Childcare Providers Get a Lifeline From L.A. Startup WeeCare

Rachel Uranga

Rachel Uranga is dot.LA's Managing Editor, News. She is a former Mexico-based market correspondent at Reuters and has worked for several Southern California news outlets, including the Los Angeles Business Journal and the Los Angeles Daily News. She has covered everything from IPOs to immigration. Uranga is a graduate of the Columbia School of Journalism and California State University Northridge. A Los Angeles native, she lives with her husband, son and their felines.

Childcare Providers Get a Lifeline From L.A. Startup WeeCare
Photo courtesy of WeeCare

Erika Metry is trying to figure out how to pay the mortgage on the tidy, three bedroom Inglewood home where she and her mother run a small childcare center that's now looking after kids of frontline workers.

The children she took care of pre-COVID-19 no longer come, but she's one of the lucky small-business owners who can keep their doors open during the pandemic. Metry has stayed afloat thanks in part to her partnership with WeeCare, a Marina Del Rey, venture-backed company that has been connecting essential workers to childcare providers.

As the pandemic has worn on, about half of the nation's childcare centers have closed and about a third of childcare homes have shuttered, according to a survey by the National Association for the Education of Young Children. Meanwhile, half of the employees that made up the industry are furloughed or out of a job.


That could be a major problem in California as everyone from distributors to retail sales clerks return to the workplace on Friday. Safety restrictions have severely cut how many children some facilities can take. So, parents of young children desperate to go back to work may find themselves not only jittery about returning a child to daycare, but there simply may not be room for them.

And the winnowing capacity could strain the budgets of many care facilities with high rent costs and that were already operating on thin margins.

"We don't know what's going to happen next," Metry said. "We are waiting for all this to pass."

Metry's daycare Wonderland WeeCare can accommodate 14 children, but she's only been taking care of three since the outbreak.

Childcare Providers Are Getting a Lifeline From L.A. Startup WeeCarePhoto courtesy of WeeCare

In Los Angeles, childcare facilities have been able to stay open during the pandemic for essential workers, but with parents staying home more than half of centers closed. Meanwhile, many smaller home daycare centers like Metry's remained open.

"A number of the programs that have closed will not be able to reopen once the pandemic has subsided," said Rhian Evans Allvin, chief executive of the National Association for the Education of Young Children. She added that there was already a shortage of daycare before the pandemic swept the nation, and it may only get worse.

"What we don't know is if the overall supply lessens dramatically, how many providers will be left?" she said. "I would imagine that overall there will continue to be far more demand than there is supply."

The Center for American Progress has estimated the pandemic could eliminate as many as 4.5 million childcare slots nationwide.

"I think you could make the argument that larger providers can weather the storm longer because of how they're financed, but we've not been through this before," said Evans Allvin. "So I don't know."

Metry has been able to survive in part because of her association with WeeCare.

WeeCare CEO Jessica ChangPhoto courtesy of WeeCare.

Founded in 2017 by Jessica Chang, the company takes care of the administrative tasks for home daycare, helping with marketing and other functions. The service helps keep the costs low for the provider, making the service more affordable for parents. Since the COVID outbreak, it has helped ensure that everyone's temperature is checked through video monitoring.

The company, which raised a seed round of $4.2 million led by Social Impact in 2018, is one of two working with Los Angeles Mayor Eric Garcetti's office to find daycares for essential workers.

Garcetti has offered a $100 stipend per shift for qualified hospital employees needing care. The program has provided a steady stream of parents knocking at the door of Chang's network of homecare providers.

It's given Metry some income as her other clients are still at home. Meanwhile, her mother brokered an agreement with the bank to defer mortgage payments. And though she hoped to secure a small business loan, she hasn't been able to get one.

Chang, who previously worked in private equity, started the business after having a child and finding quality care difficult to find. Her idea was to help small mom-and-pop schools — which make the bulk of the market — with billing, marketing, schedules and helping connections with parents. Her network of childcare providers spans 20 states and includes about 2,000 daycare providers, a number that's gone up since the pandemic.

COVID-19, she thinks, can actually help small homecare providers.

"Daycares are really well positioned right now; they naturally have smaller settings and naturally don't have a lot of people coming in and out," she said.

