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LA Tech Updates: LA's Largest VC is Now a Public Benefit Corp; Treehouse Games Raises $2.6M
Sam Blake
andSam primarily covers entertainment and media for dot.LA. Previously he was Marjorie Deane Fellow at The Economist, where he wrote for the business and finance sections of the print edition. He has also worked at the XPRIZE Foundation, U.S. Government Accountability Office, KCRW, and MLB Advanced Media (now Disney Streaming Services). He holds an MBA from UCLA Anderson, an MPP from UCLA Luskin and a BA in History from University of Michigan. Email him at samblake@dot.LA and find him on Twitter @hisamblake
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.
Here are the latest updates on news affecting Los Angeles' startup and tech communities. Sign up for our newsletter and follow dot.LA on Twitter for more.
Today:
- LA's Largest VC is Now a Public Benefit Corp
- Treehouse Games Raises $2.6M
'Collaborative' Game-Maker Treehouse Games Raises $2.6M
Treehouse Games, founded by former Riot Games product lead Michael Chu and indie games studio veteran Ryan Sullivan, has raised $2.6 million in seed funding. The studio will focus on making collaborative games "to serve a growing, global audience of millions of people who use games as their favorite way to hang out," the company said in a statement.
London Venture Partners (LVP) led the funding round. Bay Area-based Transcend Fund and Super Evil Megacorp CEO Kristian Segestrale also participated.
Chu and Sullivan told dot.LA that "it's too early to go into specifics about the game, but our team is hard at work building an innovative cooperative game to bring friends and family together."
"We want to create games that give you that feeling of camaraderie during a road trip, or the sense of generosity you get when buying your friend a cup of coffee," the founders said.
Fifth Wall Venture Firm Is Now a B Corporation
Fifth Wall announced this week it is now a Certified B Corporation or "B Corp," which means it is legally required to consider the impact of its decisions on workers, customers, suppliers, community, and the environment.
Fifth Wall is the largest venture capital firm focused on real estate tech, known as proptech. It announced the close of its second real estate technology fund last year, with $503 million in dry powder, making it the largest VC fund in Los Angeles.
"It is incumbent upon all of us to take actionable steps towards building a more equitable and sustainable society," said Brendan Wallace, co-founder and managing partner at Fifth Wall. "We're grateful to the resources and community offered by B Lab to help our firm as we continue to educate ourselves and make changes within our own organization."
Fifth Wall is now part of a cohort of 3,939 other B-Corps that include names like Ben & Jerry's, Allbirds, and Patagonia.
The real estate industry accounts for 40% of the world's consumption of energy and Fifth Wall says it is ready to help make construction more sustainable. Earlier this year, the firm announced a new carbon impact fund.
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- The Future of Real Estate: Bigger Offices and Smaller Chains - dot.LA ›
- Fifth Wall Joins the SPAC Boom - dot.LA ›
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Sam primarily covers entertainment and media for dot.LA. Previously he was Marjorie Deane Fellow at The Economist, where he wrote for the business and finance sections of the print edition. He has also worked at the XPRIZE Foundation, U.S. Government Accountability Office, KCRW, and MLB Advanced Media (now Disney Streaming Services). He holds an MBA from UCLA Anderson, an MPP from UCLA Luskin and a BA in History from University of Michigan. Email him at samblake@dot.LA and find him on Twitter @hisamblake
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.
https://twitter.com/hisamblake
samblake@dot.la
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Despite — or in many cases because of — the raging pandemic, 2020 was a great year for many tech startups. It turned out to be an ideal time to be in the video game business, developing a streaming ecommerce platform for Gen Z, or helping restaurants with their online ordering.
But which companies in Southern California had the best year? That is highly subjective of course. But in an attempt to highlight who's hot, we asked dozens of the region's top VCs to weigh in.
We wanted to know what companies they wish they would have invested in if they could go back and do it all over again.
