OfferUp CEO Nick Huzar on Evolving as a Leader

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.

OfferUp CEO Nick Huzar on Evolving as a Leader

Nick Huzar is co-founder and CEO of OfferUp, the largest mobile marketplace in the U.S. The company has reinvented the model for local, peer-to-peer commerce, and its engagement metrics are incredible. In 2017, the company reported that it had over 60 million downloads and 43 million users who use the platform as frequently as popular social media apps. Today, OfferUp is one of the highest valued private companies in the Pacific Northwest, officially gaining unicorn status. In this episode, Nick offers advice for leaders about scaling a company, the importance of building trust and how his leadership style has evolved with OfferUp's growth.

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


Spencer Rascoff: I'm in Bellevue, Washington today, near Seattle, with co-founder and CEO, Nick Huzar, of OfferUp. Hey, Nick. Thanks for having me.

Nick Huzar: Hey, really nice to be here.

Spencer: So for those unfamiliar with OfferUp, tell us a little bit about the company and the product, from a consumer standpoint, and when you started it, what the mission was.

Nick: Sure. Well, I started OfferUp from a personal pain point. I had a baby on the way, and I literally had a room full of stuff, and I was just thinking to myself, “Kill me. There's gotta be a better way to sell all this," and there really wasn't, so –

Spencer: Pre-baby decluttering, nesting phase.

Nick: Yeah.

Spencer: I'm very familiar with that.

Nick: Yeah. For all the parents out there, they can relate to what I was going through. So what I saw at the time was a huge opportunity. I believed that the smartphone would be something that everyone would have, and at the time – this was seven years ago – not everyone – most people, in fact, didn't have one.

Spencer: Now remind us. There were iPhones, but no App Stores?

Nick: Yeah, and Android was barely a thing, right?

Spencer: Right.

Nick: So I think there was a few assumptions me and my cofounder made. One, everyone would have one of these, which today you look back and say, “Well, duh." Two, we thought the cameras would get better, and three, ultimately we just felt that everyone would pay from these devices. So I think all those trends had started to manifest in some way. So for me, when I was kinda building and designing the initial app, I was really building it for myself.

Spencer: And that's the way the best products are built.

Nick: Yeah, and I still, to this day, you know, a lot of stuff in my house is from OfferUp. My kids, most of the stuff now – I have two kids now. Most of the stuff that they get is all from OfferUp. I don't buy them new stuff because they don't like it very long. So I think the opportunity I saw was big. I think a lot of the existing players that were out there were respectable, but they were built in a desktop era, and I think mobile gave us an opportunity to really reimagine the entire local buying and selling experience.

And so when we think about OfferUp in the long term, our vision is to really help to transform local buying and selling, and we think the opportunity is way bigger than where we are today. Our mission is to be the largest, simplest, and most trusted marketplace for local, and so I think we still have a very long way to go. It's amazing to see how fast we've actually grown. We're one of the top shopping apps in the country, definitely the largest mobile marketplace out there, so OfferUp's really starting to become a household name in a lot of markets around the country, and again, I think there was a lot of people that were like me. They just didn't have the time to deal with the existing solutions, and they found OfferUp to be something easy to use.

Spencer: So I want to come back to growth and scaling and how the company is, which is now a couple hundred employees, has changed since its founding seven years ago. Just to round out the picture of the competitive landscape, I guess in those early days, you were really competing with Craigslist online, on desktop, and then whatever other hacky, offline solutions people found, if it was at college campuses, putting a poster on a board in a shared space or something. And then there's some newer digital competitors as well on mobile, but I mean, do you think of traditional e-commerce, like Amazon for new goods, as a direct competitor as well?

Nick: So, to be clear, we've had competitors the whole way. Every year one will come and go, and it's just been probably, you know. This is kinda how it's evolved over time. I like to really obsess, so – and my belief is it's – we're really expanding the market, so I never went into this business to even convert a single Craigslist user. I believed that the market was way, way bigger. I believed there was more people like me that weren't using it, and we see that today.

