Who To Watch Among LA's Booming Ecommerce Startups

Sarah Favot

Favot is an award-winning journalist and adjunct instructor at USC's Annenberg School for Communication and Journalism. She previously was an investigative and data reporter at national education news site The 74 and local news site LA School Report. She's also worked at the Los Angeles Daily News. She was a Livingston Award finalist in 2011 and holds a Master's degree in journalism from Boston University and BA from the University of Windsor in Ontario, Canada.

Who To Watch Among LA's Booming Ecommerce Startups
Image by Markus Mainka/ Shutterstock

Ecommerce companies are some of Los Angeles hottest startups.

Companies like GOAT, an online marketplace for sneakerheads, are reeling in cash in a white-hot market. GOAT raised $195 million in a late-stage funding round in June, more than doubling its valuation to $3.7 billion. Tapcart, a Shopify-based mobile app, raised $50 million in a Series B funding round also in June. Popshop Live, a livestream shopping platform, announced a Series A round of funding in July that valued the company at $100 million. Italic, an online retailer that sells luxury goods at cost, had a $26.9 million infusion of cash through an early stage funding round in April.


Venture capitalists poured $384 million into ecommerce companies so far this year, according to PitchBook data, with more money being spent so far in 2021 than all of 2020.

In Los Angeles, where there has always been a healthy amount of ecommerce startups, there's an emerging new evolution with more innovation in the marketplace, investors say.

We asked the region's top VCs in our dot.LA sentiment survey to identify the top L.A.-based ecommerce companies. Here's what they told us, ordered by how often each was mentioned.

GOAT

GOAT

Founded in 2015, GOAT has ascended the ranks of L.A.'s startup scene. GOAT hit unicorn status in late 2020, and just about doubled its valuation to $3.7 billion by June this year.

The marketplace platform lets shoe collectors sell and resell shoes and other luxury items. The company sold over $2 billion in merchandise in 2020.

Started by a pair of sneakerheads from UCLA, the company has become a leader in the rising industry of sneaker sales that is projected to rise from $2 billion in global worth to around $30 billion by 2030.

Tapcart

Tapcart

Founded in 2017, Santa Monica-based Tapcart is hoping to ride the wave of online and mobile ecommerce. Its software allows companies to transition Shopify-based stores into mobile apps, and boasts features that drive customer retention.

Tapcart raised $50 million in June. Founded by Eric Netsch and Sina Mobasser, apps created using the SaaS-based service processed over $1.2 billion in sales over the past year.

"The pandemic really just reassured the path that the world was already on," Netsch has told dot.LA. "We knew that mobile was taking the world by storm far before the pandemic happened."

Popshop LIve

Popshop Live

A sudden shift in pandemic-related restrictions lured companies to Popshop's livestreaming platform, allowing Popshop to reach a $100 million valuation by July.

Popshop's app allows stores to livestream from their websites and promote their product. Sales are made directly through the app. The company took inspiration from the Chinese market, where livestream vending platforms was successful, and is hoping the model translates to the U.S. market.

Petra Griffith, managing director of Wedbush Ventures, said she named Popshop Live as one of the most interesting ecommerce companies (that she does not invest in) because of its dynamic founder, Danielle Li.

"I think a lot about commerce and the future of commerce," she said. "You see the popularity in Asia, [where you] have influencers and video and live interaction, kind of like a live QVC that you can interact with is I think is really compelling."

Parachute

Launched in 2014 as an online-only, direct-to-consumer brand, Parachute began as a high-end bedding company. Since then it has expanded into other home goods products and has opened brick-and-mortar stores across the U.S., including one in Venice and another in Silver Lake.

Ariel Kaye, founder and CEO, launched Parachute's first mattress line in 2019, and the company has created a following among millennials with its bedding and bath linens made from high-quality materials.

Kaye said Parachute's home goods products fared "extremely well" during the pandemic as people spent money to "refresh" or redecorate their living spaces or moved into new homes.

"As a digitally native brand, we were able to meet our customers where they are. We have been very lucky to connect with new and existing customers to offer products as well as services designed to help them enjoy their home," Kaye said in an email.

Italic

Founded in 2018, Italic is a subscription based, direct-from-manufacturer company. The Los Angeles-based startup partners with manufacturers that work with big-name luxury brands to offer the same type of goods without the cost of branding.

