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What Are LA’s Hottest Startups of 2022? See Who VCs Picked in dot.LA’s Annual Survey
05:00 AM | January 31, 2022
In Los Angeles—like the startup environment at large—venture funding and valuations skyrocketed in 2021, even as the coronavirus pandemic continued to surge and supply chain issues rattled the economy. The result was a startup ecosystem that continued to build on its momentum, with no shortage of companies raising private capital at billion-dollar-plus unicorn valuations.
In order to gauge the local startup scene and who’s leading the proverbial pack, we asked more than 30 leading L.A.-based investors for their take on the hottest firms in the region. They responded with more than two dozen venture-backed companies; three startups, in particular, rose above the rest as repeat nominees, while we've organized the rest by their amount of capital raised as of January, according to data from PitchBook. (We also asked VCs not to pick any of their own portfolio companies, and vetted the list to ensure they stuck to that rule.)
Without further ado, here are the 26 L.A. startups that VCs have their eyes on in 2022.
Whatnot was the name most often on the minds of L.A. venture investors—understandably, given its prolific fundraising year. Whatnot raised some $220 million across three separate funding rounds in 2021, on the way to a $1.5 billion valuation.
The Marina del Rey-based livestream shopping platform was founded by former GOAT product manager Logan Head and ex-Googler Grant LaFontaine. The startup made its name by providing a live auction platform for buying and selling collectables like rare Pokémon cards, and has since expanded into sports memorabilia, sneakers and apparel.
Boulevard’s backers include Santa Monica-based early-stage VC firm Bonfire Ventures, which focuses on B2B software startups. The Downtown-based company fits nicely within that thesis; Boulevard builds booking and payment software for salons and spas. The firm has worked with prominent brands such as Toni & Guy and HeyDay.
GOAT launched in 2015 as a marketplace to help sneakerheads authenticate used Air Jordans and other collectible shoes. It has since grown at a prolific rate, expanding into apparel and accessories and exceeding $2 billion in merchandise sales in 2020. The startup sealed a $195 million funding round last summer that more than doubled its valuation, to $3.7 billion.
The Best of the Rest
Nielsen competitor VideoAmp gathers data on who's watching what across streaming services, traditional TV and social apps like YouTube. The company positions itself as an alternative to so-called "legacy" systems like Nielsen, which it says are "fragmented, riddled with complexity and inaccurate." In addition to venture funding, its total funding figure includes more than $165 million in debt financing.
Seizing on the NFT craze, Mythical Games is building a platform that powers the growing realm of “play-to-earn games.” Backed by NBA legend Michael Jordan and Andreessen Horowitz, the Sherman Oaks-based startup’s partners include game publishers Abstraction, Creative Mobile and CCG Lab.
FloQast founder Michael Whitmire says he got a “no” from more than 100 investors in the process of raising a seed round. Today, the accounting software company is considered a unicorn.
Nacelle produces docuseries, books, comedy albums and podcasts. The media company’s efforts include the Netflix travel series “Down To Earth with Zac Efron.”
A platform for virtual concerts, Wave has hosted performances by artists including Justin Bieber, Tinashe and The Weeknd. The company says it has raised $66 million to date from the likes of Warner Music and Tencent.
Sherman Oaks-based Papaya looks to make it easier to pay “any” bill—from hospital bills to parking tickets—via its mobile app.
Based in Marina del Rey, LeaseLock says it’s on a mission to eliminate security deposits for apartment renters.
Emotive sells text message-focused marketing tools to ecommerce firms like underwear brand Parade and men's grooming company Beardbrand.
Based in Long Beach, Dray says its mission is to “modernize the logistics and trucking industry.” Its partners include Danish shipping company Maersk and toy maker Mattel.
Coco makes small pink robots on wheels (you may have seen them around town) that deliver food via a remote pilot. Its investors include Y Combinator and Silicon Valley Bank.
HiveWatch develops physical security software. Its investors include former Twitter executive Dick Costollo and NBA star Steph Curry’s Penny Jar Capital.
Whatnot competitor Popshop is betting that live-shopping is the future of ecommerce. The West Hollywood-based firm focuses on collectables such as trading cards and anime merchandise.
Founded by former SpaceX engineer Karan Talati, First Resonance runs a software platform for makers of electric cars and aerospace technology. Its clients include Santa Cruz-based air taxi company Joby Aviation and Alameda-based rocket company Astra.
Founded by Crowdstrike and Microsoft alums, Open Raven aims to protect user data. The cybersecurity firm’s investors include Kleiner Perkins and Upfront Ventures.
When an actor faces the camera and speaks directly to the audience, it’s known as “breaking the fourth wall.” Named after the trope, Venice-based Fourthwall offers a website builder that’s designed for content creators.