We see a lot of people that said, “I never used X, Y, Z platform," and I use OfferUp all the time, because it's simple, and it works, and so 85 percent of commerce is still local, even in the world of eBay and Amazon, all these amazing e-commerce sites, and that's what we're after. We wanna expand into that market. Now, clearly, Amazon's an amazing company, and they'll continue to kind of chip away at that, but I really think of that as the opportunity. Our biggest focus is reducing friction, and our belief is the more we do that, the more people participate in commerce in this way.

Spencer: How competitor focused is your company versus product focus? This is something a lot of startups kind of struggle with, trying to find the right balance.

Nick: Yeah, so I don't think we really obsess or talk about competition hardly at all. We acknowledge them and definitely wanna understand kind of what are they doing out there in the world, but our obsession is really internal in our customers and really building this simplest and trusted experience, so we really obsess over that. And our belief is the more we do that, the more people continue to use OfferUp, and we believe that that's what the winning approach is. You can try all these other marketplaces, but if you're gonna have – whatever one's gonna yield the most success, where you're either buying or selling, is the one you're gonna use the most, so we really obsess over the product quite a bit.

Spencer: Yeah, so I think competitor aware, consumer focused, consumer obsessed is probably the right balance.

Nick: Yeah.

Spencer: I mean I've done two startups, Hotwire and Zillow. Hotwire was competitor focused. When we started it, we were really focused on competing with Priceline in the discount travel space. Zillow was consumer focused. We certainly have competitors, have had competitors, have acquired some competitors, but we've never been overly consumer focused at all, and I will tell you that from an employee standpoint, it is a much more inspirational, aspirational place to work if you're consumer obsessed and not competitor obsessed. It was kind of soul-sucking at Hotwire to – every accomplishment, every metric was always being measured against Priceline, this other competitor, and it was –

Nick: Yeah.

Spencer: Yeah, I guess it was good motivation, I guess, but it wasn't nearly as fun.

Nick: Yeah, really, and in our case, you – the great thing about OfferUp is you have to go meet and talk to people. It's not a product where – you know, our whole office is furnished from OfferUp. The chairs we're sitting in, in the room we're in, and that's great, because as an employee, you get to go meet them, and talk to people, and learn how to make it better, and actually get to interact with people, and I think in most companies you don't have that opportunity.

Spencer: So the product, from a consumer standpoint, is take a photo of this thing in my garage, press a button, post it, find a buyer, and then I meet them in an OfferUp kind of safe community space, which addresses some of the trust and safety issues that other local marketplaces have encountered, and do you charge the buyer or the seller? What's your revenue model?

Nick: Yeah, so today we have an advertising product. We just introduced shipping. There's many other, I think, exciting things we'll be introducing in the future, but it's kind of a combination of an ad model and then there's a small take rate for transactions that do happen on the platform.

Spencer: Let's fast forward to today. You started about sevenish years ago. Today, 2018, how much capital have you raised? How many employees? What other business metrics can you share with listeners so they get a sense of the scale of the company?

Nick: Sure. So we have over 230 employees today. We've probably raised over $230 million in capital, and we've had over 70 million installs in the US, and like I said, if you go into the App Store, under shopping, you'll see that it's usually one, two, or three. We either trade with Wish or Amazon and OfferUp, and so I felt pretty proud considering how well funded and large both those companies are. That we're in good company considering how small we are relative, you know, as a team, and so, you know, people use OfferUp a lot, and we're becoming kind of a – people engage in OfferUp more like social media. People spend on average, 20 minutes a day, almost every other day of the month.

Spencer: Wow.

Nick: And so people are really engaged, and they're trying to find and discover things that are nearby, and I think – or they're selling something, but it's really interesting to see how people engage in OfferUp versus other e-commerce platforms. We were designed to be visual and discovery-based and I think a lot of other marketplaces are just not built for, you know. They weren't built around all the power in the smartphone, and so we just took a different lens and a different approach to all that.

