The Pandemic Has Changed the Music Industry Forever. Meet the LA Music-Tech Startups Poised to Reshape It.

Sam Blake

Sam primarily covers entertainment and media for dot.LA. Previously he was Marjorie Deane Fellow at The Economist, where he wrote for the business and finance sections of the print edition. He has also worked at the XPRIZE Foundation, U.S. Government Accountability Office, KCRW, and MLB Advanced Media (now Disney Streaming Services). He holds an MBA from UCLA Anderson, an MPP from UCLA Luskin and a BA in History from University of Michigan. Email him at samblake@dot.LA and find him on Twitter @hisamblake

The Pandemic Has Changed the Music Industry Forever. Meet the LA Music-Tech Startups Poised to Reshape It.
Image courtesy of Wave
  • The pandemic has ravaged the music industry, but music-tech companies are poised to drive its growth into an industry where a music company is much more than music.
  • Los Angeles is home to a bustling ecosystem of startups empowering musicians through a variety of next-generation technologies.
  • The Takeaway: Innovations in music-tech offer new tools to independent artists to help them create music, manage money, reach fans and share their music in vivid, immersive ways.

The pandemic has hushed the music industry. Throbbing concert crowds have disappeared, artists' sales have plummeted and musicians' overall income has fallen precipitously. But a handful of Los Angeles-based tech startups are providing musicians with everything from socially-distanced collaborative recording to simplified back-office accounting.

"The L.A. music-tech scene is primed to drive this industry forward," says Ed Buggé, partner at L.A.-based entertainment law firm Hertz Lichtenstein & Young. "It's a hugely exciting time in the industry, with startup-driven disruption enabling new models for artists and media companies alike."

Buggé, who advises some of the world's leading tech and media companies, says the ecosystem of music-tech startups is poised to accelerate two big trends in the music industry.

One is the rise of independent artists. In 2018, indies – artists who own most or all of their material – earned 6.6% of total recorded music revenues. That's a 78% growth rate from 2015, which makes independent artists the fastest growing segment of the recorded music market. Entertainment research firm MIDiA says this change "could prove to be more impactful than even the rise of streaming."

The other trend startups are speeding up is the transformation of what a music company even is.

"Music is no longer just music," says Buggé, adding that audio is becoming inseparable from technologies spanning artificial intelligence, gaming, social media, as well as augmented and virtual reality.

Recording Studios at Home

Musicians today have far more access to high-quality production tools and capabilities than they once did.

Software packages like Logic Pro or Ableton have brought the recording studio's physical equipment and professional engineers right into an artist's living room, saving them thousands of dollars.

"In 2020, all you really need is the essentials – your phone, your laptop, and a good pair of headphones," says Americo Garcia, aka Boombox Cartel. Add in a good $100 microphone or two and an instrument and you've got a home studio.

"Back in the day you'd have to ship reels of tape and jump hoops and loops just to make a song happen. Nowadays you can email someone in Poland and say, 'hey man, let's start something,'" Garcia says. In addition to tools like Dropbox that enable file-sharing across the world, several companies have emerged to help musicians find and work with each other.

"If you think you need a label to blow up, you're wrong," Garcia says.

Meet Your Bandmates

Musicians' Jammcard profiles help them to collaborate

L.A.-based Jammcard has been called the "LinkedIn for musicians." Founded in 2017 by professional drummer Elmo Lovano, the company has nearly 10,000 members and has raised around $2 million from Quincy Jones, Twitch co-founder Kevin Lin and Lionsgate President Robby Melnick.

Lovano formed the company to streamline the process by which professional musicians find each other, rather than relying on word-of-mouth. He estimates that as many as 95% of Jammcard members are independent, and that their median income is around $70,000.

"A lot of the people that are on Jammcard are the people that support the big artists; Kendrick Lamar's not on Jammcard, but his entire band and crew are," Lovano says. "Sound engineers, stage managers, guitar techs – we like to say that it's for 'anyone that's on the bus or in the studio'."

