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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Image by Maylin Tu
“I’m like, ‘Listen, man — I’m the boss. Listen to me: Don’t report bad stuff — you’re confusing me. Email me, tell me, ‘I need [a] free unlock’ — I'll give it to you,” he said
For another, there’s his timing.
“I don't know that winter is the best time of year to launch a new scooter company,” said Harry Campbell, founder of influential industry blog, The Rideshare Guy. “When it's raining and [there’s] less rides and less tourists and things like that in the Southern California area.”
TukTuk, Dabbagh’s company, is the latest arrival to the Los Angeles e-scooter wars, hitting the streets just as Lyft and Spin bow out.
TukTuk received a permit to operate in the city of L.A. in the spring. It recently opened a new headquarters and warehouse space in an old skate shop in Palms, a neighborhood just north of Culver City, for the launch. Scooters cost $1 to unlock and $0.45 per minute to ride. The company also offers discounts to students and unlimited free 30 minute rides for those who qualify for its low-income program. Currently, TukTuk’s vehicles are only permitted to operate in the city of L.A.
It officially launched last month when it received its scooters from China. The company deploys the latest model of Segway Ninebot e-scooters, boasting features that include turn signals, front suspension and a removable battery. The company will also be deploying scooters from Freego, an e-scooter and e-bike manufacturer.
Founded in 2019, TukTuk initially did test runs in Simi Valley, Santa Clarita, Valencia and Istanbul. In Simi Valley, according to the Ventura County Star, TukTuk embraced a “launch first, ask questions later” strategy — as pioneered by Bird — and was promptly ordered off the streets.
Soon thereafter, the company was hit by a global pandemic, a development that decimated the transportation industry. L.A. is TukTuk’s first official North American market launch, but Dabbagh isn’t ruling out a return to Simi Valley.
“Give me Simi Valley — it’s better than Santa Monica,” he said (though he’s also planning to apply to operate in Santa Monica when they reopen permit applications).
A serial entrepreneur, Dabbagh’s background is in the transportation industry, running a limousine rental business with family for almost 25 years. TukTuk doesn’t have investors — yet — Dabbagh is paying all of the capital costs himself. For 2,000 e-scooters, he estimates the total runs around $3 million.
Photo by Maylin Tu
Building Brand Trust As a Competitive Advantage
TukTuk doesn’t have the same brand recognition as some of the bigger players like Bird, Lime and Superpedestrian. But smaller companies can still be successful, says Vince Cifani, CEO of Joyride, a micromobility platform for entrepreneurs looking to start their own e-scooter or bike business.
“Bird and Lime might tell you they're a technology business, right? Their core competency is technology. But really, this is an operations business,” he said.
Building brand trust without name recognition and venture capital backing might be as simple as providing a positive customer experience and speaking the “local voice” of the community.
“Who's providing better customer support? Is it the on-the-ground entrepreneur who lives and breathes in that city their entire life? Or is it going to be Bird or Lime who — at the whiff of not being profitable — might leave that city any moment.”
Although entrepreneurs can thrive in smaller markets and in partnerships with hotels and schools, it’s rare to see them in bigger cities such as L.A., particularly when there’s so much competition. L.A. is an open-permit market, which means it doesn’t restrict the number of companies that can operate in the city.
According to LADOT, there were an average of 13,000 vehicles per day on city streets during 2021 and 2022, although this number varies by weather, season and day of the week. Each operator is permitted to deploy up to 6,000 vehicles. With TukTuk, there are now a total of six operators.
The Rideshare Guy’s Campbell noted that as the quality of vehicles has improved, riders are no longer looking for a superior product, but are more likely to choose a ride based on other factors, such as convenience .
“Really, I think the hurdle is just getting them to download the app,” he said.
“There's tons of data that show the scooter that gets rented is the scooter that's closest to you,” added Joyride’s Cifani.
Humble Beginnings, Ambitious Plans
Born and raised in Syria, Dabbagh has lived in L.A. since 1992, making him the first homegrown Angeleno to launch an e-scooter company (Bird was founded in Santa Monica and Wheels in West Hollywood). As the company grows, he expects to hire locally.
“I am Los Angeles,” he said.
Dabbagh might have a home court advantage, but the launch hasn’t been without its hiccups. He said he was unaware that Culver City requires its own separate permitting process when he deployed vehicles there. The city soon asked him to remove his scooters.
Running a shared micromobility company isn’t easy, Dabbagh told dot.LA. Ordering the scooters is one thing, getting them shipped is another. Then there’s assembly, charging the batteries, troubleshooting the app, dealing with customers and staff and on and on.
But he has big plans for expanding his business in cities, counties and states like Las Vegas, South Carolina, North Carolina, Orange County, Ventura County and San Diego.
“I'm so proud of myself. I'm part of those multi-billion dollar company — I’m like them — I have the permit. They have it, but this is my money. Not anybody else's money.”
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