<p>Startups were ranked by how many votes each received. In the case of a tie, companies were listed in order of capital raised. The list illustrates how rapidly things move in startup land. One of the hottest startups had not even started when 2020 began. A number doubled or even 16x'd their valuation in the span of a few short months. </p><p>To divvy things up, we delineated between companies that have raised Series A funding or later and younger pre-seed or seed startups.</p><p>Not surprisingly, many of the hottest companies have been big beneficiaries of the stay-at-home economy.</p><p>PopShop Live, a red-hot QVC for Gen Z headquartered out of a WeWork on San Vicente Boulevard, got the most votes. Interestingly, the streaming ecommerce platform barely made it onto the Series A list because it raised its Series A only last month. Top Sand Hill Road firms Andreessen Horowitz and Lightspeed Venture Partners <a href="https://www.theinformation.com/articles/benchmark-wins-deal-for-live-shopping-app-popshop-at-100-million-valuation" rel="noopener noreferrer" target="_blank">reportedly competed ferociously for who would lead the round</a> but lost out to Benchmark, which was an early investor in eBay and Uber. The round valued PopShop Live at $100 million, way up from the $6 million valuation it <a href="https://www.bizjournals.com/losangeles/news/2020/07/08/popshop-live-raises-3m-for-live-streaming-app.html" rel="noopener noreferrer" target="_blank">raised at only five months prior. </a></p><p>Scopely, now <a href="https://dot.la/doubling-valuation-scopely-is-now-one-of-the-top-la-tech-startups-2648525465.html" target="_self">one of the most valuable tech companies in Los Angeles,</a> was also a top vote getter.</p><p>The Culver City mobile gaming unicorn <a href="https://dot.la/doubling-valuation-scopely-is-now-one-of-the-top-la-tech-startups-2648525465.html" target="_self">raised $340 million in Series E funding in October</a> at a $3.3 billion valuation, which nearly doubled the company's $1.7 billion post-money valuation from March. It is no coincidence that that was the same month stay-at-home orders began as Scopely has benefited from bored consumers staying on their couch and playing ScrabbleGo or Marvel Strike Force. </p><p>The company's success is especially welcome news to seed investors Greycroft, The Chernin Group and TenOneTen ventures, who got in at a $40 million post valuation in 2012. Upfront Ventures, BAM Ventures and M13 joined the 2018 Series C at a $710 post-money valuation.</p><p>Softbank-backed Ordermark, which flew more under the radar, also topped the list. The company's online ordering platform became a necessity for restaurants forced to close their dining rooms during the pandemic and raised $120 million in Series C funding in October.</p><p>On the seed side, two very different startups stood out. There was Pipe, which enables companies with recurring revenues to tap into their deferred cash flows with an instant cash advance, and Clash App, Inc., a TikTok alternative launched by a former employee of the social network in August.</p><p><span></span>We will have the list of Southern California's top seed startups out tomorrow.</p>
<p class=""><em>Lead art by Candice Navi.</em></p>
Hottest
<img class="rm-lazyloadable-image rm-shortcode" lazy-loadable="true" data-runner-src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDk5MzIyNS9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTY1OTQ3MjQ2OH0.JYCNMjYvosYa5SI7701CH_jMFbeFdMcRCChXt442cq0/image.png?width=980" id="3927d" width="686" height="128" data-rm-shortcode-id="5defd5b7e1983aa7681f36d6e1783a7b" data-rm-shortcode-name="rebelmouse-image" alt="PopShop Live logo" />PopShop Live ($100 million)
<p>The live-streaming shopping channel created by Danielle Lin reportedly found itself in the middle of a <a href="https://www.theinformation.com/articles/benchmark-wins-deal-for-live-shopping-app-popshop-at-100-million-valuation" target="_blank">venture capital bidding war this year</a>. Benchmark eventually won out leading a Series A round, vaulting the app at a $100 million valuation. The Los Angeles-based platform has been likened to QVC for Gen Z and <a href="https://dot.la/popshop-live-2646369816.html" target="_self">it's part of a new wave of ecommerce</a> that has found broader appeal during the pandemic. Google, Amazon and YouTube have launched live shopping features and other venture-backed startups like Los Angeles-based NTWRK have popped up.</p>Boiling
<img class="rm-lazyloadable-image rm-shortcode" lazy-loadable="true" data-runner-src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDk5MzIyOC9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTY2MzI5MjYwMn0.h7Nq7GiwXTcg_7Io5WEXblFX0rWQHxn69RzluTh7n_Q/image.png?width=980" id="4e424" width="361" height="93" data-rm-shortcode-id="b53f9030fdb96b08d7cfdb5383c97bfb" data-rm-shortcode-name="rebelmouse-image" alt="Scopely logo" />Scopely ($3.3 billion)
<p>One of the most valuable Southern California tech startups with <a href="https://dot.la/doubling-valuation-scopely-is-now-one-of-the-top-la-tech-startups-2648525465.html" target="_self">a $3.3 billion valuation</a>, the Culver City mobile game unicorn has benefitted from a booming gaming market that has flourished in this stay-at-home economy. Scopely offers free mobile games and its roster includes "Marvel Strike Force," "Star Trek Fleet Command" and "Yahtzee with Buddies." In October the company raised a $340 million Series E round backed by Wellington Management, NewView Capital and TSG Consumer Partners, among others fueling speculation that it was on its road to an IPO. Co-CEO Walter Driver <a href="https://www.bloomberg.com/news/articles/2020-10-28/scopely-raises-340-million-in-push-to-be-a-mobile-gaming-giant?utm_source=google&utm_medium=bd&cmpId=google&sref=4Kf8RwDw" target="_blank" rel="noopener noreferrer">has said</a> that he doesn't have immediate plans to go public. </p><img