CEO Jeremy Cai said he doesn't see Italic as a traditional ecommerce company because it takes nearly no inventory risk, but rather makes money when customers buy products, using that to pay the manufacturer and taking a cut of it. He said the business is more oriented toward technology, operations and product development, rather than sales and marketing.

"I think the excitement around our business is that we're fundamentally doing something different from a business standpoint and that we have pretty deep customer loyalty," Cai said.

While Italic is membership based, Cai said the company plans to allow customers who aren't members to make purchases later this year.

"In my mind, the future is really like a bifurcation of value-driven shopping and branded shopping," he said. "What we're mostly focused on is driving value on the product side to the customer."


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LA Venture: Emilio Diez Barroso On Why Everyone Isn’t Cut Out To Be A Founder

Minnie Ingersoll
Minnie Ingersoll is a partner at TenOneTen and host of the LA Venture podcast. Prior to TenOneTen, Minnie was the COO and co-founder of $100M+ Shift.com, an online marketplace for used cars. Minnie started her career as an early product manager at Google. Minnie studied Computer Science at Stanford and has an MBA from HBS. She recently moved back to L.A. after 20+ years in the Bay Area and is excited to be a part of the growing tech ecosystem of Southern California. In her space time, Minnie surfs baby waves and raises baby people.
LA Venture: Emilio Diez Barroso On Why Everyone Isn’t Cut Out To Be A Founder
Photo: provided by LAV

On this episode of the LA Venture podcast, Bold Capital Partner Emilio Diez Barroso talks about his entrepreneurial journey, what led him to become an investor and shares the qualities he looks for when investing in companies.

Bold Capital is a Series A fund that primarily focuses its investments in deep tech and biotech companies. But, like other funds, they make excuses to invest in other companies every now and then.

“We're always interested in things that have the potential to truly transform how things are done and uplift humanity,” he said.

In his experience with investing in early stage startups, Diez Barroso said “humility and vulnerability are assets and qualities in the journey, and you don’t feel like you have to have it all together with your investors.”

Which is why he looks for people who have “this capacity to take full responsibility for how they show up and they have a vision and they have the willingness to go and execute it.”

In addition to his work at Bold Capital, Diez Barroso also runs two family offices which provide him with a surplus of knowledge in the investment space.

“I wear two very different hats,” he said, “and I invest very differently when I'm investing for myself, when I'm investing for my family, and when I'm investing for LP’s.”

But before becoming an investor, Diez Barroso got his entrepreneurial start when he arrived in Los Angeles. He admits that he failed plenty of times because unlike in Mexico, where Diez Barroso grew up, he didn’t have the same access to the contacts or resources of his family business.

“I would say yes to every opportunity that came my way,” he said, “I had started or partnered with someone and co-founded and most of them I had no idea what I was doing, so most of them really failed and a few got lucky enough to succeed.”

After learning how these startups worked and investing his own capital into several companies, he soon realized he was a much better investor than an operator.

“I think we're not all cut out for the journey,” he said, “and I don't think we should all be cut out for that journey. I think that it takes a very different character to start something from scratch.”

Throughout his own journey, Diez Barroso acknowledged that he struggled with his own identity and need to feel like the smartest person in the room. Once he better understood his own motivations, Diez Barroso was able to see that he was chasing the next reward, the next carrot.

“It's fun to close the deal and it's fun to grow the business,” Diez Barroso said. “But what I hadn't been in contact with is how much of my fuel was derived from trying to outrun the idea of not feeling good enough.”

Of course, he’s not alone. “I see a lot of entrepreneurs, activists all across fields and I can tell the difference when they're running from this fuel that is sort of very quick burning because there is an anxiety that oftentimes makes us narrow minded,” Diez Barroso said. “We are so attached to what we think should happen that we leave very little space for the possibilities.”

dot.LA Reporter Decerry Donato contributed to this post.

Click the link above to hear the full episode, and subscribe to LA Venture on Apple Podcasts, Stitcher, Spotify or wherever you get your podcasts.

This podcast is produced by L.A. Venture. The views and opinions expressed in the show are those of the speakers and do not necessarily reflect those of dot.LA or its newsroom.

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David Shultz

David Shultz reports on clean technology and electric vehicles, among other industries, for dot.LA. His writing has appeared in The Atlantic, Outside, Nautilus and many other publications.

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