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XM13 Doubles Down on Web3 With $400 Million Third Fund
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.

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M13, the consumer tech-focused venture capital firm that has backed the likes of Snap, Bird and Lyft, has landed by far its largest fundraising haul to date—raising $400 million for its third fund.
The new fund far exceeded M13’s target of $275 million raised, the Santa Monica-based firm said Thursday. It plans to deploy the cash to early-stage startups across four broad investment categories: work, commerce, health and money.
These sectors aren’t anything new to the six-year-old firm—but this time, M13 plans to boost its focus on Web3, which encompasses blockchain-powered technologies such as cryptocurrencies and NFTs.
M13 partner and cofounder Carter Reum.
“Every company that we invest in, in all four of those verticals, has to be thinking about Web3 and the underpinnings of Web3,” M13 co-founder and partner Carter Reum said in a call with dot.LA. “Not every company [M13 invests in] is going to be a web3 company, but it is a horizontal layer that’s going to sit across all of these industries.”
The venture firm’s third fund clocks in at more than twice the size of its second fund, which was also oversubscribed with $188 million raised in 2019. Four years earlier, M13 secured $92 million for its first fund. Reum says the firm now has $750 million in assets under its management. (Disclosure: M13 is an investor in dot.LA.)
“We’ve shown repeatability with two top-performing funds,” Reum said. “The only reason this fund is larger is that we believe our model around propulsion—this large operating team we have that works with our portfolio companies—is fundamentally impacting the companies that we invest in by helping them scale faster.”
M13 currently cuts checks as large as $15 million, with Reum telling dot.LA that the firm now seeks an ownership stake of 20% in the startups it funds—up from 15% in previous funds.
M13’s rise mirrors the growth of the broader Los Angeles and Southern California startup scenes, as well as the venture capital industry at large. Across more than 150 deals to date, M13 says it has backed 15 early-stage startups that have each reached valuations north of $1 billion each. As well as L.A.-based giants like Snap and Bird, those companies include smoothie brand Daily Harvest, 3D software firm Matterport and home security company Ring, which Amazon snapped up in 2018.
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- M13’s Carter Reum On His New $400 Million Fund - 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.
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TikTok Joins Forces with Cyversity for Minority Scholarship Cybersecurity Training Program
A press release published Thursday by the non-profit association Cyversity announced a partnership with TikTok to create a scholarship program for underrepresented people seeking to begin or further their careers in cybersecurity.
This is undoubtedly an excellent partnership for Cyversity, whose stated mission is to “achieve the consistent representation of women and underrepresented minorities in the cybersecurity industry through programs designed to diversify, educate, and empower.”
Cyversity exists to answer an obvious need. According to an October 2021 report from the Information Systems Audit and Control Association (ISACA), just 26% of cybersecurity workers are women or traditionally marginalized people. A 2020 report published by TechTarget stated that the infosec space, in general, struggles “to attract diverse talent because they do not know where to find it.”
“In a job market described as being 70% who you know vs. 30% what you know,” the report continued, “expecting diverse talent to simply appear at an organization's doorstep is not enough to address racial and gender disparities.”
The deal also comes at a good time for the Chinese-owned, Culver City-headquartered TikTok, which is currently facing challenges on several fronts.
In the last three months alone, TikTok has faced increasing scrutiny over multiple issues, such as its algorithm allegedly pushing misogynistic content, keylogging user input regardless of whether users submitted what they typed and a threatened multimillion-dollar fine over child data privacy.
So a partnership like this may not only provide new opportunities to underrepresented people—it also ensures positive press for TikTok that will likely pull focus away from the app’s more controversial aspects.
In the end, whether TikTok’s motivations are altruistic in partnering with Cyversity may be beside the point. With the cybersecurity industry facing new threats daily, it can only benefit from new and diverse skill sets, perspectives and brain power.
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EVCS Announced A New Subscription Service To Simplify Vehicle Charging
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.
Hot on the heels of a nearly $70 million Series A, Arcadia-based EV charging company EVCS announced yesterday a new subscription service designed to make vehicle charging simpler than it’s ever been.
While a subscription service may not be the most glamorous development in the EV space at the moment, the model could be a boon to industries like delivery, rideshare as well as high-mileage commuters or anyone else seeking to simplify the calculus of operating a battery-powered vehicle.
EVCS, which stands for Electric Vehicle Charging Stations (again, not the most glamorous acronym), has been around since 2018. But only recently began a rapid expansion of their network that currently operates 670 chargers along the West Coast, including 240 fast chargers. If everything goes according to plan, that network should double by the end of next year with fast charging options growing to 700.
EVCS car plugged in charging image courtesy of EVCS
For low mileage drivers, the company will continue to offer its standard charging plan of $50 per month up to 200 kWh and then $.29 per kilowatt hour after that. For comparison, the Tesla Supercharger network averages around $.25 per kWh.
The new unlimited subscription models come in two flavors. The first is a completely unlimited plan that lets drivers charge as much as they want at any time of day for $200 per month. The second, “Off-Peak” plan, costs $100 per month and lets drivers use the network any time between 10 p.m. to 6 a.m.. The standard $.29 per kilowatt hour is applied to any additional daytime charging.
