Nasdaq’s Adena Friedman on the Power of Going Public

Spencer Rascoff

Spencer Rascoff serves as executive chairman of dot.LA. He is an entrepreneur and company leader who co-founded Zillow, Hotwire, dot.LA, Pacaso and Supernova, and who served as Zillow's CEO for a decade. During Spencer's time as CEO, Zillow won dozens of "best places to work" awards as it grew to over 4,500 employees, $3 billion in revenue, and $10 billion in market capitalization. Prior to Zillow, Spencer co-founded and was VP Corporate Development of Hotwire, which was sold to Expedia for $685 million in 2003. Through his startup studio and venture capital firm, 75 & Sunny, Spencer is an active angel investor in over 100 companies and is incubating several more.

Nasdaq’s Adena Friedman on the Power of Going Public

Adena Friedman is president and chief executive officer of Nasdaq, which operates the second-largest stock exchange in the world by market cap. Named one of Forbes' most powerful women, Adena built her career at Nasdaq, starting as an intern straight out of an MBA program. Outside of a three-year stint as chief financial officer at The Carlyle Group, she's been with Nasdaq ever since. In this episode, Spencer joins Adena in New York City to discuss the power of mentorship, the future of the U.S. capital markets and why going public can spark innovation.


Press Play to hear the full conversation or check out the transcript below. You can also subscribe to Office Hours on Apple Podcasts and PodcastOne.

Spencer Rascoff: I'm in Times Square today at the Nasdaq market site with Adena Friedman, CEO of Nasdaq. Hi, Adena. How are you?

Adena Friedman: Fine, how are you?

Rascoff: Great. Firstly, a lot of listeners might not fully understand the size and scope of Nasdaq. So, explain to people, what is Nasdaq?

Friedman: Sure. Well, Nasdaq today is a global technology company that serves the capital markets, and we serve our capital markets by operating exchanges ourselves in the U.S. and the Nordics, but we also provide the technology that powers over 90 other exchanges around the world.

And then we take all of the data and analytics that are generated off of our exchanges as well as other information that we gather, and we provide a lot of insights and analytics to all of the customers in the capital markets, whether they're corporate clients or investment management clients or, obviously, the broker-dealer clients. We feel just so fortunate to be in the center of the capital markets globally today.

Rascoff: And the revenue model is one where issuers — so, companies that trade on these exchanges — pay, or people that buy and sell the stocks pay?

Friedman: Right. So, we basically have — we generate revenue in lots of different ways, but one of the sources of revenue is the listing fee. So, companies who choose to list on Nasdaq pay an annual fee to Nasdaq. We then generate trading revenue not only in our equities business from the trading of those stocks, but also in our options and futures businesses here and in the Nordics.
And then we also generate a lot of information coming off the trading engines, and that information we then sell to give people transparency into what's happening in the markets. That also is a revenue stream.
We then have our index data. We create a NASDAQ 100. We have $150 billion of assets under management tied to our indexes, and that's a revenue generator. And then we provide software and services to corporate clients as well as to other exchanges around the world and broker-dealers, and so that's a technology product base that we have revenue off of as well.

Rascoff: A much more diverse revenue stream than most people realize. So, let's talk a little bit about your career. You started as an intern at Nasdaq.

Friedman: I did.

Rascoff: When was that, if you can tell us?

Friedman: Sure. I came right out of business school, and I did an internship at Nasdaq in 1993 over the summer. At the end of the year, I took a permanent position. And so it was very, very fortunate that I had a chance to be here at the start.

Rascoff: And what was your career path like during that, I guess, two-decade stint? And we'll cover when you left and then returned in a moment.

Friedman: Sure. Well, Nasdaq at the time was a subsidiary of an organization called the National Association of Securities Dealers, which is now FINRA. And so it really was really early in its existence. It had been around for 22 years, but it was still growing up as a marketplace.
And so I really had an opportunity to come in early and be part of the trading operation and the trading organization and help them look at the trading products that they were offering out to broker-dealers to make sure that they were, in fact, optimizing them for their business.
Since NASD was a nonprofit organization and Nasdaq was a for-profit subsidiary, it was an interesting balance in terms of what they were there to do and yet realizing that they actually had these great products that they could optimize from a revenue perspective.
So, I got a chance to write business plans and then become a product manager for some of these products before I then took on the data business.

Rascoff: And we talk a lot at Zillow Group about career development and career pathing. Sheryl Sandberg in “Lean In" — on this podcast she talks, of course, about how career development is more like a jungle gym than a career ladder.
What was your path like during that time? Was it a straight-and-narrow, up-and-down ascent, or did you have detours that took you into different areas around Nasdaq? Describe what that was like.

Friedman: Sure. Well, I would say that it was a jungle gym within the groups that I was in. There was no set career path for me. There was nothing in Nasdaq that had job families. It was very much still a very, what I call, “organic organization" in terms of looking at how to develop your career.
So, I just got very fortunate because when I — every two years early in my career, I just found a new opportunity that would take me up a rung. Or in one case it was sideways, but honestly it then propelled me forward from there.
And I had a few times when I had to look around, and I said, “Wow, should I go and really focus in on marketing, or should I go take this product management job?"
And I had great mentors and sponsors within Nasdaq that really said, “Adena, you are someone who really likes to run a business. You should become a product manager. The marketing job is interesting, but it's not really — it doesn't play to your strengths as well as this other thing." So, I was able to move up through the organization but really with a lot of sponsorship.

Rascoff: One of those sponsors that you talk about is Bob Greifeld, who was the CEO, who recently retired from Nasdaq. What was that relationship like? How should somebody seek out a mentor or a sponsor and get the most out of that relationship?