class="rm-lazyloadable-image rm-shortcode" lazy-loadable="true"
data-runner-src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDk5MzIzNC9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTYyMDQ4NTgyMn0.caggOCkGNRp4GE2mV_BvBsOt-3eTs6wLqCHAXmK9IpQ/image.png?width=980"
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data-rm-shortcode-id="0a5f6d33291f5b5c3ca7ff28966098c1" data-rm-shortcode-name="rebelmouse-image" />
Ordermark ($70 million)
<p>The coronavirus has forced the closure of many dining rooms, making Ordermark all the more sought after by restaurants needing a way to handle online orders. Co-founder and CEO Alex Canter started the business in 2017, which recently rang in more than <a href="https://www.forbes.com/sites/aliciakelso/2020/12/09/how-ordermarks-latest-funding-haul-could-help-independent-restaurants-survive-the-pandemic/?sh=443a72644b7d" target="_blank">$1 billion in sales</a>. Ordermark secured $120 million in Series C funding by Softbank Vision Fund 2 in October that it will use to bring more restaurants online. The company's Nextbite, a virtual restaurant business that allows kitchens to add delivery-only brands such as HotBox from rapper Wiz Khalifa to their existing space through Ordermark, is also gaining traction. </p>Simmering
<img class="rm-lazyloadable-image rm-shortcode" lazy-loadable="true" data-runner-src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDk5MzMxNi9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTY1NjM4MjQ5Mn0.XSHQfru9tTpdeBqd_ecb--8DiZg_vdyOtF9ZV9zAG78/image.png?width=980" id="839d0" width="455" height="111" data-rm-shortcode-id="79ffc10f23fc7ca1572d55df3f299f85" data-rm-shortcode-name="rebelmouse-image" />Cameo ($300 million)
<p>Cameo, which launched three years ago, had its breakout year in 2020 as C-list celebrities like Brian Baumgartner <a href="https://www.buzzfeed.com/larryfitzmaurice/kevin-office-highest-earning-cameo" target="_blank">banked over a million dollars</a> from creating customized videos for fans. In the sincerest form of flattery, <a href="https://www.bloomberg.com/news/articles/2020-12-15/facebook-building-tool-to-let-fans-pay-celebrities-for-face-time" target="_blank">Facebook is reportedly launching a feature that sounds a lot like Cameo. </a> Even though the company is still technically headquartered in Chicago, we included Cameo because CEO Steven Galanis and much of the senior team moved to L.A. during the pandemic and say they plan to continue running the company from here for the foreseeable future.</p><img
class="rm-lazyloadable-image rm-shortcode" lazy-loadable="true"
data-runner-src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDk5MzQyMS9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTY0MzIyNTA2MH0.Q7liPP3eMIINmacHCWZDp3P2xJjIx19nAJL3r0PTzV0/image.jpg?width=980"
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width="800"
height="400"
data-rm-shortcode-id="806f287d707dc7ed5b154c61934022b1" data-rm-shortcode-name="rebelmouse-image" />
Mothership ($64 million)
<p>Co-founded by CEO Aaron Peck, Mothership provides freight forwarding services intended to streamline the shipping experience. The company's tracking technologies connect shippers with nearby truck drivers to speed up the delivery process. It raised $16 million in Series A venture funding last year, driving the platform to a $48 million pre-money valuation.</p><img
class="rm-lazyloadable-image rm-shortcode" lazy-loadable="true"
data-runner-src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDk5MzUxNS9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTY1MDM4ODMxNH0.JhY8gLSI7YWbw_8vxTM3IQOf8NZELdrh8bWdGG8mB_U/image.png?width=980"
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width="970"
height="198"
data-rm-shortcode-id="1e4ac6f740a448bf7af33fb91a91f6d0" data-rm-shortcode-name="rebelmouse-image" />
Nacelle ($6.7 million)
<p>Founded in 2019, Nacelle's ecommerce platform helps retailers improve conversion rates and decrease loading speeds for their sites. The software integrates with Shopify and other services, offering payment platforms and analytics integration, among dozens of services. Nacelle raised about $4.8 million earlier this year with angel investors that included Shopify's Jamie Sutton, Klaviyo CEO Andrew Bialecki and Attentive CEO Brian Long. </p><img
class="rm-lazyloadable-image rm-shortcode" lazy-loadable="true"
data-runner-src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDk5MzUxOC9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTY3NTUwOTY4NH0.6oMIDYTnTsrnIqM0CImdCr1hryg1cAsjGc5DJGznzRo/image.png?width=980"
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width="796"
height="536"
data-rm-shortcode-id="9d1aea650205d27067b898d80f7b20f1" data-rm-shortcode-name="rebelmouse-image" />
Boulevard ($30 million)
<p>Matt Danna and Sean Stavropoulos <a href="https://dot.la/boulevard-app-2649021308.html#:~:text=Their%20four%2Dyear%20old%20salon,to%20digitize%20their%20appointment%20books." target="_self">came up with Boulevard when an impatient Stavropoulos was frustrated</a> wasting hours to book a hair appointment. Their four-year-old salon booking and payment service is now used by some of Los Angeles' best-known hairdressers. Last month, the two secured a $27 million Series B round co-led by Index Ventures and Toba Capital. Other investors include VMG Partners, Bonfire Ventures, Ludlow Ventures and BoxGroup.</p><img
class="rm-lazyloadable-image rm-shortcode" lazy-loadable="true"