Lovano says Jammcard is finalizing partnerships with Sony and Fender and has recently expanded its platform to enable digital payments to members for collaborating, performing and teaching. Jammcard also recently partnered with New York-based Splice, an online music production service that offers downloadable samples and plugins that make it "a lot more accessible and intuitive to start creating music," says Ankur Patel, Splice's head of corporate development. Jammcard's artists can host their sound samples on Splice and share in the proceeds.

Soundstorming is another L.A. company using tech to enable artistic collaborations. Users upload small segments of their self-produced audio files, allowing other members on the platform to provide feedback and even layer in their own bass grooves, vocal melodies, and drum beats to collectively compose a new track.

Build Your Own Label

Former UTA agent Milana Lewis created Stem Disintermedia in 2015 to "alleviate back office work so an artist can eliminate those costs and release content more easily."

Stem co-founder and CEO Milana Rabkin Lewis

As an agent, Lewis saw how the complexities of music copyright were depriving musicians of opportunities to make money. "The administrative work was too burdensome for any individual artist to do," she told dot.LA. Artists would give up and say, ''I'm just going to put it up for free'" on sites like YouTube and Soundcloud.

Stem has raised over $12 million in funding, including two rounds from L.A. firm Upfront Ventures. The startup also recently launched its own $100 million debt-financing arm to allow artists to borrow money against their existing catalogs.

Stem's interface helps artists and their managers track their finances

Create Music Group, another startup formed in 2015 that helps artists take control of their accounting and distribution, has a similar origin story.

"We realized the YouTube landscape was poorly mismanaged," recalls Sam Casucci, partner and senior vice president of digital strategy at Create, recently named the second-fastest growing company in the country in the annual Inc. 5000 list. Create employs about 120 people and serves over 10,000 clients – mostly indie artists and labels, the company says. "There was a lot of music and (rights holders) who weren't getting paid what they should be," Casucci says. Create has since built technology on top of YouTube's rights-management platform to help artists make money.

Create Music Group's Hollywood office

Independent artist and Create client Ray J told dot.LA, "They help you study everything that's going on and help you find money you might not have even known existed."

"When you sign to a major label you don't really get to see what's going on behind the scenes," says Ray J. "You can become your own record label now."

Create's dashboard to help musicians manage their copy rights

Get Paid

Elsewhere in L.A., Pex helps artists manage their monetization by following the data associated with their songs across the web. Wilson Hays, head of business development, says Pex monitors over 20 billion songs and videos on dozens of social media platforms.

The company indexes all that data – which comprises over three-times as much content as what's on YouTube, Hays says – and uses patented technology to allow the people behind the music to track and measure its online activity. It even allows artists to easily issue take-down notices if they wish.

Pex's song-tracking dashboard

"YouTube has Content ID and Facebook has Rights Manager, but outside those platforms, in the wild, you don't know how your content is being shared, moved, monetized, or pirated," Hays says. "We want to put control back in rights holders' hands."

That sort of control offers benefits to artists that they wouldn't necessarily have with a traditional label deal. One benefit is that payments come in faster. It also gives artists more freedom to manage their career trajectory.

And that freedom gives artists the choice in how they use the many emerging mediums by which they can share their music.

Reach an Audience

An artist who wants to interact directly with fans can post their songs on a host website like YouTube, TikTok, Soundcloud or Bandcamp and chat with their audiences on social media channels. But these platforms have limitations.

A post on Instagram, for example, carries no guarantee that it will reach an artist's fans; most followers do not see every post. Artists must also contend with the fact that the interests of social media platforms are not always aligned with their own.

Jake Udell, a music manager and entrepreneur with a reputation for digital wizardry, recognized social media's limitations early on.

"The thing I kept noticing was that the algorithms were making it really challenging for us to reach our audiences," Udell told dot.LA. "I didn't think there was a fix, though. We'd given up and sort of ceded our audiences to these social platforms."

Then he conducted an experiment. Tickets went on sale for an artist of his who had about twice as many fans in L.A. than New York. Not surprisingly, about twice as many purchases came in for the L.A. shows than the New York ones. Udell then decided to collect around 1,000 phone numbers from fans at a New York show.