The Non Fungible Token Company creates NFTs for musicians under the name Unblocked. Its investors include Jay Z’s Marcy Venture Partners and Shawn Mendez.
Backed by Mayo Clinic Ventures, Safe Health develops telehealth software and offers tools for enterprises to launch their own health care apps.
Intro’s app lets you book video calls with experts—from celebrity stylists, to astrologists, to investors.
With the tagline “Land the package, not the plane,” DASH Systems is a Hawthorne-based shipping company that builds hardware and software for automated airdrops.
With a focus on sustainability, Ettitude is a direct-to-consumer brand that sells bedding, bathroom textiles and sleepwear.
Along similar lines as Unblocked, Afterparty creates NFTs for artists and content creators such as Clay Perry and Tropix.
Heart to Heart is an audio-focused dating app that “lets you listen to the story behind the pictures in a profile.” Precursor Ventures led the pre-seed funding round.
Frigg makes hair and beauty products that contain cannabinoids such as CBD. The Valley Village-based company raised an undisclosed seed round in August.
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06:00 AM | December 12, 2022
Photo courtesy of Ford
Pacific Gas and Electric is in the midst of enrolling customers into an ambitious new pilot program that seeks to use electric car vehicles as a means of powering daily life and stabilizing the grid.
The “Vehicle to Everything” pilot envisions a future in which automobiles not only draw their power from the electrical grid but can also strategically add electricity back in when demand is high — and generate some money for their owners along the way.
The concept of bidirectional energy flow using EV batteries isn’t new, and dot.LA has covered various vehicle-to-grid endeavors in the past. But having a utility company as large as PG&E onboard could begin to transform the idea into a reality.
Though the program’s website has been live for a few weeks, PG&E officially began to invite customers to pre-enroll starting on December 6th. The pilot has space for 1,000 residential customers and 200 commercial customers. PG&E isn’t releasing the numbers for how many people have signed up so far, but Paul Doherty, a communications architect at the company, says he expects the enrollment period to take several months, stretching into Q1 2023.
On the residential side, customers can receive financial incentives up to $2,500 just for enrolling in the pilot. That money, says Doherty, goes towards the cost of installing a bidirectional charger at the customer’s residence. The cost of installation varies according to the specifications of the residence, but Doherty says it’s unlikely that $2,500 will cover the full cost for most users, though it may come close, with most installations ranging in the low thousands.
But there’s more money to be had as well. Once the bidirectional charger is installed, customers can not only use the electricity to power their homes but also begin selling electricity back to the grid during flex alerts. Southern California residents may remember back in September when the electric grid was pushed to its breaking point thanks to an historic heatwave. During such events–or any other disaster that strains the system–customers can plug their vehicle in, discharge the battery and get paid.
Doherty says that users can expect to make between $10 and $50 per flex alert depending on how severe the event is and how much of their battery they’re willing to discharge. That might not seem like a huge sum, but the pilot program is slated to last two years. Meaning that if California averages 10 flex alerts per year like in 2022, customers could make $1,000. That could be enough to offset the rest of the bidirectional charger installation or provide another income stream. Not to mention, help stabilize our beleaguered grid.
There is one gigantic catch, however. PG&E has to test and validate any bi-directional charger before it can be added into the program. So far, the only approved hardware is Ford’s Charge Station Pro, meaning only one vehicle–the F-150 Lightning–can participate in the program. That should change soon as the utility company tests additional hardware from other brands. Doherty says they’re expecting to add the Nissan LEAF, Hyundai’s IONIQ 5, the KIA EV6 and others soon since it’s just a matter of testing and integrating those chargers into the program.
One name notably absent from that list is Tesla. So far, the country’s largest EV presence hasn’t announced concrete plans for bidirectional charging, meaning there’s no way for Tesla owners to participate in the pilot.
“We hope they come to the table as soon as possible,” says Doherty. “That would be a game changer.”
The commercial side of the pilot looks similar to the residential. Businesses receive cash incentives upfront to help offset the cost of installing bidirectional charger and then get paid for their contribution to stabilizing the grid in times of duress. PG&E says electric school bus fleets, especially, represent attractive targets for this technology due to their large battery capacity, high peak power needs, and predictable schedule–a strategy that mirrors what V2G pioneer Nuvve described to dot.LA back in October.
If California’s plan to transition all new car sales to electric by 2035 actually succeeds — which would require it to add nearly two million new EVs to state roads every year — that’s two million rolling, high power batteries with the potential to power our homes, our jobs and the grid at large. Getting there will be a colossal undertaking, but PG&E’s pilot should be a litmus test of sorts, assuming they can figure out how to get more vehicles than the Ford Lightning into the program.
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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.
Photo by Thibault Penin on Unsplash
Netflix’s earnings report contained a few surprises this fourth quarter, including the news that its founder and leader for 25 years Reed Hastings would step down.