data-runner-src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDk5MzUyNy9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTY2NTQwOTM5NH0.ccTFYR5uzxflJ9M_IPQdCkvQD3DlHSWfrWeqsWQKw-U/image.jpg?width=980"
id="7f963"
width="1000"
height="400"
data-rm-shortcode-id="406a54000241466bee0ac583bfbe2f23" data-rm-shortcode-name="rebelmouse-image" alt="CloudKitchens" />
CloudKitchens ($5.3 billion)
<p>Uber co-founder Travis Kalanick CloudKitchens rents out commissary space to prepare food for delivery. And as the pandemic has fueled at-home delivery, <a href="https://www.wsj.com/articles/uber-founder-turns-real-estate-mogul-for-ghost-kitchen-startup-11603186200" target="_blank">the company has been gobbling up real estate</a>. The commissaries operate akin to WeWork for the culinary world and allow drivers to easily park and pick-up orders as the delivery market has soared during pandemic. Last year, it raised $400 million from Saudi Arabia's colossal sovereign wealth fund. </p><img
class="rm-lazyloadable-image rm-shortcode" lazy-loadable="true"
data-runner-src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDk5MzYwMy9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTY1NDI3MjkyNX0.l7SX-f7x7WXYLSJxOFh9IBYPQ9UHyAGYlLwm-VqcSEM/image.jpg?width=980"
id="9151a"
width="1200"
height="800"
data-rm-shortcode-id="0521499facefdb284e0b36d479aac2a5" data-rm-shortcode-name="rebelmouse-image" />
GOAT ($1.5 billion)
<p>Founded by college buddies five years ago, GOAT tapped into the massive sneaker resale market with a platform that "authenticates" shoes. The Culver City-based company has since <a href="https://dot.la/goat-group-la-2647074186/goat-uses-nba-playoffs-to-launch-brand-campaign" target="_self">expanded into apparel and accessories</a> and states that it has 20 million members. Last year, Foot Locker sunk a $100 million minority investment into 1661 Inc., better known as Goat. And this fall it landed another $<a href="https://dot.la/sneaker-reseller-goats-100m-raise-ptrendsetter-in-a-casual-era-of-ecommerce-2647774644.html" target="_self">100 million Series E</a> round bankrolled by Dan Sundeheim's D1 Capital Partners. </p><img
class="rm-lazyloadable-image rm-shortcode" lazy-loadable="true"
data-runner-src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDk5MzYwNi9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTYzMTk1OTc5Nn0.6Y7vMFyH1FwClW-QNJ6sUGzhq1Q9IuNP9-4-koT1LqA/image.png?width=980"
id="e42ee"
width="3637"
height="492"
data-rm-shortcode-id="b66fc18e570b3f2def91ffcf0b5c43eb" data-rm-shortcode-name="rebelmouse-image" alt="Savage X Fenty logo" />
Savage X Fenty
<p>The lingerie company co-founded by pop singer Rihanna in 2018 is noted for its inclusivity of body shapes and sizes. It has raised over $70 million, but <a href="https://www.nytimes.com/2020/12/14/business/dealbook/roblox-tech-ipos.html" target="_blank">The New York Times' DealBook newsletter recently reported</a> that it's been on the hunt for $100 million in funds to expand into active wear. The company generates about $150 million in revenue, but is not yet profitable, according to the report. It became <a href="https://www.businessinsider.com/rihanna-savage-x-fenty-accused-of-deceptive-marketing-2020-2" target="_blank">the focus of a consumer watchdog investigation</a> after being accused of "deceptive marketing" for a monthly membership program.</p>Warming Up
<img class="rm-lazyloadable-image rm-shortcode" lazy-loadable="true" data-runner-src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDk5MzYwOS9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTY3MzQ1MzE4OX0.fS5XtGx4M-tqWecrth6NCHawGSg2aSkb-yR-cY3wbtU/image.png?width=980" id="4fca7" width="600" height="600" data-rm-shortcode-id="6a5ba1810dd71af400ee8f61634cc56e" data-rm-shortcode-name="rebelmouse-image" />FabFitFun ($930 million)
<p>The lifestyle company provides customized personal subscription box services every three months with full size products. Started in 2010 by Daniel Broukhim, Michael Broukhim, Sam Teller and Katie Rosen Kitchens, it now boasts more than one million members. Last year, the company raised $80 million in a Series A round led by Kleiner Perkins last year and <a href="https://labusinessjournal.com/news/2020/oct/05/fast-growing-etailer-fabfitfun-possible-ipo/" target="_blank">appears to be preparing for an eventual IPO</a> as it slims down costs and refocuses on its <a href="https://dot.la/fabfitfun-layoffs-refocus-2645321060.html" target="_self">high value </a>products.</p><img lazy-loadable="true" src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vbWVkaWEucmJsLm1zL2ltYWdlP3U9JTJGaW1hZ2VzJTNGcSUzRHRibiUzQUFOZDlHY1NIWXNBeFVWZ1J6a2VJVDZzWE5xU0tPVWg1Ri1qU2V0ZnV1dyUyNnVzcXAlM0RDQVUmaG89aHR0cHMlM0ElMkYlMkZlbmNyeXB0ZWQtdGJuMC5nc3RhdGljLmNvbSZzPTE4OSZoPWMyM2U5ZGI3MmI2OWVlYWE1ZGNjMDIzNTZmYjgwZGI3NTkxNWIwZDdhOGFhNTk1YzQzYzRhMzYzNjIzZmEzZGQmc2l6ZT05ODB4JmM9Mjg2MzQwMTM1NCIsImV4cGlyZXNfYXQiOjE2Mzg2MDA1NjR9.qWy95wwhg8i2C_ZX-ba2HEivjNkIw8hNzNcMCrNBqfw/image.jpg" id="acba9" class="rm-shortcode" data-rm-shortcode-id="6c5c926b1b226e2896a508c7b2a59027" alt="Dave app logo" />
Dave ($1 billion)
<p>Launched in 2016, the finance management tool helps consumers to avoid overdrafts, provides paycheck advances and assists in budgeting. Last year, it began to roll out a digital bank account that was so popular that two million users signed up for a spot on the waitlist. The company, run by co-founder Jason Wilk, has raised $186 million in venture capital and counts billionaire Mark Cuban as an early investor and board member. Other backers include Playa Vista-based Chernin Group.</p><img lazy-loadable="true" src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vbWVkaWEucmJsLm1zL2ltYWdlP3U9JTJGaW1hZ2VzJTNGcSUzRHRibiUzQUFOZDlHY1FPWGJReDlKdmF3b0hXc096dERXRkpVeTRERW5qalVITElidyUyNnVzcXAlM0RDQVUmaG89aHR0cHMlM0ElMkYlMkZlbmNyeXB0ZWQtdGJuMC5nc3RhdGljLmNvbSZzPTcwMSZoPWM5MGI4NjJjMTM0NTExYjcwN2Y2ZTg0NDAzMjNmNGYzNzUyOGIwNTM0N2IzZTc2MmExNzUwYmZmZmRjZDczYjEmc2l6ZT05ODB4JmM9NDAzMDk2MjAwMCIsImV4cGlyZXNfYXQiOjE2NzAxMDk3MjR9.IFhgk0btjnI-GbHb_4Dh9bBcK999VMoWweZCnaGGLZ8/image.jpg" id="22354" class="rm-shortcode" data-rm-shortcode-id="0a332dbc9d8d328e5700e6b0945471a1" />
