1Mby1M Virtual Accelerator Investor Forum: With Daniel Cohen, General Partner at Viola Ventures (Part 4)

Sramana Mitra: In the first one that you talked about where you are doing transcription, what vertical applications are you going after? 

Daniel Cohen: Most of their revenue comes out of the education industry. These are online courses that need to be transcribed. That market has been growing so fast because of COVID. Everything is happening online. That has been their main market. They are also operating in the legal market, which is a large market as well. 

Sramana Mitra: Yes, legal and healthcare markets are big. When they go into other verticals, are they working with other system integrators or other ISVs who are building apps on top of that platform? How are they going to market?

Daniel Cohen: No, they go to market directly. It’s an online distribution, and they have their own sales force. So far it’s been directly interacting with customers. I don’t think that they have been interacting with ISVs or integrators. 

Sramana Mitra: What else is interesting in your portfolio?

Daniel Cohen: Another AI company that we are excited about is a company called Immuneai. It uses AI to use patient data around the immune system. It collects information from different people around their immune system and tries to leverage that data to help pharmaceutical companies develop better drugs. It leverages important data on both healthy and unhealthy people to understand the immune system better.

We are excited about that company because the immune system is one area that is not understood enough. Again in 2020, we understand it has a critical part in saving humanity. They are leveraging that to think about cancer and other areas.

In a completely different area, we are investors in a company called Lightricks. It is a mobile image editing and creativity app suite, mostly image editing and video editing. It has been growing incredibly fast and is becoming the Adobe of the mobile world. 

Sramana Mitra: That is all mobile distribution?

Daniel Cohen: Yes, that’s right – mobile apps and subscriptions. People download the app and they subscribe. Some users have been with us for over four years. People love the products and they use them constantly. 

Sramana Mitra: I’ve two favorite apps that I use a lot. One is Duolingo which is a language learning app. That is a mobile subscription model. I think they are doing well at this point. It costs nothing and you get tremendous value. If you have the discipline to learn on your own, it’s an excellent app. I do French on Duolingo.

Another app I use is a great chess app. Again, this is very affordable, but it has an enormous amount of value. I think the mobile subscription model in the app is going very well. 

Daniel Cohen: Absolutely, we have seen that in companies like Headspace and Calm. We have seen that growing in the entertainment and games world, of course. That is growing in many other areas as well. There are many other opportunities in the mobile subscription business model. It’s proving to be a great way to increase LCV for consumer apps. 

Sramana Mitra: What else is there in the non-mobile and AI space? In deep tech, for instance, what are you seeing? That is one area where there are few investments. What is your thesis? What kind of things are you investing in? What are the dynamics of that space?

Daniel Cohen: I’m not an expert, but, in general, I will say that we are moving a little bit from a world that was dominated by Intel with the multi-purpose processor that can be used for every task, into a breakdown where different tasks require different chips.

We are hungry for performance in every part of the computing side. There are now dedicated chips for AI, storage acceleration, and many other areas. We call it the breakdown of Intel. That is a great opportunity for new semiconductor companies.

Israel is strong on semiconductors, so we see a lot of entrepreneurial activity there. That is an area where we can invest in a unique position because there’s not a lot of money going into these areas.

Sramana Mitra: It needs that money because only a very small percentage of the venture capital industry is willing to do those kinds of businesses right now. Those categories of entrepreneurs are having a hard time getting financed. 

Daniel Cohen: One of the things we understand is that the way you build the consortium for a chip or a semiconductor investment versus a software investment is very different. For a software investment, you would do an A round on your own and then take it out for a nice up round.

On the semiconductor side, you come in with a consortium right upfront with two or three funds. They fund it for the rounds after that because it takes time to unlock the value. When it unlocks, it’s amazing, but you need to have more money at the start. 

Sramana Mitra: There is going to be at least one major acquirer who needs a strategy. Intel lacks a strategy right now, so Intel is quite desperate in looking for high potential companies in that space. Nvidia, on the other hand, is doing gangbusters. Nvidia is dominating the markets that you talked about earlier. 

Daniel Cohen: By the way, Nvidia acquired Mellanox from Israel. It was a huge acquisition from last year. Big companies are hungry for acquisitions and it’s a great opportunity for us. 

Sramana Mitra: Thank you for your time.

This segment is part 4 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Daniel Cohen, General Partner at Viola Ventures
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