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What Are LA’s Hottest Startups of 2022? See Who VCs Picked in dot.LA’s Annual Survey
Harri Weber
Harri is dot.LA's senior finance reporter. She previously worked for Gizmodo, Fast Company, VentureBeat and Flipboard. Find her on Twitter and send tips on L.A. startups and venture capital to harrison@dot.la.
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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Harri Weber
Harri is dot.LA's senior finance reporter. She previously worked for Gizmodo, Fast Company, VentureBeat and Flipboard. Find her on Twitter and send tips on L.A. startups and venture capital to harrison@dot.la.
Why Women’s Purchasing Power Is a Huge Advantage for Female-Led Leagues
05:00 AM | June 12, 2023
Samson Amore
According to a Forbes report last April, both the viewership and dollars behind women’s sports at a collegiate and professional level are growing.
In 2022, the first 32 games of the NCAA tournament had record attendance levels, breaking records set back in 2004, and largely driven by the new and rapidly growing women’s NCAA tournament. WNBA openers this year saw a 21% spike in attendance, with some teams including the LA Sparks reporting triple-digit ticket sales growth, about 121% over 2022’s total. In 2023, the average size of an LA Sparks crowd swelled to 10,396 people, up from 4,701 people.
Women make up half the population, but “also 50% of the folks that are walking into the stadium at Dodger Stadium, or your NFL fans are just about 50% women,” noted Erin Storck, a panelist and senior analyst at Los Angeles-based Elysian Park Ventures.
Storck added that in heterosexual households, women generally manage most of the family’s money, giving them huge purchasing power, a potential advantage for female-run leagues. “There's an untapped revenue opportunity,” she noted.
In the soccer world, Los Angeles-based women’s soccer team Angel City FC has put in the work to become a household name, not just in LA County but across the nation. At an LA Tech Week panel hosted by Athlete Strategies about investing in sports, Angel City head of strategy and chief of staff Kari Fleischauer said that years before launching the women’s National Women’s Soccer League team, Angel City FC was pounding the pavement letting people know about the excitement ladies soccer can bring. She noted community is key, and that fostering a sense of engagement and safety at the team’s home venue, BMO stadium (formerly Banc of California Stadium), is one reason fans keep coming back.
Adding free metro rides to BMO stadium and private rooms for nursing fans to breastfeed or fans on the spectrum to avoid sensory overload, were just some of the ways ACFC tried to include its community in the concept of its stadium, Fleischauer said. She noted, though, that roughly 46% of Angel City fans are “straight white dudes hanging out with their bros.”
“Particularly [on] the woman's side, I'd like to think we do a better job of making sure that there's spaces for everyone,” Fleischauer told the audience. “One thing we realize is accessibility is a huge thing.”
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Samson Amore
Samson Amore is a reporter for dot.LA. He holds a degree in journalism from Emerson College. Send tips or pitches to samsonamore@dot.la and find him on Twitter @Samsonamore.
https://twitter.com/samsonamore
samsonamore@dot.la
PodcastOne Aims to Become the First Publicly-Traded Podcasting Powerhouse
11:19 AM | April 13, 2023
PodcastOne, a division of audio streaming and event company LiveOne, is planning to go public in a deal that would make it the first Los Angeles podcast-exclusive audio company to be publicly traded.
Several of PodcastOne’s biggest competitors – iHeartMedia, SiriusXM and Spotify – already have publicly listed securities. But Beverly Hills-based PodcastOne would be the first local podcast company to go public.
“All those guys are our partners,” LiveOne CEO Robert Ellin said of Spotify and Apple. “We distribute across all of them. [But] we’re very different, we are a small production distribution house that is laser focused on only podcasting whereas podcasting is a piece of their business, but it’s a much smaller piece [of] their overall companies.”
Ellin said that many of PodcastOne’s creators are also equity holders in the company, and stand to benefit directly from this listing. The CEO also claimed it would give podcast fans a chance to invest directly in the content they care about.
PodcastOne was launched in March 2007 by PodcastOne founder and president Kit Gray and National Radio Hall of Famer Norm Pattiz, who previously ran radio syndication firm WestwoodOne. LiveOne, formerly known as LiveXLive, bought PodcastOne in July 2020 for $16.1 million.
The deal saw PodcastOne become a wholly owned subsidiary of LiveOne, which itself went public in October 2017. Currently, LiveOne is not profitable, but it’s hoping another public spin-off could tip the scales.
The offering would spin out PodcastOne as a separate division of LiveOne and expects shares to begin trading at around $8 to $12 each. PodcastOne didn’t disclose how much it expected to net from the offering or when it expects to actually begin trading.
In 2021, the podcast advertising market surpassed $1 billion in ad revenue for the first time. It’s estimated that roughly 20% of internet users worldwide listened to podcasts in 2022, and that’s expected to grow to 23.5% by next year, according to analysts at Insider Intelligence.
But while podcast listenership is there, the advertising and sponsorship dollars are more flighty. To that end, Ellin said he expects this year will be “really tough” for sponsorship as companies cut ad spend to weather a more tumultuous economic climate. But, he expects the industry will mature and asserted, “it’s going to [grow] $10 billion over the next 10 years.”
Gray agreed and added, “the whole world is slowing down in terms of advertising spend, [and] people are making sure they’re spending money on stuff that works.” He noted that podcasts provide a generally straightforward picture of audience engagement, since most podcast ads are still affiliate links: hosts offer a code, and advertisers can see how many people use it to sign up for the service.
In a February quarterly filing, LiveOne reported that 35% of its revenue came from advertising. That was mainly driven by PodcastOne, which helped grow the company’s advertising revenue by 3% annually in 2022. Ads were the second-largest share of its income besides paid customer revenue – and the LiveOne network has approximately 1.9 million paid members. Overall last year, PodcastOne lost $3 million on revenue of $32.3 million.
It’s no wonder then that the company is keen to expand its podcast business to public markets. If all goes well, it could open the door for more content with which to sell even more valuable advertising.
“We’re [at a] $125 million valuation,” Ellin said. “Overall, as I see this industry, not only are you going to have the growth in just pure podcasting, but podcasting, live shows, products around podcasts.”
Ellin told dot.LA that existing shareholders of LiveOne will automatically receive dividends of PodcastOne stock based on how many LiveOne shares they hold; up to 16%. New investors will have the chance to buy in once PodcastOne is public under the symbol “PODC.” In a recent S-1 filing, PodcastOne said it plans to list on the NASDAQ.
Some of PodcastOne’s more than 200 shows include “The Adam Carolla Show,” “Ladygang,” and “Gals on the Go,” and cumulatively they garner around 5.2 unique million monthly downloads in the U.S. and 32.7 million monthly downlaods globally. It also recently acquired the distribution and ad rights for two new shows, “Causing a Scene with Sara and Natalie” and “I’ve Had It.”
Gray told dot.LA that while the network’s shows run the gamut from sports to true crime to literature, it really targets one demographic in particular: Moms. That’s mainly because ad agencies were eager to capture their purchasing power in households. Ironically, though, female podcast hosts have a harder time selling ads than men, as well as a steeper climb up the charts.
“We created a female network that is second to none,” Gray said. And as such, there’s a lot of content on PodcastOne geared towards women aged 25-44. But this upcoming public offering could give the company a chance to further expand its audience.
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Samson Amore
Samson Amore is a reporter for dot.LA. He holds a degree in journalism from Emerson College. Send tips or pitches to samsonamore@dot.la and find him on Twitter @Samsonamore.
https://twitter.com/samsonamore
samsonamore@dot.la
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