Sure ($59 million)
<p>SURE offers multiple technology products to major insurance brands — its platform can host everything from renter's insurance to covering baggage, so customers never have to leave an agency's website. It also offers its platform to ecommerce marketplaces, embedding third-party insurance protections for customers to purchase all on the same webpage. Founded in 2014, the Santa Monica-based startup last raised an $8 million Series A round led by IA Capital in 2017.</p><img
class="rm-lazyloadable-image rm-shortcode" lazy-loadable="true"
data-runner-src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDk5MzY5MS9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTY3NDQ1NzU3OH0.PfJrZ014HYeuwB0xI5t6mhpwsiliDvJnPMMoaraNAdE/image.jpg?width=980"
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Zest AI ($90 million)
<p>Founded in 2009 by former Google CIO Douglas Merrill and ex-Sears executive Shawn Budde, Zest AI provides AI-powered credit underwriting. It helps banks and other lenders identify borrowers looking beyond traditional credit scores. It claims to improve approval rates while decreasing chargeoffs. The company uses models that aim to make the lending more transparent and less biased. This fall the company raised $15 million from Insight Partners, MicroVentures and other undisclosed investors, putting its pre-money valuation at $75 million, according to PItchbook.</p><img
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PlayVS
<p>Santa Monica-based PlayVS provides the technological and organizational <a href="https://dot.la/playvs-high-school-esports-2647048099.html" target="_self">infrastructure for high school esports leagues</a>. The pandemic has helped the company further raise its profile as traditional sports teams have been benched. Founded in early 2018, PlayVS employs 46 people and has raised over $100 million. In addition to partnering with key educational institutions, it also has partnerships with major game publishers such as Riot and Epic Games.</p><img
class="rm-lazyloadable-image rm-shortcode" lazy-loadable="true"
data-runner-src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDk5MzY5NC9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTY2ODI4NTgyN30.bZeKd8Z_en55nxL_6LdzNaL1FNUT01e5h2Q1SO-_im4/image.png?width=980"
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Tapcart ($40 million)
<p>A SaaS platform helps Shopify brands create mobile shopping apps. The marketing software saw shopping activity jump 50% <a href="https://dot.la/tapcart-mobile-retail-platform-2646056623.html" target="_self">over 90 days</a> as the pandemic walloped traditional retailers. Founded by Eric Netsch and Sina Mobasser, the company raised a $10 million Series A round led by SignalFire, bringing the total raise to $15 million.</p><img
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Papaya ($31.8 million)
<p>Papaya lets customers pay any bill from their mobile devices just by taking a picture of it. The mobile app touts the app's ease-of-use as a way to cut down on inbound bill calls and increase customer payments. Founded by Patrick Kann and Jason Metzler, the company has raised $25 million, most recently a S10 million round of convertible debt financing from Fika Ventures, Idealab and F-Prime Capital Partners.</p><img
class="rm-lazyloadable-image rm-shortcode" lazy-loadable="true"
data-runner-src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDk5MzY5OC9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTYyNTYyMTc2Mn0.8lwp3rJYqkee108lZxymVA0Z0FppunMPnCU7prsw8xA/image.png?width=980"
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Floqast ($250 million)
<p>FloQast is a management software that integrates enterprise resource planning software with checklists and Excel to manage bookkeeping. The cloud-based software company claims its system helps close the books up to three days faster. It is used by accounting departments at Lyft, Twilio, Zoom and The Golden State Warriors. In January, it raised $40 million in Series C funding led by Norwest Venture Partners to bring the total raise to $92.8 million.</p><img
class="rm-lazyloadable-image rm-shortcode" lazy-loadable="true"
data-runner-src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDk5MzY5OS9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTYzMzg4NTI5M30.WUAoRXYSNkJmtqYs1HucZ0lX-koAeXYj5I0oRrWsibk/image.png?width=980"
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Brainbase ($26.5 million)
<p>The company's rights management platform expedites licensing payments and tracks partnership and sponsorship agreements. It counts BuzzFeed, the Vincent Van Gogh Museum and Sanrio (of Hello Kitty and friends fame) among its clients. In May <a href="https://dot.la/headspace-brainbase-2647426309/rights-management-platform-brainbase-beefs-up-c-suite-following-8m-raise" target="_self">it announced $8 million in Series A financing </a>led by Bessemer Venture Partners and Nosara Capital, bringing the total raised to $12 million.</p><img
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OpenPath ($28 million)