"We found some random texting service online and just blasted them out," he recalls. "What happened next changed the way I thought about building audiences online forever."

7,000 tickets to two New York shows immediately sold out. Udell wrote about it on his blog, which is how he met Matthew Pelltier, chief executive of L.A.-based Community.com, where Udell is now head of activation.

"The algorithm has not really been an enabler" for musicians, Udell says. "What if we could just meet the fans where they're already at?"

That's exactly what Community does, he says, by providing artists (and other "Leaders") a SaaS platform for exchanging text messages with fans en masse.

"I think about it like this," Udell says. "How many social platforms have you joined over the last 10 years? Versus how many times did your phone number change?...The phone number is a true atomic unit of identity; it's not going anywhere."

What's more, Udell says 98% of text messages get opened in the first three minutes.

"On other platforms there's a guarantee of instant publishing, but there's no guarantee of instant distribution," he says. Whereas with Community, "the idea that you will always be able to reach your fans, this community, via text, is a really empowering thing not just for you personally but for your business."

Big-timers like Jennifer Lopez use Community, as do aspiring local band types. Prices depend on audience size. One feature: ability to segment fan outreach so that, for instance, a band coming to a specific town can message only the locals – "See you at the show tonight?"

Tour Virtually

Wave turns performers into digital avatars and puts them on virtual stages where they can entertain and interact with fans, who tune in via VR headset, gaming console or web browser.

"We started the company four years ago to help musicians make money," Wave chief executive Adam Arrigo told dot.LA. "We've been touring musicians and we know how hard it is."

Wave has now hosted over 50 events. Its recent concert featuring The Weeknd in partnership with TikTok reportedly drew a digital audience of over 2 million fans.

A Wave concert of Swedish band Galantis

Arrigo says his former role as a designer for the Rock Band video game franchise showed him how novel technologies can empower musicians.

"From working on that game I learned that when you create new experiences you can create additional revenue streams for the industry," he says.

Building on a blueprint established in part by L.A.-based Brud (whose digital influencer and singer Lil' Miquela currently has 2.6 million Instagram followers and attracts millions of views on YouTube), Strangeloop Studios is currently designing a cast of animated characters of its own.

Co-founder and chief executive Ian Simon, who is also on the creative team at Wave, says, "the long-term vision is to be a studio; to bring in storytellers and visual artists and creators to tell stories using these characters. The characters are a medium in themselves."

A character from Strangeloop Studios' virtual artist label, Spirit BombStrangeloop Studios

Those characters present musicians with scalable creative opportunities. "You can play the same show with the same character in multiple places at the same time," Simon says. "They're vessels for human collaboration – multiple musicians contributing songs, various visual artists creating content and fans informing the narrative and aesthetic trajectory of the characters."

"People are already listening to music on screens, even if the screen isn't really being leveraged," says Simon, whose small team includes former visual designers for megastars like Kendrick Lamar and Flying Lotus.

Immersive Music

ViRvii – a portmanteau of virtual, visual, and immersive – gives artists a new "paintbrush" for creating immersive fan experiences, says founder Juan Dueñas, who formerly founded My Mixtapez and was an early user of Oculus' development kit.

Dueñas says ViRvii will allow fans to "hang out" inside The Beatles' Yellow Submarine while the album plays in the background, for instance. Contemporary artists will be able to design VR experiences to accompany their releases. Despite the high-tech approach, Dueñas says he wants users to be able to get a homespun feeling of "sitting around a stereo or record player and smoking a joint and drinking a beer with friends and listening to your favorite album."

ViRvii's continuous VR world will immerse fans into albums

Formed in 2019 and now with a staff of 30, the L.A.-based startup recently announced a partnership with Facebook and its Oculus VR subsidiary.

Splashmob gives performers control of their audience's cell phone screens. They can preprogram the screens of anyone who opts in with features like polls, audiovisual media to accompany the main show, and merchandise sales portals. The screens can also be controlled in real-time, not unlike an effects technician manipulating phone screens rather than lights and sound.

