
Get in the KNOW
on LA Startups & Tech
XBonfire Ventures Ignites $100M Fund II (Exclusive)
Ben Bergman is the newsroom's senior finance reporter. Previously he was a senior business reporter and host at KPCC, a senior producer at Gimlet Media, a producer at NPR's Morning Edition, and produced two investigative documentaries for KCET. He has been a frequent on-air contributor to business coverage on NPR and Marketplace and has written for The New York Times and Columbia Journalism Review. Ben was a 2017-2018 Knight-Bagehot Fellow in Economic and Business Journalism at Columbia Business School. In his free time, he enjoys skiing, playing poker, and cheering on The Seattle Seahawks.

Bonfire Ventures, the Santa Monica seed-stage venture fund that has carved a niche focusing exclusively on unsexy but potentially lucrative business-to-business (B2B) software, has closed its second fund with $100 million in dry powder, up from the $63 million fund it closed in 2017. Adopting an "if ain't broke, don't fix it" ethos, little will change with the latest fund, except initial check sizes will be larger, though not dramatically so, averaging $1.75 million versus $1.25 million for Bonfire I. 60% will be set aside for follow-up investment.
"What we're doing is working well and we want to do more of it," said Bonfire co-founder and managing director Jim Andelman. "We're looking for the weird and wonderful in this boring part of the ecosystem that is B2B software."
Bonfire is relatively new to the Los Angeles VC scene but before coming together, its partners were successful investors and operators for decades. The firm was founded three years ago when Andelman, a managing partner at Rincon Venture Partners, joined forces with Mark Mullen, an angel investor who previously worked in private equity and was running Double M Partners. Mullen is also an investor in dot.LA. Brett Queener, who spent a decade as an executive at the granddaddy of B2B companies, Salesforce, was added to the investment team in 2018. "I call him a SaaS savant," said Mullen, referring to the software-as-a-service model that is common for B2B companies.
"Jim and Mark are longtime investors and they have a lot of pattern detection," said Queener. "I'm a career operator."
Bonfire writes bigger checks than typical seed funds, which is partly a function of operating at the later end of the ever widening definition of seed and also that it prides itself on taking a high-conviction, high-involvement approach. It plans to once again invest in between 25 to 30 companies over three years and lead about 75% of transactions.
"Our goal is to be the first call when a founder needs help," Andelman said. "If you're not helpful, they will stop calling."
The firm has a lower failure rate than most VCs because it only invests in companies that already have a product and are bringing in revenue, according to Andelman. Of the 28 startups in Bonfire I, 27 are still in business or exited for a gain. Their collective revenue has grown over 800% since being backed by the firm.
Bonfire Ventures has closed its second fund, with $100 million in dry powder.
Bonfire started deploying the second fund in January, already backing Optimize Health, SKAEL, Cube Software, and four other startups it has not yet disclosed. LPs include Daher Capital, Foundry Group, Mercer Advisors, Atento Capital, Aspen Grove Capital and Shea Ventures as well as over 30 founders and executives.
"We raised it pretty quickly," Mullen said of raising the fund, which took a brief pause when the pandemic struck in March. "But I don't want to say it was easy. I want to say it took nine years to raise that fund since my first fund was in 2012." (In something that is fairly unique for a VC, Mullen also invests some of his personal fortune as an LP in other funds that cover other sectors, including MaC VC and BAM Ventures.)
Mullen says valuations for B2B companies dipped for "30 days" starting in March but quickly rebounded. "We have not seen a price deflation in early stage software due to COVID, unfortunately," he said.
Bonfire looks for startups that can form moats around their business to fend off competitors and founders who can quickly get from around $5 million in recurring revenue to closer to $100 million. "We have to have confidence that this team is nailing it," Andelman said.
"It has never been easier to launch a software business," he continued. "That's great for entrepreneurship. You can be more capital efficient. But the flip side is any market worth pursuing gets crowded fast."
Los Angeles is mostly known for its flashier consumer tech startups like Snap and Tinder, though the region has plenty of B2B success stories, the latest of which is Culver City-based Signal Sciences, which last month was acquired by Fastly for $775 in cash and stock.
