Why We Invested In Masthead Data
Sometimes things just click. The moment I met Yuliia I knew she’s an exceptional founder who figured out a niche in a huge data observability market. I wanted to be part of her story.
SMOK Ventures joined the $1.3M USD pre-seed round of Masthead, a Canada-based 🇨🇦 data observability startup founded by a Ukrainian 🇺🇦 couple Yuliia Tkachova & Sergey Tkachov.
The Back Story
I met Yuliia courtesy to Google Form Startups where she pitched her startup in front of investors in Warsaw 🇵🇱 in March 2023.
We immediately clicked.
I experienced the problem they are solving — i.e. breaking data streams — first-hand while at Samba TV, so it was not hard for me to understand the value Masthead provides.
Yuliia is an ex product manager, like myself, so we spoke the same language, which also made it easier to get to the point quicker.
She walked me through the live demo of a product at the conference. Normally things like those end up super awkward. This time, however, it was not. I think it was mostly because of the passion she has for the product, and how she can talk about it both on a generic “VC level” and on very technical “CTO level”. Once she realized I can get deep into the technology, it got super interesting.
Data Observability — The X Factor
Data Observability has become an essential component of modern data stacks to tackle growing numbers of erroneous data. This means a dynamically growing demand for such solutions. Harvard Business Review data shows that $3.1T annual losses are generated due to erroneous data in the US alone.
The main differentiator which makes Masthead’s solution unique and valuable for their clients, is that unlike traditional data observability solutions, Masthead does not compromise on clients’ data privacy and security. Their platform observes data pipelines and table health in real time via logs without accessing clients’ data directly (i.e. does not require a database connection). Thanks to this technique, the company’s software is also easier to integrate than competitors that require database connections.
The fundraising timeline
Founders often ask about our process and how fast we can move, so in full transparency, here’s how the process looked like in case of Masthead.
The fundraising was initially slow, like for every first-time founding team, but it quickly picked up once SMOK and Monochrome committed about the same time. With focal and DEPO and a few angels already being part of the deal, within days, the round changed from under- to oversubscribed with a new investors unfortunately not being able to me it.
That’s how the actual timeline looked from my perspective as a VC:
- January 20th. Yuliia sends a cold email with the deck which we ignore.
- January 25th. Yuliia pings us over email. We reply back that Canada is outside of our scope and that we’re passing because we’re like total idiots :)
- March 27th. Michael Ciffra from DEPO Ventures introes me to Yuliia who’s planning to be in Warsaw.
- March 30th. First met with Yuliia in Warsaw, and quickly figured out they are actually well within our geo-scope with a CEE-based backoffice team and Ukrainian founders.
- April 1st-14th. Internal due diligence — chatting with multiple founders and engineers of data-heavy startups like Sumologic, Data Dog and Snowflake to confirm the product market fit.
- April 18th. Yuliia chats with Dan Bragiel, our SF-based venture partner. As a US fund investing in CEE we always want to have both our US partner and our CEE partner involved in each investment we make.
- April 20th. SMOK commits to invest. Negotiating terms.
- April 25th. KYC and formal DD finished.
- May 4th SAFE signed.
- May 9th. Money wired.
The fundraising process confirmed my belief in Yuliia and her founding team. Being able to navigate the fund raise, keeping in constant loop with all the parties, accommodating for some specific requests of each VC and staying genuine and confident at all times are all traits of exceptional founders and those will be required later on when the company raises a seed / series A and further rounds, hopefully taking the data observability market by storm!
Are you a Central / Eastern European founder working on a startup?
- At SMOK Ventures we invest in top pre-seed founders in the CEE region and diaspora.
- We love software engineering tools, AI, computer games and founders who understand their industry well and disrupt it via software.
- We can invest in either EU or Delaware-based entity as long as there is a CEE connection and a global mindset of the founding team.
🇵🇱🇨🇿 🇸🇰🇪🇪🇱🇹🇱🇻🇺🇦🇧🇾🇷🇴 🇧🇬 🇭🇺🇸🇮🇭🇷🇲🇰🇷🇸🇲🇪🇧🇦🇲🇩🇦🇱🇽🇰🇦🇲🇬🇪🇦🇿🇰🇿
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