Founder Blaise Thomas was formerly a sound engineer in London, where his work in recording studios and live performances got him thinking about how to enhance concerts, whether in-person or streamed.

Splashmob's control panel gives performers the power to curate audience members' phone screens

"The flashlight on the phone is all well and good," Thomas says, "but how far can that go?"

Splashmob has collaborated with Dani Van de Sande and her L.A. startup, ULO, which along with Splashmob and Strangeloop was part of the 2020 Techstars Music cohort.

"Imagine you're wandering around Melrose Avenue on your way to dinner," Van de Sande writes, "and out of the corner of your eye you spot a bright, iridescent light. It looks otherworldly, like something from another universe."

These cocoon-like walk-in installations, called ULOs ("unidentified landing objects"), offer immersive, interactive experiences for the adventurous souls who enter. ULO plans to dot them around city-scapes.

"We're another avenue where artists can do something beyond releasing a video – by creating an experience for people," says Van de Sande, who formerly worked on augmented reality at L.A.-based Snap.

The Pandemic Has Changed the Music Industry Forever. Meet the LA Music-Tech Startups Poised to Reshape It. StillVika

These new visually oriented channels for sharing music may help to shrink the gap between the ear and the eye that Spotify founder Daniel Ek often invokes when he describes the growth potential for his company. Why, he has publicly wondered, is the total video market worth around 10-times more than audio, even though consumers spend about equal time with each?

Get a Side Gig

Cameo offers anybody with over 20,000 Instagram followers the opportunity to build a profile on its platform and set a price for which they will record a personalized video message. The company was formed in Chicago, but its chief executive Steven Galanis recently moved to L.A. With his move, Cameo's center of gravity has shifted.

"L.A. is the best place for me to be for Cameo right now," Galanis recently told dot.LA. "I've been focused on being the tech company to work for in Chicago and I think that's mission accomplished in many ways. Now my objective is to make Cameo that place in L.A."

L.A. was once the destination for artists with a guitar case and a dream. Now, many of them can pursue those dreams from home. Music-tech companies, however, are flocking in.

"It's not an accident that Techstars Music is in L.A.," says Bob Moczydlowsky, who runs the accelerator, which recently opened its 2021 cohort application, with an emphasis on attracting a diverse candidate pool. Moczydlowsky attributes L.A.'s centrality in this flourishing wave of music and tech innovation to two main factors. First is the access to an ecosystem of artists, managers, labels and touring companies. Second is the venture money in Silicon Valley.

"L.A. is less than an hour from the money and down the street from the culture," he says.

The growing entrepreneurial energy in L.A. looks set to provide Angelenos a front-row seat to a new, lasting stage for entertainment technology innovation.

---

Sam Blake primarily covers entertainment and media for dot.LA. Follow him on Twitter @hisamblake and email him at samblake@dot.LA

From Your Site Articles
Related Articles Around the Web
https://twitter.com/hisamblake
samblake@dot.la
An LA AI Company Just Won Entertainment’s Backing

🔦 Spotlight

Hello LA.

The entertainment industry has spent the past several years debating what generative AI could take from creators.

This week, some of its biggest companies put money behind an AI startup promising to build something for them instead.

Los Angeles-based Stability AI raised $76M in Series B funding from an investor group that includes Electronic Arts, Sony Music Group, Universal Music Group and Warner Music Group. AMD Ventures and Pacific Alliance Ventures also joined the round, while LA-based MANTIS Capital and Sound Ventures are among the company’s existing backers.

The financing brings Stability AI’s total funding under CEO Prem Akkaraju to $232M, including two equity rounds and convertible notes. The company plans to use the new capital to expand its creative production tools, applied research and professional services across music, gaming and entertainment.

The amount is notable. The names attached to it are the bigger story.

Generative AI’s arrival in entertainment has been anything but quiet. Artists have questioned whether their work was used to train models without permission. Studios have faced pressure over how the technology could affect jobs. Record labels have pursued AI companies in court while simultaneously exploring how the same technology might fit into their businesses.

