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XCoronavirus Chaos Racks Companies Along the West Coast
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.

As the deadly coronavirus unnerves markets around the world and sends officials scrambling to prepare for a pandemic, retail giants like Amazon and startups alike are grappling with production slowdowns without a clear end in sight as the fast-moving virus spreads through Europe and the Middle East.
Supply chains across the West Coast are in disarray as billions of dollars worth of Chinese goods are delayed and travel-related business slump even as the virus slows in China. And major players like Apple and Expedia are warning of hits to their bottom line. Meanwhile, small businesses and startups like Los Angeles-based DropLabs, which operates with a lean inventory, are already feeling the pain.
"We are out of inventory," said Susan Paley, chief executive of Echo Park-based DropLabs, a bluetooth connected sneaker that sends vibrations into foot nerves to amplify a sound experience.
At the nation's largest hub for cargo trade with China — the Los Angeles port — officials are anticipating a 20 to 25% drop in trade this month. Long Beach, the nation's second largest port, expects a 10% fall. And Seattle and Tacoma port complex, the nation's fifth busiest for cargo, officials have been logging cancellations from vessels bound from China.
Supply chain experts say factories around the country remained shuttered or below capacity with workers coming from rural areas still stuck at home after the Lunar New Year. Factories normally shut down during the holiday for several weeks but the virus hit just as the holiday was ending.
Over 2,700 people have died from the novel coronavirus. And while there are signs of the virus slowing in China, outbreaks in Europe and new cases in Africa have alarmed the World Health Organization. The Centers for Diseases Control and Prevention said on Tuesday it was preparing for a pandemic and warned schools and businesses to prepare for interruptions. Some medical officials suggest that virus is seasonal, but it's too early to say. Orange County on Tuesday joined San Diego in San Francisco in declaring a local health emergency.
"It's very scary what's developing," said Stephen Cheung, president of the World Trade Center in Los Angeles. "Before it was about what is happening in China. But this is a completely different story now about 'how do we get ready for a pandemic'."
Already, Chinese tourism is down, he said, along with the luxury shoppers it brings.
At the Seattle-based Jet City Repair, owner Matt McCormick has had to reshuffle orders. He normally relies on Chinese made components for the more than 22,000 repairs he makes each year but with supplies short, he had to switch to U.S. manufacturers that he calls more expensive and lower quality.
Chinese production fuels the global economy, as does its consumption. The Communist nation has become the world's factory producing everything from shoes (70% of all shoes sold in the U.S. come from China) to auto parts and cell phones. Their interconnected infrastructure is unparalleled and the slowdown of output has ricocheted across the global economy - from hotel chains and airlines to car manufactures and medical suppliers.
At West Coast ports from Los Angeles to Seattle, long the nation's gateway to Asia, officials said they are getting numerous cancelations from vessels that would normally ferry millions of toys, car parts, electronics and other products.
DropLabs told customers their just-launched shoes that retail for $449 will be delayed, as it waits for all their contractors to get online. "The problem that you have is that right now even if some parts of your supply chain is online, other parts aren't," said Paley, a former executive at Beats by Dr. Dre.
A load of 700 DropLabs' sneakers are sitting in China waiting for a final component, but most of the workers for the factory responsible for it are from Hubei, the province where Wuhan is located - the epicenter of COVID-19, as the virus is known. And she has no idea when that factory will come back online.
"There really is chaos and confusion and a lack of insight to when things are going to be ok," said Paley, who canceled planned trips to China this month. "Everyone is dealing with and everyone is feeling the pain."
Anthony J. DiBenedetto, a lawyer at Fenwick & West said he's been telling his clients to make sure that employees aren't traveling to China — and if they do, keep them away from the office. The freeze on travel has also impacted venture investments. PItchBook recorded a sharp decline in venture capital investments in China compared to the same period last year.
Worldwide, about 81,000 cases of the virus have been reported with 77,780 in China.
What's complicating matters is the lack of reliable information coming out of China, said Nick Vyas, executive director of USC Marshall's Center for Global Supply Chain Management. He expects the ripple effects to continue even after the virus is resolved.
"Long term this will be a big lesson to a lot of companies small, medium and large to have contingencies," he said.
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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.
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This Week in ‘Raises’: Improvado Hauls $22M, Clearlake Launches $14B Fund
Kristin Snyder is an editorial intern for dot.la. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.
This week in “Raises”: A pair of Web3 platforms for gamers landed funding, as did a Manhattan Beach medical startup looking to bolster primary care via nurse practitioners. Meanwhile, a Santa Monica-based investment firm launched its seventh fund with more than $14 billion in dry powder.
Venture Capital
Improvado, a marketing data aggregation platform, raised $22 million in a Series A funding round led by Updata Partners.