Under new state guidelines, childcare facilities cannot have more than 10 to a group of children and are required to be screened for illness. Larger centers that rely on a bigger population of children can have challenges making the economics pencil out as their capacity diminishes.

"I think what's going to end up happening is people will reevaluate childcare, and they're going to go back to daycare, like home daycare, as an option for their children," Chang said.

In the meantime, the small centers have other challenges.

"Supplies have been really hard for daycare providers," she said. "They're considered essential workers, but not according to Amazon."

Metry said she gets up early on the weekend to hunt for basic cleaning supplies such as paper towels and disinfectants that are still in short supply at stores.

Ahead of the loosening of stay at home orders, Gov. Gavin Newsom announced the opening of a state portal for childcare referrals that could help parents. And last month, he set aside $50 million for cleaning supplies and another $50 million for childcare vouchers.

Max Arias is president of the SEIU 99, which has been organizing childcare providers and sits on a statewide union coalition for childcare workers. His group has been trying to help find cleaning supplies for many who can't get what they need at Costco or other stores.

But he said in the long-term, the industry needs sustained help. He's been pressing Newsom to create an emergency childcare fund similar to Los Angeles that would accept matching funds from the corporations that are putting people back to work.

"There's going to be a high need for childcare as the economy reopens," he said. But with state finance officials projecting a $54 billion deficit, he's worried programs that rely on subsidized child care could lose much needed funds just as the system is at its weakest point. Cuts to the programs would mean "a lot of providers will have to close and a lot of families will lose access to the subsidized childcare."

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🏰 Disney's Epic Investment Stands Out Amidst Gaming Industry Layoffs

Christian Hetrick

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

🔦 Spotlight

In the midst of widespread gaming industry layoffs, a glimmer of positive news emerges as Disney announces a significant move: a $1.5 billion investment in Epic Games. 🏰💰🐭

Image Source: Disney

Disney's $1.5 billion investment in Epic Games, disclosed late Wednesday, signals a strategic alignment aimed at expanding the success of "Fortnite." The deal enhances Epic's growth prospects after financial setbacks, including layoffs, and strengthens the partnership between the two companies. With Disney gaining a larger equity stake in Epic, the collaboration will broaden the integration of beloved Disney franchises like Marvel, Star Wars, Pixar, and Avatar into the game, potentially boosting its appeal and longevity. This significant investment underscores Disney's commitment to interactive entertainment and signifies a shift towards games as a primary revenue stream, aligning with the growing trend of digital engagement among younger demographics. Moreover, the potential for crossover sales of physical Disney products within "Fortnite" and the exploration of new content distribution channels are just some of the opportunities arising from this partnership.

For LA tech, the Disney-Epic Games partnership represents a validation of the region's burgeoning tech and gaming ecosystem. The substantial investment in Epic, who maintains a large Los Angeles office with 1,000+ employees (according to LinkedIn), reflects confidence in the LA’s talent pool and innovation potential. Additionally, this partnership between two industry giants fosters an environment for further collaboration, investment, and growth within LA's tech sector. As Disney and Epic Games deepen their ties and explore new avenues for content integration and distribution, it not only elevates the prominence of LA as a tech hub but also stimulates economic growth and job creation in the region. This partnership highlights LA's unique position as a hub where technology and entertainment converge. With its ability to integrate diverse industries, LA is driving innovation and expansion in digital entertainment. 🚀💸🎮

