My journey with Alcide – Betting on a future market
Today it was announced that Alcide has been acquired by Rapid7 which brings one story to an end and begins a new one. I have had the honor of taking part in the journey from a very early stage, leading the seed round and joining the company even before the first employee was hired. I was able to witness the change and growth, and even lived to tell the tale.
I met with Ranny and Gadi who founded Alcide back in early 2016, and then again some months later, after they sharpened their story, direction, and vision. The second time we met was enough for me to get hooked, which followed with Elron leading Alcide’s seed round. It was one of our first investments in the cyber security and enterprise software space, in which we have made 15 investments in recent years. Ranny and Gadi were not the “usual fresh out of 8200” type of founders but rather more mature, experienced, and sociable. Nonetheless they had their unusualness. I still remember discussions on why Gadi’s skateboard business needs to be mentioned in the investment documents (Gadi has done a lot of work with youth through it).
Back then in 2016 (less than 5 years ago, but it seems like ages ago), cloud native was in its infancy, wars were waged over container technology, KubeCon was a small and geeky conference, and almost no one had seen a real live cloud-native environment in production. A buzz started to form around hybrid environments, but they were hardly a reality. Alcide’s founders wanted to build a security platform for securing any workload, across hybrid environments, across any platform, and any stack. Very pretentious, very exciting.
As mentioned, almost no one on Earth was yet to have serious, large-scale workload deployments in production. We were betting not only on a future pain but on a future technology and market.
Over the next couple of years different buzzwords and technologies around cloud native, cloud workloads, and stacks came and went, mostly making everyone confused. KubeCon sessions were mostly about how difficult it all is. While parts of container technology moved towards convergence, others went more and more with dispersion. The entry of traditional vendors such as IBM, VMWARE and ORACLE into the cloud, with their own cloud environments and stacks, was becoming too much to swallow. It was extremely difficult to achieve continuous validation for a product while the technology surface remained unstable.
This chart presents a partial snapshot of relevant stack technologies at some point during 2018
In 2018 we decided to bet on the converging parts and drop the dispersing ones, at least for a time, in order to have a focused product, allowing us to make it much more competitive and also valuable to our customers. We decided to place our bets on Kubernetes which seemed to be gaining momentum while more and more organizations were choosing it for their cloud native projects.
Two years later it seems we had made the right decision. Kubernetes has emerged as the chosen technology for cloud native orchestration and this allowed Alcide to run much faster forward, gaining more customers, recognition, and traction. This has also helped the company build new partnerships with a variety of technology providers both from the security market as well as from the DevOps market. One of these partnerships in turn led to Alcide’s acquisition.
Along the way we were lucky to have Intel Capital join the company, leading the round that followed our Seed round, and later on CE Ventures joined as well. A very professional group of people led the company both on the management side and on the board side and this group was responsible for many strategic decisions along the way, always in good spirit and friendship. For me mostly, but also for Intel Capital, the early bet on a future market, a future pain and future need, was very challenging, and I believe we were successful in making the right adjustments along the way together with the founders and management team, but this is what startups are all about. Being flexible enough; being attentive enough to the outside world; never falling in love with ideas to the extent you are unable to let them go; and navigating continuously through the tough sea of product-market fit.
Also, along the way we underwent a change of management when Amir Ofek took up the position of CEO , as well as a number of changes to the US sales team, as is typical for many startups when building their first sales operations, and of course we have been impacted by COVID19, mostly during the first half of 2020. An overall roller coaster ride with many lessons learned. But most importantly, bringing the ship to a new harbor. Alcide’s acquisition by Rapid7 marks the entry of the latter into Israel, establishing its first stronghold here. There is great satisfaction in this on top of everything else. Here begins the new story of Alcide, as part of Rapid7’s cloud security offering, and I am sure this story will be no less exciting.
As for us at Elron, we are thrilled to continue our own journey partnering with exceptional founders in building breakthrough companies. We are encouraged by our success thus far in the enterprise software sector, this being our 3rd exit in the space, and are even more eager to make many new investments.