Friedman: Sure. Well, I do think my personal opinion is that both sponsorship and mentorship — it very much has to be a natural activity. You can't force a sponsor or force a mentor on someone. I think that you, though, have to curate and develop that relationship.
When it comes to mentoring, I think it's an easier thing to curate where you start very casually, and you say, “Well, gosh, I really admire this person," whether that's a person inside the organization or outside the organization. If you ask them to have coffee with you one day, and you give them enough notice, most of the time they're gonna say yes.
Then once you have that coffee or have a meal, and you realize you have a good connection with that person, and they're giving you good advice, and they feel good about the advice they're giving you, they're likely to do it again. And if they do it again, then you have established yourself with someone who you can rely on to help you.
When it comes to sponsorship, most of the time those are people who are in a position of power to guide your career, and they can either be a positive or a negative sponsor. In my case, I was very fortunate. I actually had three sponsors in my career, and I think that all of them were really helpful in not only just putting me in the room and giving me the opportunity, but also guiding me, like that decision around product management versus marketing.

Rascoff: Is that something that Nasdaq in particular focuses on creating and cultivating a culture of or that sponsorship and mentorship is something that you created and owned on your own?

Friedman: It definitely was on me, and frankly, at the time you don't even realize you're getting sponsorship, right? So, with mentors, I do feel like you are realizing that you're going in and touching other people and asking them for their advice. But with sponsorship, you're just — it's so natural that you realize, “Wow, that person just really helped me out." So, it was much more organic than it was planned.
I think Nasdaq has definitely developed its mentorship program, but to me sponsorship really needs to become — it needs to be a naturally developed thing. It's somewhat the responsibility of the employee and of the manager.

Rascoff: So, after many years at Nasdaq , you left to go become CFO of Carlyle Group, a private equity firm, when it was still private with the intention of going public. Why did you leave, and what was that experience like at Carlyle for the, I think it was, three years that you were there?

Friedman: Right. So, I was the CFO at Nasdaq and actually was having a great time and loving my job, and I got a cold call, which I never take cold calls from recruiters. But in this particular case, he got my attention because he did say it was Carlyle. And at the time I —

Rascoff: So, a note to recruiters, by the way, 'cause I get a lot of calls from recruiters too. It's usually super anonymous and vague. It's like, “It's a leading industrial company. I can't tell you who it is." So, maybe recruiters should be a little bit more transparent to get the return call.

Friedman: Exactly. And it was funny because my family lives in Washington, D.C., and I had been commuting to New York for many, many years. I had gotten very used to it. So, it was very much part of our lives. But at the same time, Carlyle is the really premier financial institution in Washington, D.C. It's an organization that I knew well. I knew some of the people there. I had a huge admiration for the company.
And so, he really had no idea that I lived in D.C., but when he called, I said, “Well, do you realize that I live in Washington, D.C.?"
And he said, “Wow, that's fortunate." So he laid out the opportunity, and really, the opportunity to be the CFO of a leading financial institution like Carlyle, to help them go through the process of becoming a public company and really thriving as a public company, was incredibly compelling.
At the time, I'd been at Nasdaq for 17 years, and I felt that if I was going to try something different, this was the one opportunity that presented itself that seemed like the right one to take. So I left and went to Carlyle for three years, and I had a great experience there.

Rascoff: Now when you told your colleagues at Nasdaq— I guess, was Bob the CEO?

Friedman: He was, yeah.

Rascoff: When you told them that you were leaving to go to Carlyle, what was their reaction like?

Friedman: Bob was incredible, actually. He and I have always had a very close partnership. He has been a great sponsor to me, and he recognized at that time with the situation with the age of the kids and the opportunity that was in front of me — it just seemed like it was the right thing to do.
And so, he was very supportive. Really supportive. And he could have chosen not to be. But he really was supportive and said, “That's the right thing for you to do, Adena. Go for it."

Rascoff: And I'm sure the class that Nasdaq handled the situation with factored into your decision to return several years later.

Friedman: Of course, of course. My personal belief is that — I call them boomerang employees. I think boomerang employees can be great, great employees because there are a few reasons for that. One is they go and they experience another part of the industry, and they learn a lot.
The second is that is that they then become a client, and you then get to maintain that relationship with them as a client. And the third thing is that when they do come back, they realize what they missed.

Rascoff: Right.

Friedman: And we do have a fair number of boomerang employees because they realize what a great environment Nasdaq is and what a special place that Nasdaq has in the financial industry, and they become even more loyal to the company when they get back.
But at the time I left Nasdaq, I had no expectation of ever coming back. When I make a decision, you say, “Well, gosh, what do I want to be for the next 15 years," and thinking about the opportunities at Carlyle were really, really exciting to me. So, I left with the intention of spending at least the next 10 to 15 years there.

Rascoff: On the topic of boomerang employees, there's a company that I did a summer internship at when I was in college called Bloomberg — that you know well — that famously does not allow boomerang employees. When you leave Bloomberg, you cannot return — with one exception, which was they let Mike Bloomberg come back. But his name is on the door, and he had left to become mayor.

Friedman: And perhaps he had a lot of equity ownership in the company.

Rascoff: So, they let Mike back, but other than Mayor Bloomberg, they don't let employees return. It's the only company I'm aware of that has a policy like that. But they actually think that's very important to their culture. It seems that you disagree. I also disagree. We welcome back boomerang employees.
But it's something that I've spent a lot of time thinking about because on the way out the door, it does — it certainly gives somebody much greater pause. A tech company like ours, we have people leave not infrequently to go try a startup, and sometimes their attitude is, “Well, if the startup fails, in a year I can always come back." As a manager, that's very difficult for me to let that person leave.

Friedman: Well, and my view on that one is it's totally up to you as to whether you let them come back. They have to make a determination that they're leaving with the intention of not coming back because if they assume they can come back, that may not be an opportunity. First of all, the company may have moved on. Second of all, they may have found someone better, frankly, to replace you. And third of all, you have to be coming back for the right reasons. You can't be coming back as a default.
That's up to the manager to understand what is driving that employee to come back to Nasdaq. Is it because, “Oh, well, they failed at the other thing, so they might as well come back"? Or is it, “Wow, I really miss Nasdaq, and I really can't wait to be one of your best employees ever"? Right? And so, I think it's up to the manager to make that determination, but you certainly shouldn't assume that you have that opportunity.