"Having been in the Bay Area, there's less of an echo chamber down here in SaaS," said Queener. "We have founders that are easier to work with. They're authentic and going after the opportunity."
Queener says he often works with founders who have "some semblance of a product market fit but it's not nailed" to focus on what exactly they are bringing to market. "A mistake that a lot of firms make is to try to serve too many masters, but you don't have resources and capital to succeed in too many markets," he explained.
Queener points to Branch, a startup Bonfire backed in 2017 that was initially focused on selling software that made it easier for shift workers to trade hours. At first, the company was trying to sell its product to retailers like Target. "That was tough sledding because you were competing in a space with Kronos and other workforce management software," Queener said. "They were doing fine but it was the normal slog."
Queener and others at the firm encouraged the company to try a different approach: Give away its software for free and earn revenue by providing a wallet for shift workers who lived paycheck to paycheck.
"That was an interesting pivot that worked well," Queener said. "Their growth is off the chart now."
- Brainbase CEO Nate Cavanaugh on Striking Out as a Young CEO ... ›
- Jim Andelman of Bonfire Ventures - dot.LA ›
- 11 Things You Should Expect From Your Seed-Stage VC Partner - dot.LA ›
- Flip Social Beauty App Raises $28 Million Series A - dot.LA ›
- Bonfire Ventures Is Raising a $165 Million For Its Third Fund - dot.LA ›
Ben Bergman is the newsroom's senior finance reporter. Previously he was a senior business reporter and host at KPCC, a senior producer at Gimlet Media, a producer at NPR's Morning Edition, and produced two investigative documentaries for KCET. He has been a frequent on-air contributor to business coverage on NPR and Marketplace and has written for The New York Times and Columbia Journalism Review. Ben was a 2017-2018 Knight-Bagehot Fellow in Economic and Business Journalism at Columbia Business School. In his free time, he enjoys skiing, playing poker, and cheering on The Seattle Seahawks.
Subscribe to our newsletter to catch every headline.
This Startup Wants to Make Testing for ADHD and Dyslexia as Common as Going to an Optician
Keerthi Vedantam is a bioscience reporter at dot.LA. She cut her teeth covering everything from cloud computing to 5G in San Francisco and Seattle. Before she covered tech, Keerthi reported on tribal lands and congressional policy in Washington, D.C. Connect with her on Twitter, Clubhouse (@keerthivedantam) or Signal at 408-470-0776.
Here’s how Jack Rolo describes his childhood: He was good at chess, and bad at spelling. He was good at math, and bad at reading. Rolo went on to study physics at Durham University in his native England—and despite often struggling in his courses, it wasn’t until after he graduated that he was diagnosed with dyslexia, a common language processing disorder that affects reading.
Rolo’s experiences informed his founding of Polygon, a Santa Monica-based diagnostics startup that emerged from stealth on Friday with $4.2 million in funding, and the goal of better diagnosing dyslexia, ADHD and other learning-related disabilities. The funding includes a $3.6 million seed round led by Spark Capital, as well as $600,000 in pre-seed funding led by Pear VC.
“It really is a product I wish I'd had access to at an earlier age myself,” Rolo told dot.LA.
After moving to California to earn his MBA degree at UC Berkeley, Rolo met his co-founder Meryll Dindin, who now serves as Polygon’s chief technology officer. Together, they’ve built a platform that aims to partner with schools to test children for a myriad of disabilities that may affect academic performance. (The startup claims it’s already teamed with schools in California, but did not disclose which.) Rolo says he envisions that these assessments become as ubiquitous as vision and hearing exams: that every student, regardless of age, background or academic performance, will be tested.
As is, testing for disorders like ADHD and dyslexia often depends on parents, teachers or pediatricians observing a child, detecting something amiss and intervening. There are problems with this method; for instance, girls are chronically underdiagnosed with ADHD because it presents itself differently than it does for boys. Teachers juggling crowded classrooms may not be able to perceive why a specific child is falling behind. And Black and Latino children are often overlooked when it comes to diagnosing disabilities.
“Common roots of referral are teachers, and typically that's flagged because they'll see the student failing,” Rolo said. “That's part of the problem—that this then becomes almost a wait-to-fail approach, when ideally you want to pick these things up proactively.”
