Coronavirus Updates: Headspace Makes App Free to Unemployed; Cali's Economic Fallout Eclipses Great Recession

Coronavirus Updates: Headspace Makes App Free to Unemployed; Cali's Economic Fallout Eclipses Great Recession

Here are the latest headlines regarding how the novel coronavirus is impacting the Los Angeles startup and tech communities. Sign up for our newsletter and follow dot.LA on Twitter for the latest updates.

  • Newsom: Employment fallout from the coronavirus pandemic has exceeded the Great Recession
  • Headspace makes meditation app free for the nation's 23 million unemployed


    Newsom: Employment fallout from the coronavirus pandemic has exceeded the Great Recession

    live.staticflickr.com

    Gov. Gavin Newsom said Thursday that the employment fallout from the coronavirus pandemic has exceeded the economic crisis that brought on the Great Recession. Some 4.6 million Californians have filed jobless claims, and has forced the stater to borrow billions of dollars from the federal government to cover claims. "These unemployment numbers are jaw dropping," Newsom said at a press conference. "We are at a time that is simply unprecedented."

    Newsom said the state will need $43.8 billion to cover unemployment claims in the new year, a 650% increase over what was originally predicted. The federal government controls a trust that helps states cover jobless benefits during a recession. The governor said the state's unemployment rate is expected to peak at more than 24.5% this year. But, the rate for the whole year will hover at about 18% -- still significantly higher than the 12.3% peak during the height of the economic crisis.

    Headspace makes meditation app free for the nation's 23 million unemployed

    Shutterstock

    Headspace, the Santa Monica-based meditation and wellness app, is giving the nation's unemployed workers a free year to help them during the COVID-19 pandemic. The Labor Department reported that jobless claims were up by another 2.98 million last week, bringing the total unemployment claims number to a massive 22.83 million people.

    "The current state of unemployment in America has become an alarming crisis," the company said in its pitch to get people to sign up. "To help those affected, we're offering a full year of Headspace Plus for free. Discover meditation and mindfulness tools to help you feel less stressed, more resilient, and kinder to yourself." The company was previously working with the City of Los Angeles in offering residents a free trial. Headspace requires that people list their last employer and date of separation, but it was not known how the company would verify that information. There are more than 1,200 hours of meditation content on the app.

    🎬 Paramount and Skydance Are Back On
    Image Source: Paramount

    Happy Friday Los Angeles! Hope you all had a fantastic Fourth!!

    🔦 Spotlight

    Paramount and Skydance Media have rekindled talks to merge after negotiations abruptly halted in June. The proposed deal, contingent on approval from Paramount’s board, aims to combine Paramount’s extensive media holdings—including CBS, MTV, and Nickelodeon—with Skydance’s film expertise showcased in hits like "Top Gun: Maverick." This merger signals a potential transformation in the media landscape, positioning the new entity to compete more effectively amid challenges from streaming services and the decline of traditional cable TV.

    Led by Shari Redstone, Paramount’s controlling shareholder via National Amusements, the deal represents a pivot towards revitalizing Paramount’s strategic direction amidst financial struggles and shareholder concerns. The involvement of major investors like RedBird Capital Partners and David Ellison underscores the financial backing aimed at stabilizing Paramount’s operations and addressing its $14 billion debt burden. Importantly, the agreement includes provisions to protect National Amusements from potential legal challenges, addressing previous hurdles that stalled earlier negotiations.

    The deal also includes a 45-day period for Paramount to explore alternative offers, highlighting continued interest from other potential buyers like Barry Diller’s IAC and media executive Edgar Bronfman Jr. This flurry of activity underscores the significant stakeholders’ interest in Paramount’s future and its potential as a key player in a rapidly evolving media industry.


    🤝 Venture Deals

    LA Companies

    • Sidecar Health, a startup that offers personalized health insurance plans to businesses that allow members to see any doctor and pay directly at the time of service, raised a $165M Series D led by Koch Disruptive Technologies. - learn more

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    😊🚘 Rivian's $5 Billion Lifeline

    🔦 Spotlight

    Volkswagen announced on Tuesday a significant investment of up to $5 billion in Rivian, a struggling electric truck manufacturer known for its vehicles' distinctive smiley-face design reminiscent of Volkswagen's iconic Beetle. This partnership marks a unique collaboration between the world's second-largest automaker and a startup grappling with profitability challenges akin to those faced by Tesla. Volkswagen's infusion of $1 billion initially, potentially rising to $5 billion pending regulatory approval, underscores its strategic pivot towards enhancing its electric vehicle (EV) software capabilities, an area where analysts believe the company has lagged.

    For Rivian, which has received acclaim for its electric trucks and SUVs but struggles with production ramp-up and financial losses, the investment offers crucial financial backing. The company plans to utilize Volkswagen's expertise in manufacturing, leveraging the German automaker's annual production of nearly 10 million vehicles. This alliance aims to bolster Rivian's efforts to launch new models like the R2 midsize SUV and complete its Georgia factory, paused earlier this year to conserve funds. Rivian's stock surged upwards of 40% following the announcement, reflecting investor optimism in the company's future prospects.

    Despite their differing corporate cultures—Volkswagen's traditional, structured approach contrasted with Rivian's agile tech startup ethos—the CEOs of both companies expressed mutual admiration and shared goals during the partnership announcement. The collaboration is expected to yield EV software solutions benefiting Volkswagen's various brands, potentially including Audi and Porsche, while allowing Rivian to maintain its brand identity and separate vehicle marketing strategies. This strategic partnership between Volkswagen and Rivian not only promises to revolutionize the electric vehicle market but also highlights the potential for collaboration between established automakers and innovative startups in Southern California, where Rivian is based. Here’s to hoping these smiling cars will balance out some of the inevitable LA road rage.

    🤝 Venture Deals

    LA Companies

    • HeyGen, a startup that allows users to generate videos with AI-created avatars that can lip-sync to provided audio, making it easier for businesses to create engaging video content, raised a $60M Funding Round at a $500M post-money valuation. The deal was led by Benchmark, with Conviction, Thrive Capital, and Bond Capital also stepping up. - learn more
    • Pomerium, a startup that provides a secure access platform that dynamically verifies user identities to ensure authorized access to applications and services, raised a $13.8M Series A round led by Benchmark and including previous investors Bain Capital, Haystack, and SNR. - learn more
    • Etched, a maker of transformer-specialized AI chips, raised a $120M Funding Round. - learn more
    • Rocketlane, a customer onboarding platform, raised a $24M Series B co-led by 8VC, Matrix Partners India, and Nexus Venture Partners. - learn more
    • Sift, a developer of unified observability solutions for hardware sensor data, raised a $17.5M Series A led by GV. - learn more
    • LOST iN, a travel media brand, raised a $4M Seed Round led by MaC Venture Capital. - learn more

    LA Venture Funds


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