Now, several of the world’s largest entertainment companies are investing directly in one.

That does not mean the industry has resolved its concerns about AI. It means some of its biggest players would rather help shape the technology than wait to see what it becomes.

Stability AI is positioning itself for that opening. Rather than focusing solely on general-purpose models, the company is building tools specifically for professional creatives. Its recently launched Stable Audio 3.0 was trained on fully licensed music and lets artists generate, edit and arrange audio through a web platform or directly inside digital audio workstations.

Image Source: Stability AI

That licensed-data approach is central to the pitch. The next phase of creative AI will not be decided only by which company produces the most impressive model. It will also depend on which companies can earn the trust of the artists, studios and rights holders whose work gives those models value.

For its new strategic investors, the round offers more than financial upside. It creates a closer view into how generative AI may change production, a voice in how the tools develop and an opportunity to establish rules before those rules are established for them.

For Stability AI, the backing provides something equally important: credibility inside industries that have every reason to scrutinize what it is building.

The company now has capital and access to some of the largest catalogs, franchises and creative workforces in entertainment. What it does with that access will determine whether this becomes a meaningful alliance or simply an impressive collection of logos.

Either way, the industry is no longer watching from a safe distance.

It has entered the room.

LA’s Air-Taxi Plans Are Coming Downtown

While Stability AI is trying to change how entertainment gets made, Archer Aviation wants to change how people get to it.

AEG and Archer announced plans to develop downtown Los Angeles’ first vertiport at L.A. LIVE, creating a potential new stop in Archer’s proposed electric air-taxi network ahead of the 2028 Olympic and Paralympic Games.

Image Source: Archer

The planned site would sit beside Crypto.com Arena and allow passengers to travel to and from the entertainment district aboard Archer’s Midnight aircraft. The company says its network could turn drives that take an hour or longer into electric flights lasting approximately 10 to 20 minutes.

Archer has already identified SoFi Stadium, USC and Hollywood Burbank Airport as possible locations, with its recently acquired Hawthorne Airport expected to serve as the network’s central operating hub. As the official air-taxi provider of LA28 and Team USA, Archer has an unusually visible deadline for turning those plans into something tangible.

AEG and Archer have completed an initial feasibility study of the L.A. LIVE site, including reviews of land use, airspace, power availability and community impact. The next phase will examine operations and the passenger experience.

There is still a substantial distance between a proposed vertiport and a functioning air-taxi network. The infrastructure must be built, regulatory approvals must be secured and passengers must be persuaded that flying across the city is safer and more practical than staying on the ground.

Still, few locations could make that future feel more real than L.A. LIVE. Millions of people already pass through the district for concerts, games and major events. Placing a vertiport there would bring urban air mobility out of the concept stage and directly into public view.

Together, this week’s announcements show Los Angeles becoming a testing ground for two technologies still moving from promise toward everyday use.

One could reshape how entertainment is created. The other could reshape how Angelenos reach it.

In a city famous for both its creative industries and its traffic, that feels appropriately on brand.

More from this week’s LA startup and venture scene below.

🤝 Venture Deals

    LA Companies

    • Atorie raised a $9.5M seed round from investors including a16z speedrun, Night Capital and Lightspeed Venture Partners’ Jeremy Liew. The AI-powered fashion startup connects consumers directly with luxury manufacturers to offer high-quality goods without traditional designer markups, and will use the funding to expand logistics, production and its AI shopping tools. - learn more
    • Long Beach-based Maglut Heavy Industries emerged from stealth with $3.1M in pre-seed funding from Wave Function, Nova Threshold and Julian Capital. The startup is developing a chromatography-based system to process and refine rare earth elements domestically, with pilot tests producing materials at more than 99.9% purity. - learn more

