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XElevation Ventures Is Raising $50M for a Climate-Focused Tech Fund in SoCal
Deirdre Newman
Deirdre Newman is an Orange County-based journalist, editor and author and the founder of Inter-TECH-ion, an independent media site that reports on tech at the intersection of diversity and social justice.
Interest in electric cars is spiking as gas prices rise to their highest prices in years, but supply chain headaches and the lack of infrastructure such as charging stations are keeping the demand pent up. And, the longer-term effects on power grids will mean there will be lots to upgrade, even after the transition to cleaner technology, like electric vehicles, comes online.
Elevation Ventures, a new climate-focused venture firm in Orange County, is raising a $50 million fund to focus on technology that can provide new products and services. The fund will target seed-stage companies in SoCal, though it might also invest in a few Series A funding rounds. Check sizes will range from $500,000 to $3 million.
Elevation has partnered with two local organizations with deep roots in O.C.: business incubator Octane and Sustain SoCal, a network of professionals focused on clean tech development.
A VC Built By Consortium
Elevation Ventures Managing Partner Neal Rickner is an Orange County native who recently moved back to the area from Silicon Valley, where he was the COO of Makani Technologies, a company that developed airborne wind turbines. It was acquired by Google in 2013, and then eventually shut down by Alphabet, Google's parent company.
Elevation Ventures Managing Partner Neal Rickner.
Image courtesy of Neal Rickner
He also worked with what’s known as “X,” (formerly Google X), a research and development facility founded by Google, which now operates as a subsidiary of Alphabet.
”I’ve been through the ringer...up there,” he said. “I learned the best I could from the best innovators in the world."
But it wasn’t until Rickner did some serious reflection in 2020, that he decided to move back to Orange County. He had some informal conversations with members from Aliso Viejo-based Octane’s team in 2017, but it didn’t coalesce until 2020. Octane acted as the catalyst and facilitator, bringing in Sustain Socal. Elevation Ventures was formed.
Octane already has a track record in investing. In 2016, it partnered with Visionary Ventures, a VC firm that backs ophthalmology and aesthetic startups, which have a strong presence in Orange County.
The organization has both for-profit and nonprofit branches and serves SoCal’s general technology and medical technology ecosystems—connecting people, resources and capital. One of its initiatives is a four-month accelerator program called LaunchPad that gives local founders access to a slew of advisors and resources.
Sustain SoCal is a hub of climate, sustainability and environmental experts, with a presence at UC Irvine’s innovation center, The Cove. The network comprises thousands of experts; most have been involved with clean tech and/or climate tech for 20 years or more.
Elevation expects to make 15 to 20 investments from this first fund, over the next two to three years, Rickner said. Even before the first close of the first fund, expected this summer, Elevation is already writing checks through a type of investing known as a special purpose vehicle. Typically set up as an LLC or limited partnership company, SPVs make a single investment into just one company.
Rickner, Octane CEO Bill Carpou and Sustain SoCal CEO Scott Kitcher put together a mission statement for their new venture firm in the fall.
”The three of us bring together the core ingredients for a VC fund to succeed,” he said. “And, we complement each other well. We have different networks and skill sets, but we’re mission-aligned and collectively-aligned.”
The team hopes to raise around $20 million by the summer. It’s raised just over $10 million so far, Rickner said.
“The first commitments are all from SoCal and know Octane or SoCal well,” Rickner said, adding that they’re targeting high net-worth individuals and family offices.
Elevation recently also brought on longtime climate technology investor Rachel Payne and former Seeder Clean Energy co-founder Alex Shoer.
Early Investments
Elevation’s first investment, for which it raised more than $1 million, was in Los Angeles-based Veloce Energy. The startup runs a software platform and installation system to enhance the move to a decentralized, distributed energy grid that enables anyone to trade electricity on its networks.
Rickner said companies like Veloce can accelerate the shift to these decentralized power systems “faster and cheaper” than enormous electricity providers.
In late April, the firm made its second investment (also through an SPV) in Carbon Collective.