<p>The Los Angeles-based company provides a touchless entry system that uses individuals cell phones to help with identification instead of a key card. The company offers a subscription for the cloud-enabled software that allows companies to help implement safety measures and it said demand has grown amid the pandemic. Founded by <a href="https://dot.la/alex-kazerani-james-segil-2646964770.html" target="_self">James Segil and Alex Kazerani</a> the company r<a href="https://dot.la/openpath-primed-for-covid-accelerated-growth-announces-36-million-raise-to-make-keycards-obsolete-2646416034/particle-2" target="_self">aised $36 million led by Greycroft </a>earlier this year, bringing its total funding to $63 million.</p><img
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FightCamp ($2.5 million)
<p>FightCamp is an interactive home workout system that<a href="https://mashable.com/article/fightcamp-review/" target="_blank"> turns your space into a boxing ring</a> with a free standing bag, boxing gloves and punch trackers. The company is riding the wave of at-home fitness offerings including Peloton, Mirror and Zwift that have taken off during the pandemic as gyms closed. The company has raised $4.3 million to date.</p><img
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Numerade
<p>The Santa Monica-based company provides video and interactive content for education in math, science, economics and standardized test prep. Founded in 2018 by Nhon Ma and Alex Lee, who previously founded Tutorcast, an online tutoring service, the company gathers post-graduate educated instructors to create video lessons for online learning.</p><img
class="rm-lazyloadable-image rm-shortcode" lazy-loadable="true"
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Our Place ($32.5 million)
<p>The creator of a pan with a cult following on social media, this Los Angeles-based startup designs and retails cookware and dinnerware. Founded by Amir Tehrani, Zach Rosner and Shiza Shahid, the company completed its Series A funding earlier this year, bringing its total raised to date to $10 million.</p><img
class="rm-lazyloadable-image rm-shortcode" lazy-loadable="true"
data-runner-src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDk5Mzc5MC9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTYyNzIxNDk4Nn0.QutV5lS2Yh1lC7cnnX4MtX2XxvLHaewK4WNIGO7zX5M/image.png?width=980"
id="c6f66"
width="600"
height="220"
data-rm-shortcode-id="e529cf137172e31c212ab3ae4eb857f7" data-rm-shortcode-name="rebelmouse-image" alt="Tala" />
Tala ($560 million)
<p>For customers that have no formal credit or banking history, this company's application promises more financial access, choice and control. It gathers data to create a credit score that can be used to instantly underwrite and disburse loans ranging from $10 to $500. Co-founded by Shivani Siroya and Jonathan Blackwell, Tala has raised $217.2 million to date. Its investors include PayPal Ventures, Lowercase Capital and Data Collective.</p><img
class="rm-lazyloadable-image rm-shortcode" lazy-loadable="true"
data-runner-src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDk5Mzc5My9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTY2NDA4OTQ2Nn0.IIPwkBI2M3OMR-fgnM47TLWe5yoOsVZe6tvPwVCI3dU/image.png?width=980"
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data-rm-shortcode-id="6e60963b7d8d9f5c4c711eba919f962f" data-rm-shortcode-name="rebelmouse-image" alt="ServiceTitan" />
ServiceTitan ($2.25 billion)
<p>Founded in 2007 by chief executive Ara Mahdessian and president Vahe Kuzoyan, ServiceTitan operates software that helps residential home contractors grow their businesses. It provides businesses tools like customer relationship management and accounting integration to streamline operations. The company closed a $73.82 million Series E funding round from undisclosed investors earlier this year.</p><img
class="rm-lazyloadable-image rm-shortcode" lazy-loadable="true"
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100 Thieves ($160 million)
<p>Founded in 2017 by former professional "Call of Duty" player Matthew Haag, 100 Thieves manages esports competitions in major titles including "Counter Strike Global Offensive" and "League of Legends." The company also produces apparel and merchandise, opening a physical store and training ground called the "Cash App Compound" in collaboration with Fortnite earlier this year. The company has raised $60 million to date, from investors including Salesforce CEO Marc Benioff and Aubrey Graham, better known as the rapper Drake.</p><img
class="rm-lazyloadable-image rm-shortcode" lazy-loadable="true"
data-runner-src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDk5Mzg2NS9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTY2NDM1MTU3N30.gZiFa2FICgByJt8s93ni59ipDb8K-odSv0zjRA8B0Vg/image.png?width=980"
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data-rm-shortcode-id="7be273c9e5a084ee1ec5e48d13ce6f0d" data-rm-shortcode-name="rebelmouse-image" alt="Emotive logo" />
Emotive ($16.5 million)
<p>This AI-powered customer service platform automates text conversations between customers and businesses to increase sales. Emotive uses their sales team to verify questions, distinguishing it from other bot-driven marketing services, according to the company. The company was founded in 2018 by Brian Zatulove and Zachary Wise, who serve as the chief executive and the chief operating officer, respectively. It has raised $6.65 million to date, from Floodgate Fund and TenOneTen Ventures. </p><img
class="rm-lazyloadable-image rm-shortcode" lazy-loadable="true"
data-runner-src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDk5Mzg3MS9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTY2MDgzMjY3NX0.r0Oc87K8y6t8f6Xa8l0y0gcGml_5FW2gPpD-TE6Bu7g/image.png?width=980"