Web3 gaming platform FreshCut raised $15 million in funding led by Galaxy Interactive, Animoca Brands and Republic Crypto.
Medical startup Greater Good Health raised $10 million in a funding round led by LRVHealth.
Joystick, a Web3 platform for gamers and creators, raised $8 million in seed funding.
Open source data protection company CipherMode Labs raised $6.7 million in seed funding led by Innovation Endeavors .
Mobile phone charging network ChargeFUZE raised $5 million in seed funding led by Beverly Pacific, TR Ventures, VA2, Jason Goldberg and Al Weiss.
Polygon, a startup aiming to better diagnose children with learning disabilities, raised $4.2 million in seed and pre-seed funding led by Spark Capital and Pear VC.
Pique, a virtual women's sexual health clinic, raised $4 million in a seed funding round led by Maveron.
Psudo, a sneaker startup that utilizes recycled water bottles and 3D sublimation printing to create its shoes, raised $3 million in a seed funding round led by SternAegis Ventures.
Funds
Santa Monica-based investment firm Clearlake Capital Group raised $14.1 billion for its seventh flagship fund.
Raises is dot.LA’s weekly feature highlighting venture capital funding news across Southern California’s tech and startup ecosystem. Please send fundraising news to Kristin Snyder (kristinsnyder@dot.la).Kristin Snyder is an editorial intern for dot.la. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.
LA Tech ‘Moves’: New Head of Originals at Snap, New President at FaZe Clan
Kristin Snyder is an editorial intern for dot.la. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.
“Moves”, our roundup of job changes in L.A. tech, is presented by Interchange.LA, dot.LA's recruiting and career platform connecting Southern California's most exciting companies with top tech talent. Create a free Interchange.LA profile here—and if you're looking for ways to supercharge your recruiting efforts, find out more about Interchange.LA's white-glove recruiting service by emailing Sharmineh O’Farrill Lewis (sharmineh@dot.la). Please send job changes and personnel moves to moves@dot.la.
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FaZe Clan brought on Zach Katz as the gaming and media company’s new president and chief operating officer. Katz was previously the chief executive officer of the music tech investment fund Raised in Space Enterprises.
TikTok brand factory LINK Agency promoted Dustin Poteet to chief creative officer. Poteet was previously creative director at the firm.
Livestream shopping platform Talkshoplive hired Tradesy co-founder John Hall as its chief technology officer. Universal Music Group Nashville's former vice president of digital marketing, Tony Grotticelli, also joins the company as vice president of marketing.
Anjuli Millan will take over as head of original content at Snap after three years of overseeing production for the division.
Tech and media company Blavity hired Nikki Crump as general manager of agency. Crump joins the company from Burrell Communications Group.
O'Neil Digital Solutions, which provides customer communications and experience management for the health care industry, hired Eric Ramsey as national account sales executive. Ramsey joins from T/O Printing.
Investment firm Cresset Partners named Tammy Funasaki as managing director of business development. Funasaki previously served as head of investor relations for Breakwater Management.
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Kristin Snyder is an editorial intern for dot.la. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.
Snapchat’s New Controls Could Let Parents See Their Kids’ Friend Lists
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.
Snapchat is preparing to roll out enhanced parental controls that would allow parents to see who their teenagers are chatting with on the social media app, according to screenshots of the upcoming feature.
Snap’s parental controls.
Courtesy of Watchful.
Snapchat is planning to introduce Family Center, which would allow parents to see who their children are friends with on the app and who they’ve messaged within the last seven days, according to screenshots provided by Watchful, a product intelligence company. Parents would also be able help their kids report abuse or harassment.
The parental controls are still subject to change before finally launching publicly, as the Family Center screenshots—which were first reported by TechCrunch—reflect features that are still under development.
Santa Monica-based Snap and other social media giants have faced mounting criticism for not doing more to protect their younger users—some of whom have been bullied, sold deadly drugs and sexually exploited on their platforms. State attorneys general have urged Snap and Culver City-based TikTok to strengthen their parental controls, with both companies’ apps especially popular among teens.
A Snap spokesperson declined to comment on Friday. Previously, Snap representatives have told dot.LA that the company is developing tools that will provide parents with more insight into how their children are engaging on Snapchat and allow them to report troubling content.
Yet Snap’s approach to parental controls could still give teens some privacy, as parents wouldn’t be able to read the actual content of their kids’ conversations, according to TechCrunch. (The Family Center screenshots seen by dot.LA do not detail whether parents can see those conversations).
In addition, teenage users would first have to accept an invitation from their parents to join the in-app Family Center before those parents can begin monitoring their social media activity, TechCrunch reported.
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.