Rascoff: Right. So, when you decided to leave Carlyle and return to Nasdaq, what went through your mind at that point? Why did you make that decision?

Friedman: Well, so, a few things. The first thing was that I had been a CFO for five years at that point, and while I really enjoyed the role and I really enjoyed learning how to be the lead risk manager in the company as well as to build out the operations — the finance operations for Carlyle and before that for Nasdaq— I really missed the customers.
I had been running a business up until the point I became the CFO of Nasdaq, and I really missed the pressure and the fun of running a P&L and having that client interaction and being able to drive a company forward or drive a business forward.
And so, when Bob came back and said, “Well, why don't you come back as our president, and you can run these certain businesses," it was an incredibly exciting opportunity for me to get back into that P&L responsibility and to take on such a large part of the Nasdaq ecosystem.
So, it was just a huge opportunity. And I really, really enjoyed Carlyle a great deal, but I saw this as the better opportunity for me at that time.

Rascoff: And I would be a terrible interviewer if I didn't ask: When you took Carlyle public, did they end up listing on Nasdaq?

Friedman: They did, actually, and it was really interesting. We went through a full, what I call, “bake-off process." We had both of the companies come in twice. I just got to be a fly on the wall and watch each of them do their pitch. So, it was actually really, really fun.
I tried very hard not to be a part of the decision process, 'cause it really was up to the founders to make that determination. It was fascinating to see how they came at it so differently.

Rascoff: I'm sure that makes you a better CEO of Nasdaq now having been on the client side.

Friedman: Yeah. I'd say certainly going through the process of going public has made me — it really, really informed me in terms of what we could do at Nasdaq to make it a better experience, to help manage the client through that experience and then to realize just how hard it is. We are here to make companies' lives easier, and so what can we do as the exchange to make that process for our customers?

Rascoff: So, a perfect segue into Project Revitalize, which is a project that's important to you. It's something that you and I talked about at the Microsoft CEO Summit.

Friedman: That's right. I'm glad you remember.

Rascoff: I don't know if you had actually formalized it as a full initiative at Nasdaq at the time. But for our listeners, the basic issue here is there are, I think, half as many public companies today as there were a decade or two ago.

Friedman: That's right.

Rascoff: And many fewer IPOs. Of course, that's bad for Nasdaq's business, but it's also bad for the economy. It's bad for innovation. It's bad for the country, the world. There are a lot of different reasons why, and I think reasonable people disagree on the specific reasons.
But you're spearheading a group of initiatives at Nasdaq to try to address this. Why don't you describe what you're working on?

Friedman: Sure. Well, I think the first thing is we had to determine that there really is a problem. I think that we have been seeing this problem manifest itself over a long period of time, and so therefore you don't realize necessarily each year that you go through it that there is a growing issue.
But I would say that over the last three years, it's really culminated into something that's a known issue today, which is that over time the government has placed so many requirements on companies as public companies and the process of going public has become so much more challenging, the nature of investors has really become very different and that the environment around being a public company is very different today than it was 10 and certainly 20 years ago.
And so, we have been looking at what are the things that we can do to advocate on behalf of companies to make sure they find that the process of going public and being public is actually an inviting process and something that they want to pursue?
So, why do we care, and why should anyone who is listening to this care? The first thing is that 86 percent of all job growth in the United States since 2000 has come from companies after they have gone public. So, when we look at the companies before they're public and after they're public, 86 percent of the job growth came after they went public, and that's just in the last 17 years. If we look over a longer period of time, it's over 90 percent.

Rascoff: Partly because being public provides them with access to permanent capital, which allows them to grow. And so, if they're not able to get public, there won't be as much job growth.

Friedman: That's right. So, the whole purpose of going public is to give you access to growth capital. It's really a shot in the arm to allow you to grow and expand your business, and so if you don't have that now people say, “Yes, but there's so much private capital out there. It's so readily available. Why do I need to tap the public market so I can grow that way?"
And for some companies, and a very small subset of companies, that is, in fact, true that they can use private capital to do that. But for the majority of companies, they really still do have to ultimately access public capital to really get the amount of capital they're looking for. I think that we are assuming that that's available to everyone in the private markets, and it's not.
The second thing to realize is that when companies do access private capital, and they have all of this ability to grow using private capital, well, where is that private capital coming from? And I come from private equity. I'm a huge believer in private capital as being part of the ecosystem.
But that private capital is being made available to the wealthiest in the country, right? It's the wealthiest in the country that are generating that private capital and making it available to those companies, which means the vast majority of retail investors don't get access to these growth companies until they go public.

Rascoff: So when Microsoft went public in — when did Microsoft go public, in the early '80s, I think?

Friedman: Mid-'80s, mmm hmm.

Rascoff: Another $500 billion in market capital was created over the ensuing 30-plus-year period.

Friedman: That's right, and Amazon went public. They were $300 million in valuation, and they're now $400 billion. Another great company actually was Applied Materials that was here yesterday. So, they went public in 1972, the first year that Nasdaq existed. At that time, they were generating maybe $10 million in revenue, and today they are generating $14 billion in revenue.

Rascoff: And so, all of that appreciation accrues to investors, whether they be institutional investors or retail investors. It's egalitarian.

Friedman: Or retail. It makes it so that every investor gets to access it as opposed to a subset of investors. I think that private capital providers will say, “Yes, but we represent pensions," and that's totally true. But the average retail saver does not get access to those investments.
And I think it's really in our — I think it's frankly the government's responsibility, and it's Nasdaq and every exchange's responsibility to try to find a way to make the public markets more inviting for companies. So, we have a whole range of changes that we would like to see and that we will be strongly advocating for and pushing to make sure that we create a more inviting environment.