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width="598"
height="124"
data-rm-shortcode-id="11b0bc41f2ec4ed50a88c27ae3c56967" data-rm-shortcode-name="rebelmouse-image" alt="Everytable logo" />
Everytable ($33 million)
<p>Created by former hedge fund trader Sam Polk, the Los Angeles-based startup wants to be a healthy fast food chain. It <a href="https://dot.la/everytable-2648958920.html" target="_self">prices its healthy pre-packaged meals around $5</a> in underserved communities while costing more in other neighborhoods with the goal of reducing so-called food deserts in low-income neighborhoods. It also offers a subscription delivery service. The company recently closed a $16 million Series B round led by Creadev along with Kaiser Permanente Ventures.</p>From Your Site Articles
- Los Angeles' Tech and Startup Scene is Growing. - dot.LA ›
- The dot.LA/ Pitchbook Top 50 LA Startups for 2020 Q2 - dot.LA ›
- dot.LA/Pitchbook 50 Hottest Los Angeles Companies - dot.LA ›
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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.
NFTs (non-fungible tokens) are a novel form of ownership that could rejigger the financial landscape for creators. Even if the market for some of them proves frothy, this blockchain-based technology presents a unique way for artists to make money and engage their fans. With experimentation already underway, the gates are open for them to do what they do best: get creative.
<h2>The Opportunity
</h2><p>
Several startup founders and musicians are looking to this incipient market not just as a means of selling digital collectibles, but as a unique way to offer fans exclusive, paid experiences.
</p><p>
"Any new avenue of potential profit is exciting in the music industry, considering the lack thereof from streaming and [the need to rely on] touring," said Brian Spencer, one half of the L.A.-based musical duo <a href="https://www.finkelband.com" rel="noopener noreferrer" target="_blank">FINKEL</a>.
</p><p>
There's nothing new about creators offering fans exclusive perks. What is new is that they can now be linked to an NFT that also functions as a "key" or "passport." Many artists are hoping this linkage can stoke demand for perks, thanks to the innate human attraction to ownership.
</p><p>
"There's a lot of psychological evidence that owning things matters a lot to people," said Valentin Haddad, a professor at UCLA Anderson School of Management who studies how and why people make financial decisions.
</p><p>
He pointed to <a href="https://thedecisionlab.com/biases/endowment-effect/" rel="noopener noreferrer" target="_blank">the so-called "endowment effect</a>," which, research has suggested, makes people value things more when they own them, simply because they own them. Since NFTs are a certificate of ownership, linking them to an experience – like a backstage pass, or a producer credit – should boost the value fans see in those experiences, Haddad said.
</p><p>
"I think the idea of tying some experiences, tying something more special, to the object [underlying the NFT] is going to increase," he said. "We're going to see lots of creativity."
</p>
<img
class="rm-lazyloadable-image rm-shortcode" lazy-loadable="true"
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data-rm-shortcode-id="b2d9eea12f66e5f26659e6cc45bba41c" data-rm-shortcode-name="rebelmouse-image" alt="Illmind" />
Illmind is auctioning 10 NFTs linked to audio files he created that owners can use royalty free.
<p>Rikin Mantri's <a href="https://dot.la/nft-2651148069.html" target="_self">recently launched NFT-minting and -trading platform, Curio,</a> has sold about $130,000 worth of tokens tied to graphic novel characters the company licensed, and it plans to expand soon into other IP, including music. Mantri sees the eye-popping prices capturing headlines as indicative of a bubble, but thinks NFTs have enduring potential.<br></p><p>"We think NFTs have a strong use case in building digital collectible collections and offering experiences around those collectibles," he said. "It's a completely new incremental revenue stream."</p><p><a href="https://www.rollingstone.com/pro/news/kings-of-leon-when-you-see-yourself-album-nft-crypto-1135192/" target="_blank" rel="noopener noreferrer">Kings of Leon, the Grammy-winning band, released their new album last month alongside a series of NFTs</a>, six of which were high-end "golden ticket" versions that granted token owners lifetime front-row concert tickets. In February, <a href="https://www.cultr.com/news/3lau-just-sold-his-ultraviolet-album-nfts-for-11-7-million/" target="_blank" rel="noopener noreferrer">3LAU, a DJ, auctioned off a topshelf NFT that entitled one fan to creatively direct</a> a new composition.</p>
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Rapper <a href="https://www.coindesk.com/post-malone-to-mix-nfts-experiences-in-revamped-music-streaming-platform" target="_blank">Post Malone is planning to sell an NFT linked to a private game of beer pong</a>. Illmind, a Grammy-winning DJ, is <a href="https://cointelegraph.com/news/grammy-winning-producer-illmind-auctions-rights-to-new-samples-as-nft" target="_blank">auctioning 10 NFTs linked to audio files he created</a> that owners can use royalty free. Electronic musician Aphex Twin recently <a href="https://decrypt.co/63120/aphex-twin-hid-a-mystery-date-in-his-nft" target="_blank">turned an NFT into a digital scavenger hunt</a>. And Logan Paul, a YouTuber, linked an NFT to the <a href="https://www.tubefilter.com/2021/03/01/logan-paul-unboxes-pokemon-cards-accompanying-nfts/" target="_blank">opportunity to watch him unbox rare Pokémon cards</a>.