Spencer: Is there even a desktop product?

Nick: What's interesting is our web team, until probably 18 months ago, was one guy, and he's awesome, but we kind of – that's been growing quite a bit. Actually, our web metrics are now growing and usage is continuing to grow there. So we've been investing a lot more there in the recent number of years, but we're definitely a mobile-first company. That's where a lot of our innovation and focus is, but still, spending more time on the desktop than before.

Spencer: Now you're a Seattle-based company. You're in Bellevue, which is sort of suburban Seattle, and yet you are a unicorn. That's kind of a weird term. I don't know if you embrace it or not and you accept that descriptor.

Nick: No.

Spencer: But it seems to me that the way you've built OfferUp is a little different than some Bay Area tech companies. I mean you're very focused on the consumer and consumer PR, for example, but you haven't been as front and center in the tech trade press as a lot of other tech companies at similar stages. Is that fair to say?

Nick: Yeah.

Spencer: And why is that?

Nick: I think historically, our focus is really again, just customer, and really honing in on the business and really trying to get deep local market and kind of penetration and so a lot of this I think was fairly strategic and very, you know, forward thinking, where even after Andreessen Horowitz invested, we said, “Don't put us on your website." Like, “Mark, please don't tweet about us," and that gave us a number of years to grow around the country before we had more serious competition.

And it enabled us to build these beach heads in some of the most important, I think, markets in the country. And so if you live here, you know kind of what markets and the dynamics are, and you're local, and I think being local has a huge advantage. You really know kind of what's going on, and so I think a lot of this was, you know, we always believed there would be big companies trying to come after this space, and there are now, but again, years ago we kind of planned for this, and I think that was very, very important and strategic, so –

Spencer: Interesting. How very Seattle. I like it.

Nick: Yeah. One of the last markets we ever launched, by the way, was the Bay Area, on purpose, like, years, and so by the time anyone woke up in the Bay Area, we were already pretty deep in many markets, like I think where you live in LA, it's a massive market for us.

Spencer: Yeah.

Nick: But that was one of the earliest markets we launched, and so San Francisco actually came a lot later.

Spencer: That's interesting. I mean most tech companies obsess over the number of Recode and TechCrunch mentions that they get, and you've taken a pretty – a very different approach. Okay, so here we are today, late 2018. You're building out your strategic plan for 2019, 2020, and beyond. Put us in your shoes. What are the things that you as the CEO and the founder face? What do you worry about? What's top of mind for you?

Nick: Yeah. So I think a few things. So, one is just scale and structure. And so when you're small, you don't need a lot of structure, because you're all sitting together. Everyone's aligned and understands, but as you fast forward over the next number of years and you've seen this movie more than I have, but you need that.

You need to get ahead of it. You need to kind of lay out mile markers that help everyone be aligned on where they're going. You need to be able to bring in more leadership that's also seeing the moving, so that's a lot of what's top of mind for me, is continuing to elevate my team and the leadership team to help us on the next chapter of growth. I think in many ways I always say that we're Amazon in the book phase. We are nowhere near where I see this company going.

So how do we start to layer in other things that we think are game changing to the business, and so I think there's multiple things that we have incorporated that have been proven, but there's also a lot of things that we've built as a company that we pioneered that no one else has done. And I think that's really critical, so like an example would be all the things we do around trust and safety. So early on, we built out our TruYou program, and we did it because we knew trust really mattered. We're bringing two people together face-to-face.

Well, who is the person that you're actually engaging with? And so how TruYou works is you can opt in for it. First step is you scan an ID. Second step is we ask you to take a selfie, and then we actually do some image recognition, and match that. If you do it, you have a really prominent badge on your profile that says you're a TruYou member, and that's a big endorsement, we think, in the community.