Rascoff: What types of things are those?

Friedman: So, we looked at disclosure obligations for companies as to what we require that they disclose every quarter and whether or not everything should have to be disclosed every quarter. We looked at proxy access and, frankly, how challenging it is to have these very, very small investors to have total access to your proxy.
There is some very large percentage of proxy reform proposals that are being generated by about four investors who just buy up the minimum amount of shares, and then they go out and they agitate. So, is that really what proxy access is all about?
Proxy firm reform. The ISS and Glass Lewises of the world, should they have to have more regulation and oversight to make sure that they're doing the right thing for the companies and the investors?

Rascoff: So, just on disclosure, do European companies only report twice a year and not four times a year? Do I have that right?

Friedman: It depends on the country. So, in the UK, that is absolutely true. They have an obligation to report a full report twice a year, and then they do these interim reports the other two quarters. I think that's a good model to consider.

Rascoff: You would advocate for that or advocate for evaluating that at least?

Friedman: Yeah. In fact, that's one of the things we said in there. There's also tax reform and things we can do on the tax side. There is, in fact, litigation reform to make it so that companies have a fairer environment when they're dealing with shareholder class action suits.
And then I think that then there's market structure. So, is every company being treated the right way in the public markets with a one-size-fits-all market structure, and should we be looking at a market structure that really is more tailored to smaller companies versus larger companies?

Rascoff: So, by that you mean, for example, different disclosure requirements for smaller companies than larger?

Friedman: Yeah, different disclosure requirements, but also different market models.

Rascoff: Okay. Wow, well, a lot to think about there. Obviously we went public relatively early as a company. We had $15 million in quarterly revenue, and people thought that was perhaps too small to go public. We went public with about a $500 million market cap, and we really followed that — it's quaint. You're right. People don't tend to do that anymore.
Now, most of the appreciation that has occurred at our company has accrued to public market shareholders, not private market shareholders, because we went public relatively early. In Zillow Group's case, it has been hugely successful and the right decision to have gone public early.

Friedman: Just using Zillow, for example: One of the great things about Zillow is that your users can now be shareholders, right? So, your users can be owners, and they understand your product. They understand it deeply because they use it.
So, they also understand the potential of it. They can really get involved and engaged in understanding what benefit they're getting, and therefore they can understand why this company is gonna be a growth company, right? So, it actually has been a great success story.

Rascoff: Thank you for the conversation, and thank you for being our exchange. Zillow Group proudly trades on NASDAQ. And thanks for having me today.

Friedman: Well, thank you so much. It was really a pleasure. Thank you.

The post Nasdaq's Adena Friedman on the Power of Going Public appeared first on Office Hours.

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This El Segundo Startup Wants to Manufacture Medicine in Space
Varda

🔦 Spotlight

Happy Friday, Los Angeles.

The next major pharmaceutical factory may not be built in Boston, New Jersey or Switzerland.

It may be orbiting hundreds of miles above Earth.

El Segundo-based Varda Space Industries raised a $251M Series D this week to advance an ambitious idea: manufacturing medicines in microgravity and returning them to patients on Earth.

The round was led by Lux Capital and Natural Capital, with participation from Founders Fund, Khosla Ventures, Caffeinated Capital, General Catalyst, 8090 Industries, Giant Step and Also Capital. It brings Varda’s total funding to $598M and reportedly values the company at $1.6B.

That is a considerable amount of capital for a company whose factories periodically fall out of the sky.

Then again, that is the point.

Varda builds compact spacecraft that serve as laboratories and manufacturing facilities in orbit. Its W-Series capsules carry pharmaceutical materials into microgravity, process them in space and return the results to Earth through the atmosphere at roughly 25 times the speed of sound.

Why travel that far to make medicine?

Without gravity pulling molecules downward, certain active pharmaceutical ingredients can crystallize in structures that are difficult or impossible to reproduce on Earth. Those differences could eventually enable drug formulations with improved stability, effectiveness or delivery methods.

The science is not entirely new. Researchers have studied pharmaceutical crystallization aboard the International Space Station for decades. Varda’s challenge is turning that research into something considerably less glamorous but far more valuable: a dependable commercial process.

In other words, the company does not merely want to prove that medicine can be made in space. It wants pharmaceutical companies to treat orbit as another step in the development and manufacturing pipeline.

That requires solving the less cinematic half of the space economy.

Rockets have made it increasingly routine to send cargo into orbit. Bringing commercially useful materials safely and repeatedly back to Earth remains much harder. Varda is building both sides of that equation, pairing microgravity processing with capsules capable of surviving hypersonic reentry.

Varda

Since launching its first mission in 2023, Varda says it has completed six successful reentry missions and has more than a dozen additional launches and returns planned through 2028. This week, the company also launched two W-Series spacecraft aboard the same rocket for the first time, marking another step toward operating multiple orbital factories at once.

The new funding will help Varda increase that flight cadence, expand its pharmaceutical partnerships and move closer to delivering what it hopes will become the first medicine manufactured in space for use by patients on Earth.

There is also a second business descending through the atmosphere.

Because Varda’s capsules encounter extreme hypersonic conditions during reentry, they double as research platforms for government customers testing heat shields, navigation systems and other defense technologies. That gives the company a near-term source of demand while its longer-term pharmaceutical market develops.

The combination is distinctly Southern Californian: part aerospace company, part biotechnology startup and part defense contractor, all operating from a city where building hardware for space has become almost commonplace.

But Varda’s larger opportunity depends on making the extraordinary feel routine.

A single successful space experiment is scientifically interesting. A repeatable network of orbital factories could become an industry.

With $598M raised, six reentries completed and a growing mission schedule, Varda has moved beyond asking whether manufacturing in space is technically possible. The more important question now is whether it can become economical, reliable and useful enough for pharmaceutical companies to adopt at scale.