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Other creators are taking a less experiential and more charitable approach to offering NFT products. Street-artist Shepard Fairey, best known for designing the Obama "Hope" poster, is working with East Hollywood-based <a href="https://verisart.com" rel="noopener noreferrer" target="_blank">Verisart</a> to auction off a digital artwork as an NFT, and donating the proceeds to Amnesty International. Pussy Riot, a Russian feminist punk rock group led by activist Nadya Tolokonnikova, recently minted four NFTs tied to a video produced by young <a href="https://dot.la/1ric-augmented-reality-in-music-2650536685.html" target="_self">AR pioneer Asad Malik of La Cañada-based Jadu</a>, some of the proceeds of which went to a shelter for domestic abuse survivors.
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Meanwhile as the metaverse inches closer, the range of perks and experiences that can be tied to NFTs is growing. One sign of things to come is <a href="https://decentraland.org" rel="noopener noreferrer" target="_blank">Decentraland</a>, a virtual world with its own blockchain-enabled currency that has hosted <a href="https://cointelegraph.com/news/decentraland-celebrates-1-year-anniversary-with-virtual-party" rel="noopener noreferrer" target="_blank">digital parties that require NFT-ownership for entry</a>.
</p><h2>Financial Stake
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The same technology that enables these unlockable perks, whether digital or in-person, also allows artists to retain a financial stake in all future sales of the NFTs they issue. Stipulations like sending 10% of the price paid for an NFT to a specified bank account can be executed automatically: thus the term "smart contract." </p><p>
Smart contracts are one element that distinguishes the Ethereum blockchain, on which most NFTs run, from the blockchain that underpins Bitcoin and many other cryptocurrencies.
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They're also what could make NFTs helpful to smaller artists in particular. Since smart contracts can theoretically automate tasks like preventing fraud and scalping, they open up new opportunities.</p><p>
"It's giving artists lots of access to ways to share experiences and share things that big artists could always do [but] small artists couldn't," Haddad said. "The benefits are likely to accrue to the top, but I think it will benefit everybody by creating a better way to exchange with your fans."
</p><h2>Artists' NFT Concerns
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One downside to NFTs is the high volume of electricity they use, which can harm the environment. That's turning some artists away from them for now.
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FINKEL is unlikely to pursue NFTs until the environmental concerns can be addressed, Spencer said.
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One way of doing so could be a shift in how the blockchain works. Validating who owns what on a blockchain has largely relied so far on a method called "proof-of-work," which requires intensive computation that uses an immense amount of electricity. Some observers say an alternative method, called <a href="https://www.gemini.com/cryptopedia/proof-of-stake-delegated-pos-dpos" rel="noopener noreferrer" target="_blank">"proof-of-stake"</a>, would require less and could be less environmentally harmful. Although proof-of-stake has not been widely adopted, Ethereum has publicly stated it wants to transition to it, in part because of its environmental benefits.
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Beyond environmental concerns, some artists bridle at NFT perks because of their inherent exclusivity and transactional nature.
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Rebecca Arango, aka <a href="https://dot.la/nft-artists-2651366283.html" target="_blank">Oddnesse</a>, thinks the tactic could perpetuate what she views as a deeper problem underlying <a href="https://www.bbc.com/news/entertainment-arts-55232418" rel="noopener noreferrer" target="_blank">the tenuous financial situation that many musicians find themselves in</a>: fans have lost the human connection they once had with the artists behind the music they love.
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"It's like the music just comes and goes and it'll always be there, and if one artist goes broke and gives up, there's always another one where that came from," she said.
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But she concedes she may be fighting an uphill battle.
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"I'm still going to advocate for the [intrinsic] value of the songwriting and the records," said Arango. "[But] if people are really into owning these digital tokens, I'll have to get with the program."
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Sam primarily covers entertainment and media for dot.LA. Previously he was Marjorie Deane Fellow at The Economist, where he wrote for the business and finance sections of the print edition. He has also worked at the XPRIZE Foundation, U.S. Government Accountability Office, KCRW, and MLB Advanced Media (now Disney Streaming Services). He holds an MBA from UCLA Anderson, an MPP from UCLA Luskin and a BA in History from University of Michigan. Email him at samblake@dot.LA and find him on Twitter @hisamblake
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