🤝 Venture Deals

LA Companies

  • ProducePay, a financing and marketplace platform for the fresh produce market, raised a $38M Series D led by Syngenta Group Ventures joined by Commonfund, Highgate Private Equity, G2 Venture Partners, Anterra Capital, Astanor Ventures, Endeavor8, Avenue Venture Opportunities, Avenue Sustainable Solutions, and Red Bear Angels. - learn more
  • Blush, an invite-only dating app that drives users to local businesses on dates, raised a $7M Seed Round from individuals like Naval Ravikant. - learn more
  • Mogul, a startup founded last year that provides an overview of an artist's royalty earnings and identifies areas where money is owed but has not yet been collected, raised a $1.9 million seed round from Wonder Ventures, United Talent Agency, AmplifyLA, and Creator Partners. - learn more
  • Avnos, a hybrid direct air capture startup, raised a $36M Series A led by NextEra Energy and joined by Safran Corporate Ventures, Shell Ventures, Envisioning Partners, and Rusheen Capital Management. - learn more
  • AI.fashion, startup whose mission is to help retailers enhance the online shopping experience by providing consumers with virtual try-ons and personalized fashion recommendations, raised a $3.6M Seed Round led by Neo. - learn more
  • Suma Wealth, startup that aims to demystify financial topics and provide culturally relevant content, virtual experiences, and resources to help Latino users navigate financial challenges and opportunities, raised a $2.2M Seed Round . Radicle Impact led, and was joined by Vamos Ventures, OVO fund and the American Heart Association Impact Fund. - learn more
  • 222, a startup that helps users discover their city and meet new people through unique social experiences, raised a $2.5M Seed Round. Investors included 1517 Fund, General Catalyst, Best Nights VC, Scrum Ventures, and Upfront Ventures. - learn more
  • LimaCharlie, a security operations cloud platform, raised a $10.2M Series A led by Sands Capital. - learn more
  • Polycam, an app that uses a smartphone’s sensors to capture 3D scans of objects, raised an $18M Series A co-led by Left Lane Capital and Adjacent, and joined by Adobe Ventures and individuals like Chad Hurley and Shaun Maguire. -learn more.

LA Venture Funds

Actively Raising

  • ReelCall, Inc., an entertainment technology company focused on powerful apps and platforms that help build and maintain the professional network of connections vital to career growth, is raising a $850K Pre-Seed Round. - learn more
  • CZero, a startup building software to decarbonize logistics for logistics businesses and goods business through a vetted marketplace and optimization software. - learn more
  • Couri, a technology startup addressing last-mile delivery issues, is raising a $450K Pre-Seed Round at a $2.2M post money valuation. - learn more
  • Sweetie, a marketplace to help people plan date nights, is raising a $1.5M Pre Seed Round. - learn more
  • StartupStarter, an investment platform that provides real-time data and analytics on startups, is raising an $850K Angel Round. - learn more

If you’re a founder raising money in Los Angeles, give us a shout, and we’d love to include you in the newsletter!

Venture Waves, Climate Tech Wins, and Silicon Beach's Ongoing Evolution

Christian Hetrick

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

Anduril Seeks $1.5B in VC Funds

Defense company Anduril Industries Inc., based in Costa Mesa and founded by Palmer Luckey, is seeking to raise $1.5 billion in fresh funds to boost its valuation to $12.5 billion or more, according to sources quoted by The Information. This fundraising effort, if successful, would mark one of the largest venture capital rounds of the year.

Image Source: Anduril

Anduril recently secured a contract to develop and test small unmanned fighter jet prototypes under the Air Force’s Collaborative Combat Aircraft (CCA) program, beating out major defense companies like Boeing, Lockheed Martin, and Northrop Grumman. Alongside General Atomics, Anduril will design, manufacture, and test these aircraft, with a final multibillion-dollar production decision expected in fiscal year 2026. This program aims to deliver at least 1,000 combat aircraft to fly in concert with manned platforms and is part of the Air Force’s Next Generation Air Dominance initiative. Central to Anduril’s success in this contract is the Fury autonomous air vehicle, acquired through the purchase of Blue Force Technologies. This victory underscores Anduril's rapid advancement in the defense sector, aligning with Luckey's vision of building faster and more cost-effective defense assets. - learn more

Los Angeles Ranks Number 1 in Emerging Climate Tech Hub

The 2024 Emerging Climate Tech Hubs Report by Revolution highlights Los Angeles as a burgeoning center for climate tech innovation. LA's growth in this sector is driven by its diverse talent pool, strong research institutions, and a culture of environmental consciousness. The city's unique mix of legacy industries, such as entertainment and aerospace, alongside emerging tech companies, positions it as a pivotal player in the climate tech landscape. This shift reflects a broader trend of decentralized climate tech funding across the U.S., reducing the historical dominance of California's traditional hubs. - learn more

Silicon Beach: Looking Back, Moving Forward

Assessing the overall health of the startup market is challenging, especially as venture capital funding has decreased by an average of 61% from 2021 to 2023 across the top VC markets in the US. Markets with robust ecosystems in AI, SaaS, Biotech, Healthtech, and Fintech appear to be weathering the downturn better than those focused on Consumer and Gaming industries, areas where Los Angeles traditionally excels.

