Market Insights

Breaking Down Marketing Hype

November 9, 2018

Branding Matters.

After seeing many of the same buzzwords — Artificial Intelligence, Machine Learning, Blockchain, etc. — while pursuing our daily news feeds, we were curious where the line was between the reality of marketing hype.

In the case of raising capital, it is the reality. Below are three charts illustrating the capital raised by companies with the following product features in their company descriptions:

Blockchain

Artificial Intelligence

Machine Learning

Capital investment into each of these technologies reached a five year high in 2018, with improvements to the underlying products making their applications broader. OWI, however, notes with this must hype around specific keywords there is bound to be some bad apples.

Our advice this week is to remain skeptical until proven otherwise. The tech is useful in certain contexts, but not everywhere, and shouldn’t generate blind enthusiasm. If you’re starting a business though, dropping some of those keywords – AI, ML, blockchain – into your deck gets people excited.

 

The Top 3 Weekly Deals Covered by OWI this Week.

 

StarkWare \www.starkware.co \ Founded in 2018

Developer of a new cryptographic proof system to improve scalability and privacy in blockchains. The company’s system offers cryptographic proofs that are zero-knowledge, succinct, transparent (no need for a trusted setup) and post-quantum secure, enabling clients to improve blockchains’ scalability and privacy.

The company raised $30 million of Series A venture funding in a deal led by Paradigm (Crypto Fund) on October 29, 2018. Intel Capital, Sequoia Financial Group (Ohio), Coinbase, Data Collective, Semantic Ventures, ConsenSys, Atomico, Floodgate Fund, Collaborative Fund, Wing Venture Partners, Naval Ravikant, Scalar Capital, Pantera Capital and Multicoin Capital also participated in the round. The funds will be used to expand operations. Previously, the company received $6.7 million of grant funding from Ethereum on July 17, 2018. The funds will be used to explore STARK-friendly hash functions, to develop technology and to offer open source code to the ecosystem and raised $6 million of seed funding from ZCash, Bitmain Technologies and Polychain Ventures on May 9, 2018. Floodgate Fund, Pantera, Naval Ravikant, Arthur Breitman, Da Hongfei, Elad Gil, Fred Ehrsam, Linda Xie, Vitalik Buterin and MetaStable Capital also participated in the round.

Appthority \www.appthority.com \ Founded in 2011

Provider of a mobile threat-protection software designed to assist clients in keeping their data private and secure from mobile device, application and network threats. The company’s software delivers visibility into mobile risk with mobile application analysis and cybersecurity technology, enabling clients to secure their private data.

The company was acquired by Symantec (NAS: SYMC) for an undisclosed amount on November 5, 2018.

 

Javelin \ www.javelin-networks.com \ Founded in 2014

Provider of an AI-powered cybersecurity platform intended to develop protection for an Active Directory (AD) package of services tools used to manage organizational networks. The company’s platform protects an active directory and provides autonomous breach prevention, containment, threat hunting and incident response capabilities, in a single artificial intelligence-driven platform, enabling users to manage their applications and computers, thereby eliminating breaches.

The company was acquired by Symantec (NAS: SYMC) for $25 million on November 5, 2018.

 

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Investor Highlight

Maverick Ventures \ www.maverickventures.com \ Founded in 2015

Maverick Ventures is a venture capital firm based in San Francisco, California. The firm seeks to invest in the healthcare and technology sectors.

Active Portfolio – 33

Investments – 18

Med. Round Amount – $18.95M

Med. Valuation – $70.70M

# of Exits – 7

Deal History

In the past eighteen months, Maverick Capital has invested in the following 4 identity companies:

*Data acquired using PitchBook with proprietary keyword searches set by OWI Analysts