The Alameda-based startup enables employees to use their retirement funds to fight climate change by divesting from companies that contribute to climate change and to re-invest in companies working to combat the climate crisis.
“Venture deals move quickly,” Rickner said, in explaining why he opted to raise money quickly via SPV rather than waiting for the fund to close. “These first two deals were great opportunities. We had special access, and we didn't want to pass them up.”
Rickner declined to disclose the amount of either investment.
Photo by Tyler Casey on Unsplash
Next Industrial Revolution
It wasn’t an easy decision to leave Silicon Valley.
“Part of the allure for me was [the opportunity to] work on something I’ve been passionate about for a long time,” Rickner said.
He credits the pandemic and lockdowns that followed with inspiring him, like many others, to reflect on what was important.
“A lot of people woke up and decided we had to take better care of our environment, that climate change was happening,” he added. ”When you take time, you realize there are more floods and fires and extreme events, and it became personal to a lot of folks."
Elevation will have plenty of opportunities to invest close to home, Rickner noted. Orange County is home to some of the biggest names in electric vehicles, including electric pickup truck maker Rivian Automotive, which is headquartered in Irvine.
But it will also have local competition. Laguna Beach-based Keiki Capital launched in 2017 to invest in climate tech startups at the pre-seed and seed level.
Rickner sees the time we’re living in as a transition into the next industrial revolution—and he sees opportunities.
“90% of the world economy, as measured by country GDP, has committed to net zero,” he said, referring to several nations’ pledges to move to power sources that are carbon neutral.
More than half of the world’s corporate and financial institutions, as measured by revenue and assets under management, have committed to a net-zero approach, he added.
“The previous industrial revolutions produced many billionaires,” Rickner said. “And this one will do the same.”
Deirdre Newman
Deirdre Newman is an Orange County-based journalist, editor and author and the founder of Inter-TECH-ion, an independent media site that reports on tech at the intersection of diversity and social justice.
Ebay 2.0? Whatnot's $50M Bid To Take Auction Excitement to Livestream Video
09:00 AM | May 25, 2021
Photo by Thimo Pedersen on Unsplash
A few years ago, you went to eBay to bid on limited edition sports cards or out-of-print comic books. Then, livestreaming came to town.
Two weeks ago, one Pokemon collector dropped $17,500 on a Skyridge Charizard Holo card during a broadcasted event streamed live on Whatnot.
What began as a social app for collectors to swap stories and photos has ballooned into a digital stage for live auctions and unboxing videos. Since January, the Los Angeles tech startup has hired some 40 employees and leased a 10,000 square-foot office space in the Marina Arts District.
And on Tuesday — just a few months since its last big boost — the startup closed a $50 million Series B round.
Whatnot recently closed a $50 million Series B round.
"It's probably one of the fastest growing marketplaces we've ever seen," said Y Combinator's Anu Hariharan, who led the round.
It's been over a year since consumers moved online in droves and investors are still sinking millions into retail technology —livestream shopping especially.
L.A.-based Popshop Live was valued at $100 million last fall after an investor bidding war to lead its Series A. Talkshoplive, which hosts celebrities livestreaming about their memoirs and latest albums, scored seed capital in February from a venture firm backed by eBay's founder.
One Pokemon collector dropped $17,500 on a 1st Edition Shining Charizard card during a broadcasted event streamed live on Whatnot.
What gives? Hariharan said U.S. ecommerce has only embraced video in the last three to five years, and now it's everywhere. Even retailers like Home Depot introduced livestream demos and workshops during the pandemic.
Grant Lafontaine, the CEO and co-founder of Whatnot, brought the technology to a niche, well-connected community of online shoppers. He founded the company in 2019 with Logan Head, a former product manager at the online sneaker marketplace GOAT.
Their users are 18 to 32-year-old collectors who spend hours browsing eBay listings but crave something more interactive.
"They're on eBay because they're buying the collectibles, they're on Instagram to show them off," Lafontaine said. "They come to Whatnot because they can do both."
