click sensitive photos, do espionage and work on gigs as ransom. And, this is so scary.
…. Israel is feared for many reasons. But, before we even say ill about a nation as a whole, I really respect the people and their resilience. Japan and Israel are 2 countries which have grown mighty even with tiny real estates. In a world of so much opportunities, this is the kind of desperation we need to seek if we need to startup. And, its that desperation for survival which pushed these 2 nations to rise as super powers. Before you startup, ask yourselves. Are you desperate? Are you hungry enough?
Anyways, coming back to our story, Collecting data without consent is highly inappropriate. Privacy is a problem, and esp. when data can land on someone who can use it to their selfish advantages. The problem is not just collecting data, but making which data is relevant and choosing what to ignore, however if the watchers start putting the data to their benefits, who will bell these cats?
The gig economy + blockchain: Before you even think about reading anymore, go and #deletefacebook. Here’s why — Why would you have to leave your data in the hands of a giant identity theif which 24x7 uses the uploaded moments of your digitized life in any way they want, selling your moods to advertisers, with no compensation to the end user?
Facebook simply replaced the tools we once used to tell the world of our joys and sorrows and it replaced them with cheap knock-offs that make us less connected, not more. Go ahead, #deletefacebook!
Now, think about decentralized version of Facebook/Twitter. Is it possible?
We use something becuase its free, but at the cost of giving up ownership and digital identity. Who controls your data? Who controls your identity? Can a P2P social media network based on a blockchain generate revenue, but for its users? Perhaps, Yes!
Ref. blockchainbased algorithm called Proof-of-Stake (PoS)
The UN is using the block-chain for refugee assistance, using a retina scan as starting point for a verified identity.
Why Blockchain for a Database?
How much do you trust, say, Google? Facebook? Did you know, a single line of bad code resulted in AWS failure that took a third of the internet. And, this is why decentralization is really the craze!
Let’s take an example:
…. I wrote in a post about how 3rd party apps steal data and sell them. UBER, the most notoriously over-subscribed company with a valuation more than few countries combined. Cos like UBER/OLA exists only because of their pinmen drivers. And, today seem to be perhaps the are the most depressed people on the planet! UBER/OLA charge a commission — 20–25% for “bridging the demand-supply gap”. Thankfully, they were not asked to deliver groceries. (This was a plan by OLA & UBER 2 years ago).
Consider this statistics — A driver from Chandigarh did the highest number of trips, with 12,574; one from Chennai did 12,354 trips. Here, comapnies like UBER/OLA make a clean 25%. So, averaging, this Chandigarh based driver forfeits all the money he earned for 3143 trips. Isn’t this too bad? (Excluding GST, payment transfer fees as well)
Here, we need to earn for paying taxes, as well paying the gig capitalists. Fiverr.com charges 25% as commmision. And, even worse Oz based Freelancer.com debits commission from you even before client pays them! And, none of them pay freelancers in full. I am hoping many content writers, freelance designers, SEO consultants who depend on gig economy and have felt the burnt of hefty fees associated with wire transfers will concurr to my view. I would have saved enough money to buy a car, if not for how much I was charged for Paypal/Forex conversion fees.
Drivers arent protesting Uber because they're tech-averse, they're against a single technology company squeezing them out of a decent income
A decentralized version of a ridesharing app would allow drivers to set their own rates. The money would go directly from passenger to driver, with no intermediary taking a middleman cut.
And, that why we need to embrace change! The current challenges facing the blockchain space are scalability, regulation, user experience, and education.
… For more than half a century, thrifty Canadians have had an alternative to their legal tender. Canadian Tire money was launched in 1958 when the company’s co-founder and first president, A.J. Billes, needed a gimmick to attract customers to the company’s newly established gas stations. As the program took off, Canadian Tire started printing its coupons on bank-note quality paper. But Canadian Tire money has worked its way into the Canadian psyche, with many small establishments across the country honoring the bills. “You could get a beer with Canadian Tire money!” he says. “It sure beats buying motor oil.” Canadian Tire stores — anchoring strip malls from Montreal to Vancouver, and many smaller towns in between — are one of the country’s most ubiquitous suburban landmarks. Ex Unitae Vires.
… I paid a some odd thousands at a private hospital to get my eye tested, and I was not given my eye power prescription. Why? I should purchase my spectacles at their management owned basement spectacle shop. How connvining! Imagine if you would own your healthcare data, as opposed to having it locked up elsewhere, and mandated by some evil corp to release it to another hospital/insurance provider, only on a paycash-to-know basis, as opposed to right-to, who is gonna stop these capitalists?
But, that said, beware of the hype cycle!
Accepted. ICOs (Initial coin offerings) are not the solution for startup fundraising. They are really cheap way to earn some coins. Don’t take monetary risks without consulting your local expert. Coin Economy may look like the Canadian Tire money, but at least that gives a great way to be treated like John Wick! Go on, break your floors.
While, more than half of the world’s population doesn’t have a bank account, there are some politicians making tall claims about “embracing” blockchain. Remember BHIM? Not ChotaBheem, I meant the one app called digitalindia introduced as the savior after #cashban #demonetization. How many use the app? And, else where Venezuela is exploring crypto as its own currency keeps losing value, and our own nation bans bitcoin. In Venezuela, a liter of water is still more expensive than a liter of fuel/oil.
Why Govt opposes blockchain?
Cryptocurrency has made sending money as easy as sending an email. And, if the driver could earned that 25%, he would have saved enough for himself. Money would go directly without intermediatries, and no banks to cut your taxes before you get them credited from your sweep accounts.
…. Still, banks are struggling. The government gave banks a 5.5 million target to reach by Sept 2017. I last visited my bank during the demonetisation drive in late 2016. High on terrible bad NPAs, fraudseters like Nirav Modi, loan defaulters like Mallaya, low on public trust and squeezed in the middle by fintechs like PayTM, wallets and PoS charges. There are 800 million debit cards, barely half of which are in active use. And, still banks are running in debts!
A sizable chunk of the world’s population still struggle to make their business online. And, a sizeable chunck is working class who are toiling from 9 to 6 for a decent pay. Oil is in flux. Manufacturing has slumped. And real estate markets can’t seem to stop their trajectory. And, thanks to Angel Tax introduced by the Govt! Startups going dry without even basic funding. Not even via Mudra schemes. So, what can we do about it?
The platform for blockchain development is going forward in many countries around the world, and a wider adoption of blockchain will see developments in national cryptocurrencies, land records, property rights, supply chain management, capacity for sharing public health data and startup funding.
Distributed networks also make it easier to share alternative energy. Brooklyn’s LO3, is creating a neighborhood solar-power market on which solar panel owners can sell excess energy directly to neighbors. Dubbed as Transactive energy company— reimagining how it can be generated, conserved, traded, and shared, LO3 is preparing to expand internationally after building the world’s first blockchain microgrid. How fun!
But that’s just my two cents. What do you think? I want to hear from you, comment and let your voice be heard!
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