For decades, Los Angeles helped build the machines that carried people and satellites into space.

Varda is betting the region’s next aerospace industry will be built around what those machines bring home.

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

🤝 Venture Deals

    LA Companies

    • Charter Space raised an oversubscribed $5M seed round led by Crystal Venture Partners, with participation from QED, Blank Ventures, Gaingels and Hustle Fund, bringing its total funding to $8M. The startup will use the capital to expand its sales team and develop insurance products for emerging space activities, including lunar missions, space-based nuclear power and in-orbit spacecraft servicing. - learn more

    LA Venture Funds
    • Emerging Ventures participated in OSCP’s undisclosed Series A, led by New Science Ventures and joined by 2050 Capital. The Montréal company will use the funding to scale production, expand its engineering and sales teams and launch next-generation photonic navigation sensors designed to operate when satellite signals are jammed, spoofed or unavailable. - learn more
    • Slauson & Co. participated in Satlyt’s $8M seed round, led by Non Sibi Ventures and joined by TLCOM, Antler, Launch Africa Ventures, Enza Capital and other investors. The Sunnyvale- and Nairobi-based startup will use the funding to expand its teams and develop software that runs AI directly aboard satellites, reducing costly data transmissions and eventually connecting multiple spacecraft into a shared orbital computing network. - learn more
    • StoryHouse Ventures participated in Parakeet Health’s oversubscribed $10M Series A, led by Canvas Ventures and joined by Blank Space Ventures and HMC INQ. The healthcare AI company will use the funding to expand its platform, which automates patient communications and scheduling, while growing across additional medical specialties and enterprise health organizations. - learn more
    • Parker89 participated in Homeward’s $120M Series D, led by Saluda Grade and joined by Citi Ventures, Norwest, LiveOak Ventures and other investors; the Austin proptech company also secured $330M in asset-backed debt. Homeward will use the financing to expand its cash-offer and bridge-lending products, improve its AI-powered underwriting platform and make its home-buying and selling services available nationwide. - learn more
    • BAM Ventures participated in OuterSignal’s $22M Series A, co-led by Long Journey Ventures and Abstract Ventures and joined by Top Shelf Ventures, AME Cloud Ventures and other investors. OuterSignal will use the funding primarily to expand its team and advance its customer-intelligence platform, which helps consumer brands personalize marketing using detailed profiles built from their existing commerce and CRM data. - learn more
    • Navitas Capital participated in EliseAI’s $350M funding round, led by Andreessen Horowitz and Bessemer Venture Partners and joined by Ontario Teachers’ Pension Plan and Sapphire Ventures, valuing the company at $4B. EliseAI will use the capital to expand its AI platform for housing and other essential-service industries, building tools that automate leasing, resident support and property operations across more than 6.5M housing units. - learn more
    • Bonfire Ventures co-led Destro AI’s $8M seed round alongside Base10 Partners, with participation from CoFound Partners. The Brooklyn startup will use the funding to expand deployments of its AI platform, which coordinates robots from different manufacturers across warehouse operations, while growing its engineering and research teams. - learn more
    • TenOneTen Ventures and Wedbush Ventures participated in Meadow AI’s $7M seed round, led by Ulu Ventures and joined by York IE, Flying Fish and Leadout Capital. The Seattle startup will use the funding to expand its AI-powered “digital secret shopper,” which monitors retail and restaurant operations in real time, while growing its engineering, product and sales teams. - learn more
    • Fika Ventures participated in Outmarket’s $34.5M Series B, led by SignalFire and joined by Permanent Capital Ventures, TTV Capital and Dash Fund. Raised just four months after its Series A, the funding will help Outmarket accelerate development of its AI platform, which automates insurance brokerage tasks such as policy reviews, coverage analysis, proposals and certificates. - learn more

    LA Exits

    • HMBradley, now operating as MBI, has been acquired by personal finance platform Monarch as the buyer surpasses $100M in annual recurring revenue and 1M members. HMBradley co-founder Zach Bruhnke will lead the newly formed Monarch Labs, where his team will develop additional financial products and services designed to help Monarch expand beyond tracking money into helping consumers manage it. - learn more
    • Vision Films has been acquired by Legacy Distribution, combining the Los Angeles companies’ film, television, documentary and specialty-content libraries into a single global distribution business. The combined company will retain the Vision Films name, with Legacy CEO Dana Webber taking the helm and Vision Films founder Lise Romanoff transitioning into a consulting role. - learn more
    • Creative agency Zambezi received a majority investment from health and wellness-focused private equity firm Manna Tree, with financial terms undisclosed. Zambezi will continue operating independently under its existing leadership while providing branding, media and production services to Manna Tree’s portfolio companies and pursuing new business across the broader consumer market. - learn more
    • Santa Monica-based Advertise Purple was acquired by AI-powered marketing company ONAR for up to $27.8M, marking the buyer’s largest acquisition to date. The affiliate marketing agency, which generated $17.1M in 2025 revenue, will retain its leadership team while adding its Bloom analytics platform and more than 111M performance records to ONAR’s technology portfolio. - learn more
    • EasyLlama was acquired through a majority recapitalization by private investment firm Inverness Graham, with financial terms undisclosed. The compliance software company, which serves more than 5,500 small and midsize businesses, plans to expand its platform, partner network and training content while pursuing growth through strategic acquisitions. - learn more

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      Rainmaker Just Raised $100M to Solve the Weather

      🔦 Spotlight

      Hey Los Angeles.

      Last year, we introduced you to an El Segundo startup that had raised $25M to make it rain.

      This year, rain is apparently just the beginning.

      Rainmaker raised a $100M Series B to expand its cloud-seeding technology and pursue a much larger ambition: building the scientific and technical infrastructure to understand, influence and eventually mitigate extreme weather.

      In startup parlance, it is a pivot from “make it rain” to “solve the weather.” Subtle.