The company got its start as a social platform and marketplace — sans video livestreaming. That function came later, after a steady pool of users made checking Whatnot a daily habit.
"I was the first person to go live," Lafontaine said. "I sold out $5,000 worth of collectibles in two-and-a-half hours. The experience kind of spoke for itself. Anyone who saw it wanted to use it."
Other investors include Andreessen Horowitz, Animal Capital, musicians Ryan Tedder and DJ Skee with Min 10 and NFL players DeAndre Hopkins, Bobby Wagner and Jeremy Padawer. The company has raised $75 million to date.
Whatnot now boasts 15 categories of collectibles, from FunkoPops to sports cards (the most popular category on the app) to a few newer experimental verticals like vintage clothing. Within the next year, Lafontaine said he hopes to hit 30.
"For a young startup, it's always important to start with one or two categories, not with everything," said Hariharan. "What Whatnot has done really well in collectives will help them scale pretty much any product."
The app, she said, is on its way to becoming "eBay 2.0."
A previous version of this story stated Whatnot closed a $40 million Series B Round. The correct amount is $50 million.From Your Site Articles
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- Collectors Raises $100 Million, Rolls Out Rebrand - dot.LA ›
- Inside eBay's 'Wear Them Out' Sneaker Pop-Up Shop in LA - dot.LA ›
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Francesca Billington
Francesca Billington is a freelance reporter. Prior to that, she was a general assignment reporter for dot.LA and has also reported for KCRW, the Santa Monica Daily Press and local publications in New Jersey. She graduated from Princeton in 2019 with a degree in anthropology.
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francesca@dot.la
'I Don't Think Anybody Could Have Imagined What Actually Happened.' Former Consumer CEO Jeff Wilke on Building the Amazon Empire
07:00 AM | May 03, 2021
illustration by Eduardo Ramón Trejo
In March, Jeff Wilke quietly stepped away from Amazon, the company he was instrumental in building from an online book retailer to one of the most valuable and influential corporations in the world.
As CEO of Amazon Worldwide Consumer since 2016, he oversaw the company's vast retail business, Prime, the Amazon marketplace, Amazon stores, marketing and Whole Foods.
When Wilke joined Amazon in 1999 to oversee operations the company was doing about $2 billion of revenue a year. Now it brings in about $1 billion every day and last week announced its sales grew by an astonishing 44% year-over-year.
Wilke was long considered the second most important person in the company behind Amazon CEO Jeff Bezos, who shocked the world by announcing his own departure in February.
Bezos called Wilke his tutor and he was seen as a likely successor, but that job instead went to Andy Jassy, the chief executive of Amazon Web Services.
In a wide ranging conversation with dot.LA – among his first since leaving – Wilke says he has no regrets and felt it simply time to do something else.
Wilke also talked about what it was like to work for Bezos and his reaction to last month's failed unionization vote at an Amazon warehouse in Alabama.
This interview has been edited for length and clarity.
You left Amazon only a few weeks ago. What's it been like these past couple of weeks, not being at the helm of that giant operation?
Jeff Wilke: It's certainly been an adjustment and I'm still adjusting. I was there over 21 years and it's a part of me in so many different ways. I have so many connections there still and friends who are there. I spent the first two weeks learning to code in Python, which I thought would be a really good way to stay connected to the engineers that build Amazon every day and upgrade my skills since I hadn't written code in modern languages.
So you're not on the golf course. You're learning Python?
Yeah, it was super fun. It was very immersive. It was a reminder to me of how coding compounds creativity and invention.
Why did you want to depart Amazon?
I just said it was time. I didn't spend any time through the years carefully charting some course. We were building what we hoped would be a lasting, important company and worrying about the customer experience and I got to a point where I felt like it was time to do other things.
Did the job become not as fun with all of the scrutiny from Washington and organized labor and just the giant pressure you were under with all that?
The job was just as fun when I started to think about leaving, which was well before the pandemic. And it was really meaningful last year in terms of all that was accomplished. But it just felt time for me to move on.
