Illustration by Ian Hurley
What Are LA’s Hottest Startups of 2022? See Who VCs Picked in dot.LA’s Annual Survey
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.
1. Whatnot ($225.4 million raised)
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.
2. Boulevard ($40.3 million raised)
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.
3. GOAT ($492.7 million)
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
VideoAmp ($578.6 raised)
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.
Mythical Games ($269.4 million raised)
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 ($202 million raised)
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 ($70.8 million raised)
Nacelle produces docuseries, books, comedy albums and podcasts. The media company’s efforts include the Netflix travel series “Down To Earth with Zac Efron.”
Wave ($66 million raised)
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.
Papaya ($65.2 million raised)
Sherman Oaks-based Papaya looks to make it easier to pay “any” bill—from hospital bills to parking tickets—via its mobile app.
LeaseLock ($63.2 million raised)
Based in Marina del Rey, LeaseLock says it’s on a mission to eliminate security deposits for apartment renters.
Emotive ($58.1 million raised)
Emotive sells text message-focused marketing tools to ecommerce firms like underwear brand Parade and men's grooming company Beardbrand.
Dray Alliance ($55 million raised)
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 ($43 million raised)
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 ($25 million raised)
HiveWatch develops physical security software. Its investors include former Twitter executive Dick Costollo and NBA star Steph Curry’s Penny Jar Capital.
Popshop ($24.5 million raised)
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.
First Resonance ($19.4 million raised)
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.
Open Raven ($19 million raised)
Founded by Crowdstrike and Microsoft alums, Open Raven aims to protect user data. The cybersecurity firm’s investors include Kleiner Perkins and Upfront Ventures.
Fourthwall ($17 million raised)
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 ($15 million raised)
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.
Safe Health Systems ($15 million raised)
Backed by Mayo Clinic Ventures, Safe Health develops telehealth software and offers tools for enterprises to launch their own health care apps.
Intro ($11.6 million raised)
Intro’s app lets you book video calls with experts—from celebrity stylists, to astrologists, to investors.
DASH Systems ($8.5 million raised)
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.
Ettitude ($3.5 million raised)
With a focus on sustainability, Ettitude is a direct-to-consumer brand that sells bedding, bathroom textiles and sleepwear.
Afterparty ($3 million raised)
Along similar lines as Unblocked, Afterparty creates NFTs for artists and content creators such as Clay Perry and Tropix.
Heart to Heart ($0.75 million raised)
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 (undisclosed)
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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Krankel took on the role of CEO, while Hines became creative director. They brought in gaming veterans Heather Gross as the art lead and Bryant Cannon as lead developer.
The through-line for Night School is story: elevating player choice in much the same way the studios they share a lineage with did. The studio puts the focus on the messy, complicated and overlapping ways a story is communicated through dialogue, whether between unique quirky characters, or occasionally, the game and the player themselves. That also extends to how the studio’s team members work with each other to this day. The approach attracted Netflix, which acquired them for an undisclosed amount in September.
Neither Krankel nor the other staff members contacted for this piece could go into detail about Night School’s new position at Netflix either. But the move hasn’t changed their conversational dynamic. “People should constantly be talking,” Krankel said. “If you think you’re talking too much: you’re still not talking enough.”
That dialogue-first philosophy was evident in Night School’s first game, 2016’s “Oxenfree.” A supernatural thriller set on a local tourist trap island, “Oxenfree” makes good on Hines and Krankel’s early ideas by featuring a near-constant stream of conversation. You play Alex, a teenage girl trying to adapt to big changes in her life. What’s supposed to be one night of teenage mischief turns into an increasingly unsettling series of encounters with ghosts trying to communicate from beyond. The main crux of the game, aside from solving puzzles with a handheld radio, is navigating conversations from the thousands upon thousands of words Hines wrote for the game’s script. You choose one of three possible text bubbles at junctures in each conversation, slightly adjusting the story as it goes along.
The biggest challenge making that happen, according to Krankel, was “building the tools that would empower our designers to make the game while we were making the game.” Communication became key (along with proper documentation of all the design decisions that were made).
