
Get in the KNOW
on LA Startups & Tech
XValuations for LA's Early-Stage Startups Soared in Early 2021, Outpacing Other Hubs
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.

Startup valuations are up just about everywhere, but no major city in the U.S has seen the estimated value of early-stage startups spike this year quite like they have in Los Angeles, where competition for deals is reaching a fever pitch.
For budding L.A. startups, pre-money valuations have been eye-popping in the first half of 2021, rising 116% from last year to a median of $65 million, according to a recent Pitchbook report. Nearly every startup hub in the U.S. saw increases in the same period, but the jump was most pronounced in L.A.
In the San Francisco Bay Area, for example, the median rose nearly 43% over the same period to $50 million.
"Especially within hubs, such as L.A., competition for deals has grown considerably in recent years, with the flood of new investors and more capital looking to invest in startups," said Pitchbook Senior VC Analyst Kyle Stanford, who authored the report. "Los Angeles has, on its own, seen strong fundraising numbers, bringing more local capital to the ecosystem, expanding opportunities for the area's companies."
Median early-stage pre-money valuation ($M) by ecosystemPitchbook
Calculating valuations is more of an art than a science, since young companies aren't likely to have noteworthy revenues or profits. Instead, venture firms make funding deals based on an agreed valuation often determined by the credentials of a founding team, early progress (a.k.a. traction) and larger trends in the industry, including how much competition there is among investors to snap up shares. The approach has led to frequent criticism that venture dollars tend to be directed mostly to a small circle of individuals who have access to firms.
For entrepreneurs who are able to secure funds, a hot market can send deal sizes soaring.
Median early-stage deal size ($M) by ecosystemPitchbook
Over the summer, booming competition translated to fatter rounds for startups operating in L.A. Tango, a workforce training startup, raised a $5.7 million seed round in August. A month earlier, employee benefits company JOON announced a $2.3 million seed. While Tango raised more than twice as much as JOON, both deals reflect how early-stage fundraises have swelled in the past decade. In 2010, the median seed deal in the U.S. clocked in at $500,000, according to Pitchbook. By the second quarter of 2021, the median reached $2.6 million.
Valuations are rising across the board as VCs and hedge funds compete for the hottest deals amid access to cheap cash. But such founder-friendly market conditions — which are observable in L.A. and other startup hubs — come with potential drawbacks for executives and employees alike, should a correction deflate lofty startup valuations before they're able to cash in their shares.
'Excesses' in the Market Today
The phenomenon described by Stanford is not limited to emerging businesses: Late-stage startup valuations rocketed in the first half of 2021, too. In L.A., the median pre-money valuation for these companies increased 138% to $175 million, according to the report. Pitchbook recorded the highest median late-stage valuation in the Bay Area at $275 million.
"Combined with its relative proximity to the Bay Area and its huge amount of venture capital, Los Angeles startups have capitalized on the excesses being seen within the market today," Stanford said. That trend is likely to continue, at least in the short term, the author of the Pitchbook report added. "Every indication is that valuations will remain high for the second half of this year and likely into or through 2022."
While now is a good time to raise funds, that could change. The "global startup funding frenzy" has spurred some fears of another tech bubble. "This feels a lot like 1999 to me," London-based Hoxton Ventures partner Hussein Kanji told CNBC earlier this year.
Generally, startups "should be aware that any correction may lead to down rounds in the future, and down rounds are very painful especially for common shareholders (founders, employees)," Stanford finance professor Ilya Strebulaev told dot.LA in an email. "For employees, an important question is the fair value of their stock options, which is not always easy to determine."
- The Early-Stage Startups in LA Set to Take Off in 2021 - dot.LA ›
- The Hottest LA Startups of 2020 - dot.LA ›
- Megadeals, IPOs and Multibillion-Dollar Valuations: LA's Startup ... ›
- VCs See Valuations Reach Record Highs as Optimism Stays High ... ›
- Largest Raises in Los Angeles in 2021 - dot.LA ›
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.
Subscribe to our newsletter to catch every headline.
This Week in ‘Raises’: Improvado Hauls $22M, Clearlake Launches $14B Fund
Kristin Snyder is an editorial intern for dot.la. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.
This week in “Raises”: A pair of Web3 platforms for gamers landed funding, as did a Manhattan Beach medical startup looking to bolster primary care via nurse practitioners. Meanwhile, a Santa Monica-based investment firm launched its seventh fund with more than $14 billion in dry powder.
Venture Capital
Improvado, a marketing data aggregation platform, raised $22 million in a Series A funding round led by Updata Partners.
Web3 gaming platform FreshCut raised $15 million in funding led by Galaxy Interactive, Animoca Brands and Republic Crypto.