Did you want to be the next CEO?
I never really thought about it because I always imagined Jeff doing it forever. When I was making my decision that wasn't what I was thinking about.
But when you heard he was stepping down, were you like, "I should have just stuck around a little longer?"
No. I was super excited and I am super excited for [new Amazon Worldwide Consumer CEO] Dave Clark and for Andy Jassy.
Were you surprised when the other Jeff said he was leaving?
Yes
It's interesting that both of you who had been there over 20 years and in his case founded the company decided at this moment to leave. Do you think he took some inspiration from you?
(Laughs) That's hard to say but I think in many ways the last year or so has been quite a time of self-reflection for many people. It's not surprising to me that if people were maybe thinking in the back of their mind about making a change, the events of the last year would have caused them to think even harder about it. I don't know for sure why Jeff chose the particular time he chose, but he has so many things in his life that he wants to focus on, too. And I'm just really happy for him.
How do you think the company will be different under Andy Jassy?
Andy was a part of the S-team [Amazon's senior leadership group] for a long time and contributed materially to a bunch of the things that are part of the culture. He and I worked with a group of people on a couple of the revisions to the leadership principles that really have guided the company for nearly two decades. And of course the business and culture that he built with the team and AWS is a big part of Amazon and certainly a big part of the technical underpinnings of the way Amazon works. And that's not going to change at all. So I think it's a terrific team with a great mission and a lot of runway because of the businesses that they're in. I'm going to remain a fan.
What was Jeff Bezos like to work for?
You vote with your feet at work, and if I didn't think he was somebody that I enjoyed working for and that I could learn from, I wouldn't have had him as my boss for over 20 years. He and I have different strengths in different areas where we were able to help each other out by learning from each other and of course Amazon is more than just one or two or 10 people – it's thousands and now actually over a million people.
In those early days what did you see Amazon becoming? Did you just think it would be a big bookseller or could you have seen this global colossus?
I don't think anybody could have imagined what actually happened. Too many things had to fall into place. For instance, there was no iPhone or Android system in 1999 when I joined. People weren't carrying around what are basically supercomputers in their hands, which radically changed the way people interact with the World Wide Web. The delivery networks were not nearly as capable as they became over those 20 years. There's a ton of work to do to get costs to a point where you could afford to offer something like Prime. We didn't have a studio so the idea that we would be creating movies and TV shows as a complement to the delivery services as part of the subscription program called Prime – I think it would have been hard to envision all these things in detail.
What was your reaction to the union vote in Alabama failing by a pretty wide margin?
Jeff hit this well in the shareholder letter; the company can always be better at taking care of employees. If I were still there, I wouldn't have hung my hat on the outcome of that particular vote. I would have said there are some signals that we're receiving that say we have more work to do. We should be proud of what we've done – proud of our safety record and proud that we pay industry leading wages and proud that we have 20 weeks of family leave for people who started an unskilled hourly job on day one, which is really unheard of. So, we have all these things that we've done that are great and then there's a lot of things that we can do to get better.
What did you think of "Nomadland"?
The work camper thing was something that sort of naturally evolved. There were groups of people who had come to work only for the holiday at Amazon and they showed up in campers and they were making great money and then they left post-holiday. They started coming back every year. They really enjoyed it. They built email networks together and they coordinated their work. They asked Amazon to help with finding parking lots for the campers and we were happy to do that. But it was really an organic thing. It just sprouted up. I really enjoyed my trips to the fulfillment centers, hearing their stories and then seeing them come back year after year.
Is it hard when you order something now from Amazon and it doesn't arrive on time and you're like, "why did this happen?" Is it hard to get that out of your system after all these years?
Of course. I mean, the team knows any time there's a defect, I'm going to send an email and that's not going to change.
Part two: Jeff Wilke reveals his next chapter.
Lead illustration by Eduardo Ramón Trejo.
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Ben Bergman
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.
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ben@dot.la
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