Spencer: It's pretty much everything that Craigslist is not.

Nick: Yeah, they didn't do that, or where do you wanna meet? That's a logistic challenge, and people go back and forth on that. We try to make that simple, so we leverage natural language processing. We actually suggest meetup locations, and as you've seen, we have this in this lobby. We have thousands of these meetup locations around the country, in retail stores, in police parking lots. That's something, again, that we pioneered. We kinda just said, “We wanna make it easier and find well-lit locations to have people transact," and so that's another thing that I think we focused on and we said, “Trust matters, and we're gonna do something that hasn't been done before."

Spencer: Do you find competitors now trying to drop behind that and use those spaces and –

Nick: Not, I think, to the degree that we do. I think that it's easy to say, “Oh, yeah, we care about trust," but I think you have to really kind of look at how much investment and time are you really focused, and we really – it's a core part of our team and our company's trust, so –

Spencer: So for listeners who are scaling their own company and thinking about how to take their company to the next stage, I guess one of the things that I'm hearing is you're very deliberate and thoughtful about this. You're not just a boat kind of letting the waves take you in one direction or another. You're trying to be really circumspect about what do I need to position the company for success over the next couple of years? And what do I need from my management team? What do I need for me? I mean you're probably asking yourself, how do you need to change as a CEO?

Nick: Yeah.

Spencer: I mean, at least when I was at – when my company was at your size, I was in the process of changing things, like what meetings do I go to? How do I communicate? What input do I give? So when you're 30 employees, 50 employees, 100 employees, the CEO, or other executives that doesn't even figure, but as the company gets bigger, I've had to change the way I communicate. Does this resonate? Is this –

Nick: Totally.

Spencer: Yeah, okay.

Nick: [Laughter] Yeah. I'm going exactly through this metamorphosis right now. Yeah, and I think the – sometimes I miss the days when we used to sit at one table with 20 people.

Spencer: Right.

Nick: Like you didn't have communication challenges. Everyone knew what you were doing. The downside, you can kind of limp along at that stage and do one thing. As you get bigger, alignment and communication becomes the challenge, and you have to over-index on that. And so I've had many mentors tell me the same thing. You need to repeat yourself, and again, I feel like I'm treating people like children, but I realize, “Hey, wait. You have new people here. They haven't heard the same message."

Spencer: Yep.

Nick: I find lately I'm kind of evolving into more of a coach role too, where I'm trying to help other people do the same, where they'll get frustrated and say, “Well, I already said this to Bob," and I said, “Yeah, but you need to say it again. We're evolving. Just make sure it's top of mind." And so that's one. I'm very focused on my calendar and my time and wonderful people on my team that are helping me to kind of manage my time, but I'm also – I'm looking at it now and I'm already mapping out next year.

I'm like, “How do I wanna be spending my time?" So I'm trying to be very thoughtful and deliberate on how I want that to change, and then what meetings I need to be in, and how I need to be in them. I think how I communicate, same thing, where words matter. One word – I've got – you're kind of screwed either way sometimes, and I'm like, “Man, I said that one thing and it made that person upset. Now I kinda wanna follow up and say, 'Hey, you know what? Let me elaborate a little bit more.'"

Spencer: Yeah.

Nick: I think part of the challenge also with communication is I don't have a lot of time in a day. I don't have time to read big decks. I don't have time to go into e-mails. I don't have time to explain for 30 minutes what I mean. I have to be succinct and I need information presented to me that's succinct so I can make an informed decision. So I think that's really happened a lot more in the last year, just being sensitive to my time a bit.

Spencer: We've experimented with different decision making rubrics. LinkedIn uses rapid. There's another one called RACI, R-A-C-I, or something. They're all different acronyms for things that basically say when you're trying to make a decision, determine up front who's the decision maker, who provides input, who needs to be informed, et cetera.

Nick: Yep.

Spencer: Because there are a lot of things, as we've grown, that it's just not clear whose decision it is. Is it my decision? Is it someone's decision? I don't know. Nobody knows.