      The round included NOA VC, DCVC, Lowercarbon Capital, Dream Ventures and LA-based Upfront Ventures.

      When we covered Rainmaker last year, the company was preparing to expand its drone fleet, atmospheric research and commercial partnerships.

      It now says it has generated more than 145M verified gallons of precipitation during a four-month period. During a summer research program near Homer, Alaska, Rainmaker says one operation produced 19M gallons in three hours.

      Those are eye-catching numbers. The company’s ambitions are considerably larger.

      Rainmaker is working to build what it calls a “Weather Prime,” combining atmospheric science, autonomous aircraft, sensors and predictive software into an infrastructure platform capable of responding to water scarcity and extreme weather.

      The idea is to make cloud seeding cheaper, more measurable and easier to deploy at scale. Rainmaker’s drones deliver specialized particles into carefully selected clouds, while radar and software help determine where to operate and measure how much additional rain or snow may have been produced.

      The new funding will help Rainmaker hire more atmospheric scientists, meteorologists, chemists and engineers while expanding its research and data-collection capabilities. The company also plans to move toward increasingly autonomous operations, allowing more missions to be conducted at a lower cost.

      Rainmaker expects its cost per acre-foot of water to fall below alternatives such as desalination and agricultural fallowing in the Colorado River Basin during the upcoming water season. If that projection holds, cloud seeding could begin looking less like an experimental intervention and more like another piece of water infrastructure.

      That “if” is doing some serious atmospheric lifting.

      Cloud seeding has existed for decades, but measuring its precise effects remains scientifically difficult. A successful operation requires the right type of cloud at the right moment, and proving exactly how much precipitation would have fallen without intervention is no simple task.

      Rainmaker’s next challenge, therefore, is not merely to produce more rain. It must make the results measurable, repeatable and credible enough for governments, farmers and communities to trust.

      That responsibility becomes even more important as the company expands its vision beyond water. Rainmaker describes cloud seeding as the first step toward eventually mitigating hail, heat and other weather-related threats.

      It is a grand ambition, even by startup standards. Most founders promise to disrupt an industry. Rainmaker wants to influence the atmosphere.

      The company’s location makes the mission particularly fitting. El Segundo has become a center for startups tackling physical problems with drones, satellites, factories and defense systems. Rainmaker is applying that same aerospace-minded approach to one of the West’s oldest constraints.

      For Los Angeles, this story is about more than another substantial funding round. Rainmaker has progressed from proposing that cloud-seeding technology could be modernized to claiming it has produced rainfall at a meaningful scale.

      Now, with four times the capital it announced last year, the company must prove that those results can become dependable infrastructure.

      California has never been shy about reshaping nature to support its growth. Rainmaker is betting that the next great water project will not be built across the landscape.

      It will fly into the clouds.

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

      🤝 Venture Deals

        LA Companies

        • Hair care brand Arey raised an undisclosed Series A led by Unilever Ventures, with returning investors Greycroft and Female Founders Fund also participating. The company, which develops supplements and topical treatments for graying and aging hair, will use the funding for product development, clinical research, hiring and retail expansion. - learn more
        • Fluxnium raised a $7M seed round led by Congruent Ventures, with participation from Constellation Technology Ventures and Active Impact Investments. The company will use the funding to develop, test and scale its fiber technology for extracting uranium from seawater, aiming to create a secure domestic alternative to conventional uranium mining. - learn more

        LA Venture Funds
        • Alexandria Venture Investments participated in BigHat Biosciences’ $75M Series C, co-led by DFJ Growth and Premji Invest, bringing the AI-driven biotech’s total funding to $223M. BigHat will use the capital to expand its autonomous protein-design platform and advance its AI-designed cancer therapies, including BHB810 and BHB299, toward key clinical milestones. - learn more
        • Alt Capital participated in Trebellar’s $18M Series A, led by Blossom Capital and joined by Haystack, 1Flourish and Bynd Venture Capital. Trebellar will use the funding to expand its engineering and go-to-market teams and enhance its AI platform, which helps enterprises combine fragmented workplace data to make better real estate decisions. - learn more
        • B Capital participated in Precision Neuroscience’s oversubscribed $250M Series D, co-led by Pershing Square, the Ackman Oxman Institute and an undisclosed life sciences fund, bringing the brain-computer interface company’s total funding to $430M. Precision will use the capital to expand clinical trials, advance its Layer 7 brain implant through additional FDA review and build the infrastructure needed for commercialization. - learn more
        • Mantis Venture Capital participated in Pilgrim’s $25M seed round, led by Buckley Ventures, which valued the Redwood City defense-biotech startup at $150M. Pilgrim is developing a portable system that monitors the air for viruses and other biological threats, with additional backing from Anthropic leaders, Coinbase co-founder Fred Ehrsam and other technology investors. - learn more
        • Starshot Capital participated as a returning investor in Mojave Energy Systems’ $19M Series B, led by Fairtree Elevant Ventures with a significant investment from River Bay Investments. The Sunnyvale company will use the funding to expand manufacturing, grow its sales team and develop new products for its energy-efficient commercial heating, cooling and humidity-control platform. - learn more
        • 4th Revolution Capital participated in infiniFi’s $3M-plus funding round, led by Electric Capital and joined by New Form Capital, Generative Ventures, Fasanara Capital and others. The decentralized finance platform will use the capital to launch infiniFi Prime, expand its products through neobanks and consumer finance apps and prepare for its Q4 token generation event. - learn more
        • Riot Ventures participated in American Supercritical’s $8M pre-seed round, led by Silent Ventures and joined by Harpoon, Reveille VC, Hillwood, Mana Ventures, Climate Capital and Alumni Ventures. The Denver startup is developing compact systems that use supercritical carbon dioxide to convert gas-turbine waste heat into additional electricity, potentially helping data centers generate up to 50% more power without using more fuel or water. - learn more
        • M13 led Baselayer’s $35M Series A, with participation from Torch Capital, Picus Ventures, Afore Capital and Socure executive Matt Thompson. The company will use the funding to expand its identity and risk infrastructure beyond businesses to AI agents, helping financial institutions verify who an agent represents, what it is authorized to do and whether it can be trusted. - learn more
        • BAM Ventures participated in Bird&Be’s $13M funding round, which was led by BDC Thrive and BFG Partners and joined by Founder Collective, Rejuvenation Ventures and HSR Ventures. The fertility and wellness brand will use the capital to develop new supplements and at-home diagnostic tests, expand its retail presence and broaden access to evidence-backed reproductive care. - learn more
        • March Capital joined Snorkel AI’s $350M Series E as a new investor, participating in a round co-led by Insight Partners and S32 that valued the company at $3.5B. Snorkel will use the funding to expand its platform for creating the specialized datasets and training environments needed to develop and evaluate advanced AI models and agents. - learn more
        • Clocktower Technology Ventures is among the investors backing Soteris, which has raised more than $8M in seed funding led by Spider Capital. The Y Combinator-backed insurtech company has emerged from stealth with an AI platform that helps property and casualty insurers identify the profitability and expected losses of individual policies, potentially improving margins without changing rates or staffing. - learn more
        • Smash Capital led Firecrawl’s $75M Series B, with participation from Altos Ventures, Nexus Venture Partners, Y Combinator, Freestyle and Offline Ventures. Firecrawl will use the capital to expand Alexandria, its new platform that gives AI agents one place to access the live web, specialized indexes and licensed data while compensating the people and organizations supplying that knowledge. - learn more
        • ND Capital participated in Ramona’s $25M Series A, which was led by ARCH Venture Partners and joined by Stealthpoint, Fall Line Capital, Hamamatsu, Murchison Capital Partners and Overlap Holdings. Ramona will use the funding to expand production and grow its team as it scales a 24-camera microscope that captures entire biological experiments at cellular resolution, generating richer data for drug discovery and AI models. - learn more
        • Chisos Capital participated in Axio BioPharma’s $2.4M pre-seed round alongside Elmstead Partners, the Chemical Angel Network and several angel investors. The Madison-based company will use the funding to deploy its Axio Lattice platform, which connects manufacturing data across pharmaceutical companies and their partners without requiring either side to replace existing systems or relinquish control of its data. - learn more

