THANK YOU FOR SUBSCRIBING
We’re living in a transformative time in enterprise software. AWS and Azure continue to prove their cloud dominance which creates both opportunities and challenges for enterprise focused startups. On one hand, cloud hosting has led to an influx of smart folks starting companies faster & cheaper than ever before. This has been a great trend as founders feel more comfortable leaving their current, often very high-payingroles to engage in the risky game of startups. On the other hand, Amazon and Microsoft are innovating at incredible speeds with the sole purpose of pushing enterprise to their storage and computer services. This speed of innovation has made it increasingly tougher for infrastructure software companies to compete. For example, Amazon made over 100 product announcements at their 2018re:Invent conference, each one potentially hurting a startups chances of success. This has led us at Ignition Partners to shift our focus from infrastructure software to higher up the stack applications that automate business processes for users, as well as vertical AI applications that work within the current infrastructure to address emerging and new business processes.
"Many workflow automation startups have gotten traction recently to change the way business users conduct daily repeatable tasks"
For many of the incumbents in the Fortune 1000, technology companies have emerged looking todisrupt the way they do business. This has forced Fortune 1000 enterprises to step-up their ‘digital transformation’ story. We think there are two key ways to do this.
1. Capture value on neglected data.
On this first point, enterprises have built massive data sets over many users and years even if they had “no use” – meaning no known application or plan – for the data at the time. With this data and the help of startups they can on layer systems of intelligence (AI +ML) to help them drive deeper. These systems of intelligence will allow enterprises to fend off competition trying to break into their industry by giving them actionable insights they overwise may have overlooked.
Two companies in our portfolio building solutions consistent with this thesis are Icertis and Botkeeper. Icertis is the leading enterprise contract management platform in the cloud. No business gets done without a contract, and they are foundational for every enterprise, and there often isn’t an easy way to manage all the contracts over multiple offices, languages, etc. Icertis allows enterprise to increase agility around any contract related workflow including AI applications bring static contracts to life. We think Enterprise Contract Management (ECM)willbecome as big a category as existing systems of record, like ERP and CRM.
Botkeeper provides bookkeeping to businesses using a powerful combination of skilled accountants and automated data entry through the use of machine learning and AI. By combining machine learning, artificial intelligence, and expert senior accounting, Botkeeper can be your first bookkeeper or replace the need for an entire accounting department. Both Icertis and Botkeeper will be successful as startups in this space because they become the center of gravity for contract and accounting data respectively, then layer AI + ML to drive insights.
2. Empower business users to automate pieces of their workflow.
Many workflow automation startups have gotten traction recently to change the way business users conduct daily repeatable tasks. If these startups have a clear value proposition and a short time to value, they can really help larger enterprise become more efficient.
Again, as the two most valuable companies in the world continue to innovate quickly on horizontal solutions, we’ve found opportunity to invest in startups that sell advanced analytics (AI + ML) solutions to verticals. Many of these vertical focused incumbents are seeing increasing pressure from technology companies, for example Amazons foray into healthcare or Robinhood’s fast rise in financial services, driving them to invest quickly in new technologies. Startups that have developed vertical-focused AI applications can helpincumbentsrunmachine learning models on their domain-specific data sets. From a venture investing standpoint, the fact that the data sets are domain-specific allows these machine learning models to be somewhat proprietary – harder to copy from new technology enabled entrants. Our thesis is that large cloud providers will focus on horizontal AI platforms (at least for the short term) allowing a new wave of start-ups to prosper. Given this, we’ve also taken a deeper dive into certain vertically focused software companies.
Tractable and KenSci are great examples in our portfolio. Tractable is an AI solution in the insurance space that analyzes photos of damage and accurately predicts repair costs. The solution plugs into an insurance claim workflow so claims can be settled faster.KenSci is predicative analytics solution for the healthcare industry. KenSci’s risk prediction platform helps uncover clinical, operational and financial risks by aggregating data from existing sources such as EMR, ADT, Claims and Financial data.
We’re excited to be investing in business process automation and vertically focused AI/ML start-ups. Ignition is a series A and seed focused venture capital fund based in San Francisco and Seattle. If you’re building a company in one of the categories mentioned above we’d love to chat. email@example.com ; @CamBorumand.
Check This Out:- TOP MARTECH CONSULTING STARTUPS