EVCS recommends their unlimited subscription plans for people driving more than 1,150 miles per month. Before the pandemic, the United States Department of Transportation Federal Highway Administration calculated that the average U.S. driver was driving 1,189 miles per month. In 2020 that number dropped to 1,060 miles but is slowly ticking back up. The proximity of EVCS’s price point to the national average is no accident; subscription models work best when parts of the user base underuse the service. Depending on how efficient your vehicle is, when you tend to charge, and where you live, these price points may or may not make sense., But the more your drive, the more likely the subscription model will make financial sense. If you’re driving 2,000 miles a month, then there are absolutely savings to be had.
But for anyone who drives a lot, the subscription presents an enormous opportunity both to save money and to simplify their finances or business model.
“Kilowatt rates tend to vary by location, they tend to vary by time of day, and there can be hidden fees, so it’s pretty complex,” says EVCS Chief Growth Officer Kirk Johnson. “For your Uber drivers, your Lyft drivers, your package delivery, and really allows them to predictably manage their monthly charging costs.”
While the subscription model might be great for high mileage drivers, it may also cause issues with the grid if it really catches on. There’s a reason that electricity rates vary by time of day, and it’s tied to how abundant that energy is. During the day, when solar and wind power are at their peak, electricity is cheaper and cleaner. Overnight, we demand is lowest, the price falls again, but the electrons tend to come from coal rather than renewables. Demand and price are both highest in the evening, when people are home and the grid is under maximum load while renewables are tapering off. Allowing people to charge their vehicle for the same price at all of these times divorces the consumer cost of electricity from the demand. The result? With a fixed charging cost, grid operators lose some of their ability to incentivize people to charge their vehicles at a time that best aligns with grid performance or carbon cost of electricity.
The actual impact of this shift will depend on how many chargers EVCS ultimately adds to its network and how popular the subscription model becomes.
“We've had that question come up and we've thought a lot about [the question of] whether the grid can keep pace with EV adoption,” he says.
But for now, EVCS is banking on the idea that getting more people into electric vehicles is a good thing for society. Even if charging doesn’t always take place at an optimal time.
“Our main focus is lowering the barriers on adoption–making it as simple as we possibly can,” says Johnson. “The plan is to become one of the leading charging networks on the West Coast.”
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.
LA Venture: Arrowroot Capital’s Kareem El Sawy On Navigating Structured Equity
In this episode of the LA Venture podcast, Arrowroot Capital’s founding General Partner Kareem El Sawy discusses how to navigate structured equity.
Founded in 2014, Arrowroot helps enterprise software companies “that are past the VC stage not quite at [the] buyout stage” that are looking for capital to help them reach profitability. The private equity firm offers bespoke growth capital options, usually cutting checks between $10 million to $40 million. It’s now approaching $700 million in assets under management (AUM), El Sawy said.
Structured equity can assist venture capital-backed companies that have fallen off the venture path for one reason or another.
“The reality is most software companies have burned $300 million, $50 million, $10 million, $70 million—all over the place,” he said. “They're on Series G. They're on Series A. They're on Series C. They're on Series one. It's really never a straightforward path.”
Arrowroot is looking for these under-resourced “Cinderella” companies that El Sawy says exist overlooked in many venture portfolios. Arrowroot sifts through a massive pipeline to identify these companies and then offers them capital that may come with liquidation preferences, dividends, warrants or other governance that gives Arrowroot downside protection to their investment.
“A lot of our growth capital goes towards a one-time transition of some sort,” El Sawy said. “Maybe it's an old product, a new product—maybe it's an invisible transition where the market finally came.”
Unlike many private equity investors, Arrowroot is not a control investor–they often take an ownership stake of around 30% to 35%, El Sawy said. Because their term sheets are not “vanilla” term sheets, El Sawy says that their investments take some time to talk through with management. Arrowroot’s track record and references are useful for teams trying to understand how to think about what are often unique investment terms.
El Sawy says that they are seeing many more deals in their pipeline nowadays as the gap between venture capital and private equity has gotten wider. There are many companies that don’t exactly fit the model for an investment from either group and that is where Arrowroot is able to step in.
“We're the bridge,” he said. “We’re the tour guide through that bridge”.
Prior to joining Arrowroot, El Sawy was in private equity at L.A.-based OpenGate Capital. He joined founder Matthew Safaii in 2014, during Arrowroot’s first few months. Initially, he said the firm focused on providing smaller growth checks, but has grown rapidly. Arrowroot’s portfolio includes mParticle, ParkHub and SocialChorus, and it has guided companies like Evergage to big exits. Overseeing this portfolio has helped the firm gain a reputation for being able to navigate to long-term success, he said.
“We're known at this point as that kind of guide for these companies and saying, ‘Look we've done it before’,” El Sawy said. “‘We've taken it to huge exits. We're gonna do it again for you.’”
Click the link above to hear the full episode, and subscribe to LA Venture on Apple Podcasts, Stitcher, Spotify or wherever you get your podcasts.
This podcast is produced by L.A. Venture. The views and opinions expressed in the show are those of the speakers and do not necessarily reflect those of dot.LA or its newsroom.
dot.LA reporter Kristin Snyder contributed to this post.