Percent Change In VC Funding By Region

CB Insights

LA Times paints a rather bleak outlook on the Los Angeles tech scene noting venture capital funding in Greater Los Angeles plummeted 73% from 2021 to 2022. Silicon Beach, once a vibrant tech corridor, currently faces high vacancy rates and lacks late-stage financiers, especially in the AI sector. However, there are positive signs, including growth in aerospace startups and increased venture capital investment in early 2024, suggesting a potential rebound for LA's tech ecosystem.

While LA may not be exceeding expectations during this period, its tech ecosystem warrants a nuanced evaluation, given the broader market dynamics and its strong performance in specific sectors. Reach out to us with your thoughts.

🚀 SpaceX gears up for another stellar year, active raises, and more

Christian Hetrick

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

Happy Friday Los Angeles! You made it through the first week of 2024!

🔦 Spotlight

Elon Musk may be a divisive (albeit entertaining) figure, but the continued success of SpaceX is pivotal for the aerospace industry in Los Angeles and more broadly around the world.

Image Source: SpaceX webcast

What happened with SpaceX in 2023?

  • Elon Musk challenged Facebook founder, Mark Zuckerberg to a cage fight.
  • SpaceX launched 96 successful missions with its Falcon series of rockets, a 57% increase over its previous annual record.
  • SpaceX conducted two test flights of the largest and most powerful rocket ever built, Starship.
  • Roughly two-thirds of SpaceX's launches in 2023 were devoted to building out Starlink, the company's satellite-internet megaconstellation.
  • Isaacson’s Elon Musk biography was published in September including everything from Musk’s tumultuous relationship with his father to his work ethic and “demon mode”.

Moving forward what can we expect from SpaceX and its controversial founder? Continued innovation pushing the aerospace industry to new limits? Yes. More drama? Without a doubt.

Here is some of what is to come in 2024:

🤝 Venture Deals

Just Announced

Check back next week!

LA Exits

  • CG Oncology, an Irvine, CA-based developer of immunotherapies for bladder cancer, filed for a $100M IPO. It plans to list on the Nasdaq (CGON) with Morgan Stanley as left lead underwriter, and has raised around $317m in VC funding. - learn more
  • McNally Capital agreed to sell Advanced Micro Instruments, a Costa Mesa, CA-based maker of gas analyzers and sensing technologies, to Enpro (NYSE: NPO). - learn more

Actively Raising

  • ReelCall, Inc., an entertainment technology company focused on powerful apps and platforms that help build and maintain the professional network of connections vital to career growth, is raising a $850K Pre-Seed Round. - learn more
  • CZero, a hard-tech startup that is developing a technology for decarbonizing natural gas, is raising a $1.5M Seed Round. - learn more
  • Couri, a technology startup addressing last-mile delivery issues, is raising a $450K Pre-Seed Round at a $2.2M post money valuation. - learn more
  • Sweetie, a marketplace to help people plan date nights, is raising a $250K Angel Round. - learn more
  • StartupStarter, an investment platform that provides real-time data and analytics on startups, is raising an $850K Angel Round. - learn more

If you’re a founder raising money in Los Angeles, give us a shout, and we’d love to include you in the newsletter!

📅 LA Tech Calendar

Sunday, January 7th

Wednesday, January 10th

  • Startup Cafe: Networking with a Kick - Entrepreneurs, Startups, and Tech Enthusiasts join together to meet and connect with like-minded people, industry professionals and investors, while enjoying a nice cup of coffee in Venice at The KINN. This week’s interactive discussion about AI’s evolution in entertainment will feature Dr. Sam Khoze and Rachel Joy Victor.
  • Venice Tech Happy Hour- Join Startup Coil and FoundrHaus Wednesday evening and enjoy the sunset from the rooftop, grab a bite overlooking Abbot Kinney, and mingle with other tech enthusiasts and entrepreneurs by the bar on the patio.

Have an awesome event coming up? Reach out to be featured on next week’s Newsletter!

📙 What We’re Reading

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