    LA Venture Funds
    • MANTIS Venture Capital participated in Voya Energy’s $35M Series A, led by Energy Impact Partners and joined by John Doerr, StepStone, Founders Fund, Overmatch and Seven Stars. The Hayward-based startup will use the funding to commercialize its aluminum-fueled generators, which provide clean, off-grid power for data centers and other energy-intensive operations without combustion or local air emissions. - learn more
    • Regeneration.VC participated in eComID’s $17M seed round, led by Systemiq Capital and joined by Course Corrected, Stadium and returning investor CapitalT. The Stockholm-based startup will use the funding to expand internationally and scale its AI-powered Shopping Passport, which helps retailers personalize sizing and product discovery while reducing returns. - learn more
    • Clocktower Technology Ventures participated in Helcim’s $53M Series C, led by BDC Capital’s Growth Venture Fund and joined by new investors Curql Collective and LA-based Gold House Ventures. The Calgary payments company will use the funding to expand its platform, develop additional financial services and serve more small and midsize businesses across North America. - learn more

    LA Exits

    • Altruist agreed to be acquired by Vanguard, giving the Los Angeles-based wealth technology and custody platform greater resources to expand its tools for independent financial advisors. Altruist will continue operating as a standalone business under its existing leadership and brand after the deal closes, which is expected later this year pending regulatory approval; financial terms were not disclosed. - learn more
    • Personality AI has been acquired by WildBrain for approximately $11M in cash and 1M WildBrain shares upfront, with additional payments tied to future performance. The startup develops kid-safe conversational AI experiences for entertainment characters, including “Hey Peppa Pig,” and will help WildBrain expand its franchises into interactive products across toys, apps and digital platforms. - learn more

      Download the dot.LA App

      This Torrance Startup Just Raised $1B to Mass-Produce Hypersonic Missiles

      🔦 Spotlight

      Happy Friday, Los Angeles.

      Castelion has spent the past four years trying to prove that hypersonic missiles do not need to take decades to develop or cost so much that the military can only afford a limited supply.

      Now comes the harder part: producing them at scale.

      The Torrance-based defense startup raised a $1B Series C at a $13B valuation. The financing includes $800M in equity and a $250M revolving credit facility, making it one of the largest recent raises for an LA defense technology company.

      JPMorganChase’s Strategic Investment Group, Andreessen Horowitz and Carlyle co-led the round. Lightspeed Venture Partners, Lavrock Ventures, Altimeter, General Catalyst, T. Rowe Price and LA-based Interlagos Capital also participated.

      Castelion will use the capital to ramp production of Blackbeard, its low-cost hypersonic strike missile, while developing a longer-range precision weapon and new defensive systems. Hundreds of millions of dollars will go toward expanding manufacturing at Project Ranger, the company’s 1,000-acre production campus in New Mexico.

      Image Source: Castelion

      Blackbeard was designed in California, will be built in New Mexico and is expected to enter service in 2027. Castelion says it has already secured more than $500M in U.S. military contracts over the past 18 months and moved the missile from a clean-sheet concept to an official program in fewer than four years.

      That timeline is central to Castelion’s pitch. Traditional defense programs are often associated with long development cycles, limited production runs and eye-watering costs. Castelion is applying the rapid testing and vertically integrated manufacturing approach popularized by commercial space companies to weapons production.

      But a $13B valuation changes the standard. Castelion is no longer being judged as a promising startup with an impressive prototype. It is being funded like a company expected to become a major part of the American defense industrial base.

      The question is no longer whether a startup can build a hypersonic missile. It is whether one can manufacture thousands of them without losing the speed, discipline and cost advantages that made it disruptive in the first place.

      For LA’s defense ecosystem, that shift matters. The region has become home to a growing number of companies promising to modernize how America builds critical hardware. Castelion now has the capital, contracts and facilities to show what happens when that promise reaches the factory floor.

      The next test will not be in a pitch deck. It will be in production.

      More from this week’s LA startup and venture scene below.