        LA Exits

        • Zuma has been acquired by real estate technology company Venn for $50M, bringing its AI leasing tools and engineering team into Venn’s platform. The combined company plans to help multifamily operators automate leasing and eventually expand its AI capabilities into collections, renewals and resident support. - learn more
        • GTXN was acquired by digital asset platform Luno for an undisclosed amount, bringing its licensed collection and payout infrastructure into Luno’s operations. GTXN will serve as Luno’s cross-border payments arm, helping enterprise customers move money between developed and emerging markets through a single provider with fewer intermediaries and faster settlement. - learn more
        • Podium Entertainment was acquired by private equity firms Shamrock Capital and Flexpoint Ford for more than $400M, with GoldState Music also taking a minority stake. The audiobook and publishing company, which has built a catalog of roughly 15,000 titles by working with independent authors, will retain its existing management team. - learn more

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          Impulse Space Just Raised $308M to Build the Roads in Orbit
          Impulse Space

          🔦 Spotlight

          Happy Friday, Los Angeles.

          Space may not have roads, but it still has a transportation problem.

          Rockets have become remarkably good at carrying satellites beyond Earth. Once those satellites reach space, however, getting them from one orbit to another can still be slow, expensive or impossible.

          Redondo Beach-based Impulse Space wants to change that, and investors are giving it considerably more fuel for the journey.

          The company raised a $308M extension to its Series D, bringing the round’s total to $808M. The new financing comes just over three months after Impulse announced the initial $500M raise and pushes its total capital raised above $1.3B.

          Existing investors 137 Ventures, BANNER VC, DFJ Growth, Linse Capital, Lux Capital and Valor Equity Partners participated in the extension. Impulse did not disclose a valuation, but convincing existing backers to commit another $308M so soon after an already substantial round is a strong signal of confidence in both the company and the market it is pursuing.

          Founded by former SpaceX propulsion executive Tom Mueller, Impulse is building vehicles designed to move satellites and payloads after they have already reached space. If rockets are responsible for getting cargo off the ground, Impulse wants to handle what happens after delivery.

          Impulse Space

          Its Mira spacecraft is built for precise maneuvering, payload deployment and proximity operations in orbit. Helios, scheduled for its first flight in 2027, is a high-energy kick stage designed to move payloads from low Earth orbit to destinations such as geostationary orbit in less than a day. The company has also introduced an electric propulsion system called Electra and a rideshare service aimed at making higher-energy orbits more accessible.

          Together, those products represent something larger than a collection of spacecraft. Impulse is attempting to build a transportation network for an economy that increasingly needs one.

          That need is becoming harder to ignore. More satellites are reaching orbit, governments are prioritizing responsive space capabilities and commercial operators want greater flexibility after launch. A satellite that can change position, reach a different orbit or respond quickly to a new mission is significantly more useful than one permanently tied to its original destination.

          The U.S. government is already putting Impulse’s thesis to work. Helios was selected for the U.S. Space Force’s National Security Space Launch Phase 3 Lane 1 program, making it the first upper-stage prime awarded a position in the program. Impulse also received a $28M contract extension to provide two Mira spacecraft for additional Space Systems Command missions.

          The company says its headcount has more than doubled over the past year as it expanded its facilities in Redondo Beach, Mojave, Boulder and Washington, D.C. The new capital will support further hiring, product development and facility growth as Impulse works to serve commercial, civil and defense customers.

          It also recently appointed its first chief financial officer, Adam Townsend, who previously helped guide Vizio through an IPO and its eventual sale to Walmart. The hire is another sign that Impulse is preparing for a more complex chapter, one defined not only by engineering milestones but also by a growing capital base, government contracts and large-scale operations.