Polygon employs full-time psychologists who evaluate students through a telehealth platform. After undergoing a range of standardized assessments and interviewing their parents and teachers, a student who is diagnosed will receive an "Individualized Education Program," a schooling curriculum tailored toward their disabilities.
Assessments start at $995, which Polygon says is up to five times cheaper than traditional disability testing alternatives. The company plans on driving that cost down further by collecting a large data sample of assessments and building machine learning technology to “pre-screen” students; those who are flagged would then undergo more extensive testing.
“Ultimately, what we're trying to move toward is a model quite similar to the optician, where everyone gets the evaluation,” Rolo said. “Yes, assessments are still not accessible for all families just yet—but this is the beginning, and we hope to drive this cost down way further over time.”
Polygon said the new funding will go toward expanding beyond California and growing its network nationally.
- Kernel Raises $53M in Quest for Brain-Reading Machines - dot.LA ›
- Found CEO Sarah Jones Simmer on How Her Cancer Diagnosis ... ›
- HYCOR Biomedical Raises $20M to Expand Allergy Testing - dot.LA ›
Keerthi Vedantam is a bioscience reporter at dot.LA. She cut her teeth covering everything from cloud computing to 5G in San Francisco and Seattle. Before she covered tech, Keerthi reported on tribal lands and congressional policy in Washington, D.C. Connect with her on Twitter, Clubhouse (@keerthivedantam) or Signal at 408-470-0776.
ZipRecruiter CEO Ian Siegel on How the Job Market Has Shifted
Spencer Rascoff serves as executive chairman of dot.LA. He is an entrepreneur and company leader who co-founded Zillow, Hotwire, dot.LA, Pacaso and Supernova, and who served as Zillow's CEO for a decade. During Spencer's time as CEO, Zillow won dozens of "best places to work" awards as it grew to over 4,500 employees, $3 billion in revenue, and $10 billion in market capitalization. Prior to Zillow, Spencer co-founded and was VP Corporate Development of Hotwire, which was sold to Expedia for $685 million in 2003. Through his startup studio and venture capital firm, 75 & Sunny, Spencer is an active angel investor in over 100 companies and is incubating several more.
On this episode of Office Hours, host Spencer Rascoff talked with ZipRecruiter CEO and founder Ian Siegel about how he built his company, the lessons he's learned along the way and how he's seen the pandemic drastically reshape the job market—probably for good.
Siegel moved to L.A. to be a writer in Hollywood. But he quickly realized he hated it. Instead, he moved into the fledgling online division at Warner Bros., From there, he found himself working at a series of VC-backed startups that became successful. As a result, he became known in the industry as an expert in taking online businesses that had plateaued and figuring out a way to help them grow. He said he hated every minute of it.
“What you are in that situation is you're an agent of change. And what I learned is you can be good at that, but no one likes you because everybody fears change.”
Instead, Siegel worked up the courage to start his own business.
“Why do I let people pay me such a small amount of money to turn around these businesses?,” he asked himself. “If I'm so good at this, why don't I just start my own and build it right from the very beginning. And that's what ultimately gave me the conviction to go launch ZipRecruiter.”
His time working at young startups too small to have their own HR departments gave Siegel the idea. After posting the same job position across multiple websites and printing out every single resume submitted, he realized he was facing a problem technology is built to solve.
“I just wanted a magic button that I could push. And it would send a job to all job boards at once, and then all the candidates from all those different sites would go into one easy to review list. That's exactly what we built with the first version of ZipRecruiter,” said Siegel.
Over time, ZipRecruiter’s mission has changed, he said, from a company aimed at solving a single pain point to a company trying to reinvent how the labor market functions. That, he added, is orders of magnitude more difficult, because “you are retraining America or potentially the world on a new way to do something.”
“And now you are knife fighting in the jungle, you are trailblazing,” he added. “I don't worry about how anybody in the current ecosystem operates. I'm truly fundamentally trying to change the labor market in the United States right now.”
Siegel said he’s seen the job market drastically change over the past couple years, as the pandemic accelerated the move to remote work and hybrid and remote positions surged. Fewer than 2% of jobs on ZipRecruiter had the words “remote” in them before COVID-19 stuck. Now, 60% of applicants say they’re seeking remote or hybrid work, and 12% of the jobs listed on the site offer a remote option—and that number is growing.