      🤝 Venture Deals

        LA Companies

        • Long Beach based Ampaire raised a $19M Series B led by DiamondStream Partners, with strategic participation from Alaska Star Ventures and IAGi Ventures, bringing its total funding to $68M. The hybrid-electric aviation company will use the capital to expand flight operations, produce additional Eco Caravan aircraft, advance regulatory certification and scale its manufacturing capabilities. - learn more

        LA Venture Funds
        • SUM Ventures participated in AssistMe’s €6.5M funding round, which was led by CRB Health Tech and Vorwerk Ventures and included several returning investors. The German care technology company will use the capital to expand across Europe, prepare for a U.S. launch and further develop alea, its digital platform for supporting caregivers and improving nursing-home operations. - learn more
        • CIV led Hypercubic’s $5.3M seed round, with participation from Y Combinator, Afore Capital, Pioneer Fund, Multimodal Ventures and several angel investors. The San Francisco startup will use the capital to develop AI agents that can analyze, document and rewrite decades-old COBOL systems, helping enterprises modernize critical mainframe software faster and with less risk. - learn more
        • Plus Capital participated in Wispr Flow’s $280M Series B, led by Menlo Ventures and joined by existing and new investors, valuing the AI voice company at $2B. The funding brings Wispr’s total capital raised to $361M and will support its expansion beyond dictation into meeting tools and proprietary speech technology, including its new Canto model. - learn more
        • Alexandria Venture Investments participated in Leal Therapeutics’ $30M Series A extension alongside new investor Eli Lilly and returning backers including OrbiMed, Newpath Partners and SV Health Investors’ Dementia Discovery Fund. The biotech company will use the funding to advance clinical trials of LTX-001 for schizophrenia and LTX-002 for ALS, with initial schizophrenia trial data expected by year-end. - learn more
        • BroadLight Capital participated in Higgsfield’s $400M Series B, led by DST Global and joined by investors including Goldman Sachs Alternatives, Smash Capital, Fifth Wall and Intel Capital. The AI video and image platform, now valued at $5.4B with $700M in annualized revenue, will use the funding for R&D, global infrastructure, AI hiring and international expansion. - learn more

          Download the dot.LA App

          Why Samsonite Just Paid $178.5M for BÉIS

          🔦 Spotlight

          Hello, Hello.

          This week, one of LA’s most recognizable consumer brands packed its biggest bag yet.

          Samsonite Group has agreed to acquire an 85% stake in BÉIS for $178.5M, valuing the Los Angeles-based travel and lifestyle brand at approximately $210M. The deal is expected to close in Q4, pending regulatory approval.

          Founded by actress and entrepreneur Shay Mitchell and incubated by LA-based Beach House Group in 2018, BÉIS has grown from a digitally native luggage startup into a profitable business that generated approximately $210M in sales last year. Along the way, it built the kind of fiercely loyal online following that legacy brands spend years and considerable marketing budgets trying to manufacture.

          Image Source: BÉIS

          That may be the most interesting part of this deal. Samsonite is not simply acquiring another luggage line. It is buying access to a younger, predominantly female customer base, a sophisticated direct-to-consumer operation and a brand that knows how to turn social media attention into actual sales. The suitcases are useful; the cultural relevance is the real carry-on.

          BÉIS will continue operating as a standalone brand under CEO Adeela Hussain Johnson and its existing management team. Mitchell will retain a 15% ownership stake and continue guiding the company’s creative and product vision, while Samsonite brings the global distribution, sourcing and logistics infrastructure needed to take the brand further.

          For LA’s startup community, the acquisition is another reminder that valuable technology companies do not always look like software companies. BÉIS built its advantage through digital distribution, community and an unusually sharp understanding of its customer. Now, one of the world’s largest luggage companies wants what it created.

          Sometimes the strongest exit starts with knowing exactly what people want to pack.

          More from this week’s LA startup and venture scene below.