Medical startup Greater Good Health raised $10 million in a funding round led by LRVHealth.
Joystick, a Web3 platform for gamers and creators, raised $8 million in seed funding.
Open source data protection company CipherMode Labs raised $6.7 million in seed funding led by Innovation Endeavors .
Mobile phone charging network ChargeFUZE raised $5 million in seed funding led by Beverly Pacific, TR Ventures, VA2, Jason Goldberg and Al Weiss.
Polygon, a startup aiming to better diagnose children with learning disabilities, raised $4.2 million in seed and pre-seed funding led by Spark Capital and Pear VC.
Pique, a virtual women's sexual health clinic, raised $4 million in a seed funding round led by Maveron.
Psudo, a sneaker startup that utilizes recycled water bottles and 3D sublimation printing to create its shoes, raised $3 million in a seed funding round led by SternAegis Ventures.
Funds
Santa Monica-based investment firm Clearlake Capital Group raised $14.1 billion for its seventh flagship fund.
Raises is dot.LA’s weekly feature highlighting venture capital funding news across Southern California’s tech and startup ecosystem. Please send fundraising news to Kristin Snyder (kristinsnyder@dot.la).Kristin Snyder is an editorial intern for dot.la. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.
LA Tech ‘Moves’: New Head of Originals at Snap, New President at FaZe Clan
Kristin Snyder is an editorial intern for dot.la. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.
“Moves”, our roundup of job changes in L.A. tech, is presented by Interchange.LA, dot.LA's recruiting and career platform connecting Southern California's most exciting companies with top tech talent. Create a free Interchange.LA profile here—and if you're looking for ways to supercharge your recruiting efforts, find out more about Interchange.LA's white-glove recruiting service by emailing Sharmineh O’Farrill Lewis (sharmineh@dot.la). Please send job changes and personnel moves to moves@dot.la.
***
FaZe Clan brought on Zach Katz as the gaming and media company’s new president and chief operating officer. Katz was previously the chief executive officer of the music tech investment fund Raised in Space Enterprises.
TikTok brand factory LINK Agency promoted Dustin Poteet to chief creative officer. Poteet was previously creative director at the firm.
Livestream shopping platform Talkshoplive hired Tradesy co-founder John Hall as its chief technology officer. Universal Music Group Nashville's former vice president of digital marketing, Tony Grotticelli, also joins the company as vice president of marketing.
Anjuli Millan will take over as head of original content at Snap after three years of overseeing production for the division.
Tech and media company Blavity hired Nikki Crump as general manager of agency. Crump joins the company from Burrell Communications Group.
O'Neil Digital Solutions, which provides customer communications and experience management for the health care industry, hired Eric Ramsey as national account sales executive. Ramsey joins from T/O Printing.
Investment firm Cresset Partners named Tammy Funasaki as managing director of business development. Funasaki previously served as head of investor relations for Breakwater Management.
- LA Tech Updates: Artie Closes $10M Seed Round; FaZe Clan Has a ... ›
- FaZe Clan Announces Immersive Pop-Up Shop - dot.LA ›
Kristin Snyder is an editorial intern for dot.la. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.
Snapchat’s New Controls Could Let Parents See Their Kids’ Friend Lists
Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.
Snapchat is preparing to roll out enhanced parental controls that would allow parents to see who their teenagers are chatting with on the social media app, according to screenshots of the upcoming feature.
Snap’s parental controls.
Courtesy of Watchful.
Snapchat is planning to introduce Family Center, which would allow parents to see who their children are friends with on the app and who they’ve messaged within the last seven days, according to screenshots provided by Watchful, a product intelligence company. Parents would also be able help their kids report abuse or harassment.
The parental controls are still subject to change before finally launching publicly, as the Family Center screenshots—which were first reported by TechCrunch—reflect features that are still under development.
Santa Monica-based Snap and other social media giants have faced mounting criticism for not doing more to protect their younger users—some of whom have been bullied, sold deadly drugs and sexually exploited on their platforms. State attorneys general have urged Snap and Culver City-based TikTok to strengthen their parental controls, with both companies’ apps especially popular among teens.
A Snap spokesperson declined to comment on Friday. Previously, Snap representatives have told dot.LA that the company is developing tools that will provide parents with more insight into how their children are engaging on Snapchat and allow them to report troubling content.
Yet Snap’s approach to parental controls could still give teens some privacy, as parents wouldn’t be able to read the actual content of their kids’ conversations, according to TechCrunch. (The Family Center screenshots seen by dot.LA do not detail whether parents can see those conversations).
In addition, teenage users would first have to accept an invitation from their parents to join the in-app Family Center before those parents can begin monitoring their social media activity, TechCrunch reported.
Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.