That reality has changed how he runs his own business.
“What I've done at ZipRecruiter is accept change,” Siegel said. “We are fully embracing remote. I believe remote is not only here to stay, it's a huge benefit.”
That, he says, is because employees and employers both save time on driving and grooming. They save money on gas and parking. The office, he added, will still have a purpose, but it will probably be more for building culture, and less for work.
"It'll be a much smaller space entirely designed around fun," he said. "No one will ever go in there every day purely for the purpose of doing their job, probably ever again."
One of the lessons Siegel said he’s learned as a serial entrepreneur is to make sure the work you pick is meaningful to you.
“It turns out every business takes the same amount of time, which is all your time,” he said. “So be thoughtful about how you spend it. Pick work that's meaningful for you. Pick work that has scale opportunity to it and that you're going to be excited to go into every day,”
- What ZipRecruiter Sees for the Economy's Eventual Rebound - dot.LA ›
- ZipRecruiter Lays Off 39% of Staff - dot.LA ›
Spencer Rascoff serves as executive chairman of dot.LA. He is an entrepreneur and company leader who co-founded Zillow, Hotwire, dot.LA, Pacaso and Supernova, and who served as Zillow's CEO for a decade. During Spencer's time as CEO, Zillow won dozens of "best places to work" awards as it grew to over 4,500 employees, $3 billion in revenue, and $10 billion in market capitalization. Prior to Zillow, Spencer co-founded and was VP Corporate Development of Hotwire, which was sold to Expedia for $685 million in 2003. Through his startup studio and venture capital firm, 75 & Sunny, Spencer is an active angel investor in over 100 companies and is incubating several more.
Riot Games Doubles Down on Mobile With ‘Aim Lab’ Investment
Samson Amore is a reporter for dot.LA. He previously covered technology and entertainment for TheWrap and reported on the SoCal startup scene for the Los Angeles Business Journal. Samson is also a proud member of the Transgender Journalists Association. Send tips or pitches to samsonamore@dot.la and find him on Twitter at @Samsonamore. Pronouns: he/him
Riot Games has invested in virtual shooting range developer Statespace, accelerating the Los Angeles video game publisher’s efforts to dominate the mobile gaming space.
Riot did not disclose terms of the investment but told dot.LA it took a “minority stake” in New York-based Statespace.
Statespace’s main product is a platform called Aim Lab, a free-to-play virtual shooting range that first-person shooter gamers can use to warm up their skills before heading into a competitive match. Statespace CEO Wayne Mackey told the Washington Post that the plan is to leverage its relationship with Riot to bring Aim Lab onto mobile platforms—a transition that he said is “imminent” and could happen as soon as next month.
Riot, in turn, wants to integrate Aim Lab as part of its growing base of titles with hardcore fan bases, like its first-person shooter game “Valorant” or its multiplayer online battle arena (MOBA) game “League of Legends: Wild Rift.” The idea is that esports players could use Aim Lab to warm up with weapons used in the actual games, and also for a postmortem on a match that they lost by giving them a chance to review footage of their defeat and figure out how to improve, Mackey said.
“We look forward to collaborating with Statespace on developing innovative training and coaching tools for Valorant and MOBA players around the world to improve their skills at every level,” Jake Perlman-Garr, Riot’s global head of corporate development, said in a statement Thursday.
Riot has been doubling down on mobile gaming in recent years. The publisher has released three mobile games in the last two years—including “Wild Rift,” its most popular mobile title—and has invested in mobile gaming companies like Double Loop Games and Bunch. That focus has come as mobile gaming has emerged as one of the industry’s fastest-growing sectors.
- Why Riot Games Is Suing Rival Chinese Game Developer Moonton ... ›
- Riot Games Acquires Gaming Studio Hypixel - dot.LA ›
Samson Amore is a reporter for dot.LA. He previously covered technology and entertainment for TheWrap and reported on the SoCal startup scene for the Los Angeles Business Journal. Samson is also a proud member of the Transgender Journalists Association. Send tips or pitches to samsonamore@dot.la and find him on Twitter at @Samsonamore. Pronouns: he/him