“Oxenfree,” available on Windows, MacOS, Xbox One and Nintendo Switch, was a surprise hit. Night School declined to share current sales numbers, but previously announced that the game had sold 1.5 million copies between 2016 and 2019. “Oxenfree” also cleaned up with the critics and the studio’s peers, winning “Excellence in Visual Art'' at the Independent Games Festival Awards in 2016, and scoring a nomination for “Best Debut” and “Best Narrative” at the Game Developers Choice Awards in 2017.
“Oxenfree is a smartly written coming-of-age mystery that holds promise for the future of dialogue-as-game.” Polygon wrote when they named the game one of the best of the last decade. That promise has borne out.
Night School Studio has since grown to 24 full-time employees and released four games, with a fifth on the way. And things could soon get even more busy: In September, Netflix announced it had acquired the company, marking the streaming giant’s first foray into gaming.
The studio has “a track record of successful development and in-house skills” that likely attracted Netflix, said Piers Harding-Rolls, game industry research director at Ampere Analysis.
“The deep narrative and graphical adventure nature of Oxenfree could translate well to video,” he said.
How Night School Came to Netflix
In some ways, the Netflix deal might have been born out of Night School’s relationship with another TV giant.
The immediate follow-up to “Oxenfree,” “Mr. Robot: 1.51exfiltrati0n,” also came out in 2016. A mobile game adapted from USA Network’s hit hacker drama, “Mr. Robot: 1.51exfiltrati0n” places the player into the story, rather than having them play as someone else. Using a fake phone operating system and messaging app, Night School adapted earlier ideas it had for a dating game to tell a story asynchronously across multiple days in the lead-up to the world-altering hack that happens at the end of “Mr. Robot”’s first season. The game is a departure from the studio’s style, but in a way, an even better example of its idea about conversation and dialogue — without a dynamic art style, having intriguing conversations became the whole game.
“Mr. Robot: 1.51exfiltrati0n” allowed Night School to collaborate with the show’s creator Sam Esmail, and brought the studio in contact with Hines’ former employer, Telltale Games. Night School reportedly worked on a companion “Stranger Things” mobile game to accompany Telltale’s own project in the years that followed. In the arrangement, Telltale acted as both publisher and liaison between Night School and Netflix. When Telltale Games went under in 2018, Night School’s work with Netflix’s hit show ended. Still, both the “Mr. Robot” and “Stranger Things” projects proved that the studio was able to work with existing properties.
It may have also put Night School on Netflix’s radar. Krankel contends that Night School was in conversation with Netflix about various projects six or seven months before the Netflix deal came about. “I don't even know if they knew that we were making a Stranger Things game," Krankel told “Game Informer” following the acquisition.
Serendipity or not, the match makes sense. Netflix and Night School have some important opinions in common. Existing interactive Netflix projects like “Bandersnatch” or even “Minecraft: Story Mode” (a Telltale game playable on Netflix) put the focus on player choice. Night School has also produced plenty of world-building right within the wheelhouse of Netflix’s most popular genre properties. An interest in the supernatural and the interior lives of young adults are just two reasons why the creators of “Oxenfree” might have felt comfortable making a “Stranger Things” game (and maybe making another one again down the road).
Night School announced its current project in April 2021. The studio plans to return to the game it made its name on with a sequel called “Oxenfree II: Lost Signals.” The follow-up focuses on an entirely new set of characters, loosely tied to the first, and carries over the distinctive walk-and-talk dialogue and radio mechanics.
Whether “Oxenfree II” eventually shows up as part of Netflix Games – free playable mobile games available with just a Netflix subscription, managed inside the Netflix app –– remains to be seen. Night School has developed for mobile before and even released console titles like “Oxenfree” on iOS. (Netflix did not respond to a request for comment on its plans for Night School, or the studio's existing titles.)
In the short term, Night School’s community director Sara Hebert says development is continuing on “Oxenfree II” uninterrupted, just as Night School promised when both companies announced they were joining forces. “Everything is indeed so new and it’s only been a few short weeks,” Hebert shared via email. “Day-to-day, our studio remains focused on creating great games and maintaining our studio culture.”
Ultimately, working with Netflix is an opportunity for a small studio to get its games in front of the streaming service’s millions of subscribers. Netflix offers “an unprecedented canvas to create and deliver excellent entertainment to millions of people,” Krankel said in his announcement of the acquisition. Now Night School just has to keep building.
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