          🤝 Venture Deals

            LA Companies

            • Heaviside Industries raised a $60M Series B to accelerate the development and production of its autonomous precision munitions for U.S. and allied forces. The company also announced a strategic partnership with defense manufacturer Nammo, combining Heaviside’s autonomous weapons technology with Nammo’s expertise in propulsion, warheads and large-scale munitions production. - learn more
            • Alex Cooper and Matt Kaplan’s media company Unwell received its first outside investment from WTSL, giving the profitable business a $500M pre-money valuation. Unwell, which reaches a reported 70M women each month through podcasts, film and television, live events, consumer products and a creative agency, will use the capital to pursue acquisitions, make investments and expand into new business lines. - learn more
            • Neros raised a $250M Series C at a $2.5B valuation, with participation from LA-based Interlagos, MANTIS Venture Capital and Thiel Capital. The El Segundo defense startup will use the funding to scale its autonomous strike and interceptor drone programs, expand production and strengthen its domestic supply chain as demand grows from the U.S. military and allied forces. - learn more
            • FriskAI raised $3.6M from MaC Venture Capital to expand its observability and security platform for AI agents. The startup helps companies monitor what autonomous agents do in real time, giving teams greater visibility into agent behavior and helping them identify errors, risks and unexpected actions. - learn more
            • Diald raised $1M in follow-on funding led by Feedback Ventures, bringing its total funding to $4.75M. The company also launched a rebuilt conversational AI platform that lets commercial real estate investors create pro formas and evaluate zoning, permits, neighborhood sentiment and other property risks through plain-language prompts. - learn more

            LA Venture Funds
            • Alexandria Venture Investments participated in Khartis Therapeutics’ $50M Series B, led by Forge Life Science Partners, bringing the San Diego biotech’s total funding to $95M. Khartis will use the capital to advance its lead oral treatment for thyroid eye disease and expand its pipeline of small-molecule immunology drugs. - learn more
            • Finality Capital Partners co-led Entravel Group’s $7.5M funding round alongside Ethereal Ventures, with participation from GSR, Varrock, G1 Ventures, Seier Capital, Veris Ventures, Funfair Ventures and WTG Ventures. The traveltech company will use the capital to expand its white-label hotel-booking infrastructure beyond crypto platforms and develop a stablecoin-powered system for settlement, treasury and working-capital financing. - learn more
            • Regeneration.VC participated in Clarity Systems’ $4.4M seed round, led by LMnT Ventures and joined by Humba Ventures and Massive Technology Ventures. Clarity uses X-ray imaging, computer vision and AI to detect counterfeits, product swaps and other forms of returns fraud in seconds without opening the package. - learn more
            • CIV participated in AGent Energy’s $11M Series Seed round alongside existing investor Zero Infinity Partners, with Spero Ventures and MassMutual Ventures co-leading and Intrepid Investment Management also joining. The Houston startup uses AI-powered hardware and software to turn largely idle backup generators into on-demand grid capacity during emergencies, and the new funding brings its total raised to $17M. - learn more
            • Smash Capital co-led CodeRabbit’s $143M Series C alongside Atomico, valuing the AI code-review company at $1.5B. CodeRabbit will use the funding to expand internationally and develop its new Agentic Change Management platform, which helps companies review, govern and monitor software created by both humans and AI agents. - learn more
            • Multiball Capital backed Soctera’s $4M seed round alongside Anorak Ventures, with additional participation from 9Yards Capital, Mana Ventures and Red Bear Ventures. The Cornell spinout will use the funding to develop heat-efficient power amplifiers designed to improve the range, signal quality and reliability of radar, electronic warfare, satellite and telecommunications systems. - learn more
            • WndrCo participated in Genera’s $10M seed round, which was led by First Round Capital and also included BoxGroup, Carpenter Capital and Success Venture Partners. Genera will use the funding to scale its AI platform, which automates the often labor-intensive process of deploying enterprise software, including customer discovery, data migration and system configuration. - learn more
            • M13 co-led Baselayer’s $20M Series A alongside Koro Capital, bringing the fintech startup’s total funding to approximately $47M. Baselayer will use the capital to enhance its AI-powered platform, which helps banks, fintech companies and government agencies automate business verification, risk assessment and fraud monitoring. - learn more

              Download the dot.LA App

              RELATEDEDITOR'S PICKS
              Trending