The company also managed to subvert analysts’ expectations by adding a hefty chunk of subscribers in its fourth quarter – causing the stock to tick up over 7% in after-hours trading. Netflix called 2022 a “tough year, with a bumpy start but a brighter finish,” and claimed that it had a “clear path to reaccelerate our revenue growth” as well as “building even greater profitability over time.”
Part of that profitability will come as the streaming service opens itself up to more users with more flexible pricing plans. Earlier this year Netflix announced it would offer a new subscription model that was cheaper, but supplemented by ads. The company launched that offering in November. People were skeptical at first about this new tier (after all, for most of its existence Netflix prided itself on not having ads), but it seems to be paying off, since Netflix gained a sizable chunk of subscribers this month – thanks to big hits like the Addams Family reboot “Wednesday,” “Stranger Things 4,” and Rian Johnson’s film “Glass Onion.”
The third quarter balance sheet was strong. Netflix posted revenue of $7.9 million for the fourth quarter, up 2% from this time last year. Annually, Netflix posted revenue of $32 billion, with about $4.5 billion left over in net income after expenses, compared to about $5 billion last year.
That said, Netflix holders have seen a slight dip in performance in the last year, with cumulative returns down 51%. Still, within the last five years the stock’s return is up 54%, and according to Bloomberg’s Dec. 31 figures, Netflix’s stock has generated a return of 2,129% in the last decade.
Here are a few big takeaways from today’s earnings, and what we have our eye on for Netflix’s upcoming fiscal year.
Hastings says goodbye
Reed Hastings, who co-founded Netflix in 1997, announced today he’d step down from his role as co-CEO. Netflix has operated with this co-CEO model for a while now; previously Hastings held the job alongside co-CEO Ted Sarandos. But now Hastings will cede his position to Greg Peters, the company’s former chief operating officer.
Hastings will still remain involved with the company as chairman of the board. He noted in a blog post Thursday that the reshuffle is basically a formalization of what’s already been happening inside the company’s C-suite, and said that he’s “increasingly delegated the management of Netflix” to Peters and Sarandos over the last two and a half years anyway.
Subscribers are up, surprisingly
The streaming service added roughly 7.7 million subscribers in the fourth quarter of 2022. This exceeded the company’s expectations, Netflix previously said it assumed it’d add only about 4.5 million new subscribers this quarter. To date, Netflix has 231 million paid subscribers globally, and its previous target was 227.6 million.
All eyes were on Netflix’s new ad-supported tier, which debuted for $6.99/month in November as part of a venture with Microsoft. While Netflix didn’t specify exactly how many of these new subscribers were paying for that specific plan, it’s pretty clear, based on the number of new subscribers, that the venture is paying off. Especially as streaming services across the board are getting more expensive.
Peters said during an earnings interview Thursday that engagement with the ad-supported plans is roughly on par with its more expensive counterpart. Netflix’s chief financial officer Spencer Neumann said he estimates about half of competitor Hulu’s subscriber base is on a similar ad tier, and said he expects Netflix’s ad business to be just as large as Hulu’s “within several years.”
Netflix also said customer and advertiser engagement with the ad-supported plan is better than expected, though it did say it aims to improve how it targets and measures those customers.
Overall, Netflix said the reaction from subscribers to the cheaper plan confirmed that it is not only a worthy offering but also has a shot at generating the same revenue, if not more, than its ad-free tier. Keep an eye on how Netflix reports growth this year, and if it will indeed offer more options for ad-based plans.
Unusually, Netflix declined to share specifics about its other developing business: gaming. In just over a year, the company pushed out 50 games, and said it plans to offer more games based on hit Netflix shows in the coming year.
Password sharing is still a bother
Finally, Netflix knows you’re still using your grandma’s password to watch “Wednesday,” and it’s getting fed up.
We’ve discussed the streamer’s ambitions to crack down on password sharing, and that came up during today’s earnings report. Netflix said it estimates 100 million households, if not more, share accounts, which it claims “undermines” its ability to make the service better.
To combat this, Netflix announced it will soon roll out paid sharing, a plan that would allow users to give permission to family and friends to join their plan even if they’re not part of the same household. It’s unclear how much this plan might cost, but Netflix said it will soon let users review which devices are using the app and transfer profiles to different accounts. It’ll also soon give users the option to pay extra to share the service with people they don’t live with – though that’s definitely happening already, and it’s unclear exactly how the company will prevent people from mooching.
Netflix also noted this move might tick off some account borrowers who might stop watching because they don’t want to pay for an account, and warned “near-term engagement” could suffer. But it claimed that its “great slate of programming” will continue to reel in more people than it loses. We shall see about that.
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Samson Amore is a reporter for dot.LA. He holds a degree in journalism from Emerson College. Send tips or pitches to firstname.lastname@example.org and find him on Twitter @Samsonamore.
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