          That is where this announcement becomes more interesting than its considerable price tag.

          Impulse has already shown that Mira can operate in space. Now it must prove that it can turn several ambitious vehicles into dependable infrastructure. The difference between a promising spacecraft company and a transportation network is repetition: more missions, more customers and systems that work reliably enough to become part of how the space economy operates.

          An $808M round gives Impulse the resources to pursue that vision. It also raises the expectations attached to it.

          For Southern California, the financing reinforces the region’s role in the new space economy. Los Angeles helped build the original aerospace industry, and a new generation of companies is now developing the vehicles, factories and infrastructure intended to support life beyond the launchpad.

          Impulse Space is tackling what may be the next big bottleneck. Getting to space is only the beginning.

          Someone still has to get you where you are going.

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

          🤝 Venture Deals

            LA Venture Funds

            • Riot Ventures co-led EnduroSat’s $205M funding round alongside Atreides Management, with participation from GV, Founders Fund, Lux Capital, the European Innovation Council and other investors. The Bulgarian space company will use the capital to open a high-volume satellite factory in the U.S., build a major European space and defense hub and scale production of its standardized spacecraft. - learn more
            • Upfront Ventures and M13 participated in Ayble Health’s $16M Series A, led by Neon and joined by Unum Ventures, Cleveland Clinic Ventures, DigiTx and Accomplice. The virtual-care company will use the funding to expand its AI-enabled clinic for chronic digestive and autoimmune conditions across national health plans, major employers and benefits platforms, bringing its total capital raised to more than $27M. - learn more
            • Blue Heron Ventures participated in Voxela’s Series A, led by Delight Ventures and joined by SOMPO Growth Partners, Happiness Capital, Archetype Ventures and ALL STAR SAAS FUND, bringing the eldercare technology company’s total funding to approximately $13.2M. Voxela will use the capital to expand hiring and develop new AI capabilities for its VCare platform, which helps care facilities monitor residents, prevent incidents and automate administrative work such as documentation and reporting. - learn more
            • Clocktower Technology Ventures participated in Mainstay’s more than $18M growth round alongside new investors Parker89, Stackpoint, Alpaca VC and FJ Labs, as well as returning backers Khosla Ventures and Era Ventures. Mainstay also acquired AI-powered listing platform Truelist and will use the funding to bring its real estate data, pricing and automation infrastructure to more brokerages, agents and smaller investors. - learn more
            • Amboy Street Ventures participated in Evvy’s $40M Series B, led by Catalio Capital Management and joined by new and returning investors including Rethink Impact, Muse Capital, Labcorp Venture Fund and General Catalyst. Evvy will use the funding to expand its AI-powered women’s health diagnostics and care platform, beginning with fertility, while growing distribution through physicians and strategic partners. - learn more
            • Second Sight Ventures participated in Fin.com’s $20M seed round, led by Expa and Uber co-founder Garrett Camp, with backing from Coinbase Ventures and other investors. The payments infrastructure startup will use the funding to expand its cross-border network through additional acquisitions and plans to acquire a bank within six months. - learn more
            • Clearlake Capital, Mantis Venture Capital and Sound Ventures participated in Factory’s $200M funding round, which valued the AI software development company at $5B and brought its total funding above $400M. Factory will use the capital to accelerate research, product development and global expansion for its platform, which enables enterprises to build, manage and improve software using autonomous AI agents. - learn more
            • Navitas Capital led Scaffold’s $15M seed round, with participation from D.R. Horton, Pulte Homes, Builders FirstSource and other construction-industry investors. The Austin startup will use the funding to expand its engineering team and broaden its AI-powered platform, which connects homebuilders, contractors and suppliers to automate scheduling, purchase orders and other coordination work. - learn more
            • Halogen Ventures led it’s electric’s oversubscribed bridge round, joined by Wisdom Ventures, Future Communities, E8 Angels and other new and returning investors, bringing the curbside EV-charging startup’s total funding to $15M. The financing will support its rapid expansion, including a New York City contract to install hundreds of locally manufactured chargers across all five boroughs over the next three years. - learn more
            • Matter Venture Partners participated in Delos Data’s more than $100M funding round alongside Matrix, Playground Global, Socratic Partners, Capricorn’s Technology Impact Fund and IAG. The Palo Alto startup will use the capital to expand its engineering teams and accelerate development and sales of its Nonstop AI infrastructure, designed to reduce network bottlenecks and improve the speed and efficiency of AI inference. - learn more
            • Mantis Venture Capital and Gold House participated in A Vinyl Bar in Shibuya’s $5.5M pre-seed round alongside SV Angel, BoxGroup, Quiet Capital and other investors. Founded by Spotify’s former head of innovation, the startup is developing playful music apps that let users remix, manipulate and collaboratively create sounds rather than simply stream or generate songs. - learn more

            LA Exits

            • Headspace has agreed to be acquired by AI healthcare company Sword in a deal expected to close by the beginning of Q4 2026; financial terms were not disclosed. The acquisition will combine Headspace’s mental health brand, global consumer base and network of more than 15,000 providers with Sword’s AI-powered clinical platform to offer more personalized and continuous care. - learn more
            • Nasty Gal was acquired by WSG Brands for an undisclosed amount, adding the women’s fashion label to a portfolio that also includes Von Dutch and Allbirds. WSG plans to expand Nasty Gal internationally and into categories such as footwear, beauty, activewear and accessories while growing its direct-to-consumer, wholesale and licensing businesses. - learn more
            • Converse Health was acquired by healthcare AI company Hello Patient for an undisclosed amount, bringing its back-office automation technology into the buyer’s platform. The combination will allow medical practices to use one system for patient communications and administrative work such as referral processing, chart follow-ups, authorization paperwork and medical records. - learn more

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