Nick: Yeah.

Spencer: And we definitely struggle with this. On the communication thing, what I've done is I've tried to make a habit of explaining who is – when these words come out of my mouth, or through my keyboard, or my phone, in what capacity am I saying it? I'll be like, “I'm giving this feedback just as a user of the products. Just take it for – as one person's input."

I'm saying, or I'm saying this as the CEO, “Go do it," or I'm saying it as the, you know, someone that's providing input to you who's gonna go make the decision here, and this is just my advice, do whatever you want. And like, giving that context is helpful, mostly helpful, well, certainly helpful for the recipient, but also helpful for me as well, to like, remind myself of – in what form, in what context am I providing this input [crosstalk] that's helpful? Let's just say five years from now, OfferUp doesn't achieve the success, its destiny that you think it's on the path of. What went wrong? What do you think happened?

Nick: I always say that the problems are internal, not external. I believe that, again, I obsess over shaping culture, I think, and developing people, and helping the team to evolve. So I think that's a challenge. It's even harder, rapid growing companies, especially these days, where if you think about companies and financing and the time horizons a decade ago, you could go for years and do, like – there's just more, faster, and I think my obsession is really trying to help elevate leadership and shape culture and really make sure the right people are at this company and are thinking long term.

And I think that's it. I like to think of our phase as the awkward teenage years where we're not quite the adult yet. We've got acne. Our voice is cracking. We're tripping sometimes. So how do we kind of best get through that and kind of hit our stride and really be high performing? I think we're just kind of in that phase. So I think that's the biggest thing I think about.

Spencer: You're an engineer, and you created the product in your own –

Nick: I wouldn't say I'm an engineer.

Spencer: No?

Nick: More designer product guy I would say. I'm a terrible – I coded on the web, but I'm a terrible developer, so –

Spencer: Okay, so you're a product person?

Nick: Yeah, more product.

Spencer: And you created the product in your likeness to solve a problem that you had.

Nick: Sure.

Spencer: How do you think about your ongoing connection to the product? As the company gets bigger, do you decide to step back a little bit from the product and let others exhibit more product ownership so that you can focus on some other things, or is product – is OfferUp you and you will always be OfferUp from a product standpoint?

Nick: That's a good question. So I would say my obsession and where I wanna kinda evolve is I think I'm really good at the end-to-end experience, and so the first product I designed, and I didn't design in a vacuum. I would draw things in Photoshop. I'd ask my wife on the couch, and she's watching TV. She got sick of me showing her designs, and I said, “Okay. I'm gonna go out and just start to talk to people." So I talked to friends and family. I would go talk to local merchants. “What do you think about this?"

And I would constantly get feedback, and I find I've been doing that ever since, and even today, I'm probably one of the top people in the company to find bugs in the product. I definitely have a lot of opinions about the experience and it only gets more complex as the business evolves, so I don't think I'll ever stop obsessing over the end-to-end experience. And I think just given my visibility and what I understand about the market, I think that's my strength, and I think that's what I bring to the table. Where I think I can evolve is going from, you know. I don't have to be in product meetings and going deep for hours on end.

I think that's things I'd be willing to kind of give up, but I do really care about the end-to-end experience, because I think if you stop focusing on that, it becomes really – it can become spaghetti and not great. And I do believe what I tell our team is, “We're not building a marketplace. We're not building an app. We're building an experience," and I don't think there's many things in this world where you think of that.

I think of the iPhone as an experience. I think of the Tesla as an experience. It is something that kinda grabs you, and it's like, you can't explain exactly what it is, but it's so elegant and easy and it just becomes part of your life that it just – you use it every day. And so I think that's my obsession. I think that's where I'm the strongest, which means I gotta give up other parts of the business.

Spencer: And at 250-something employees, have you already started letting go of some of the detail on product, or that you were forward-looking in what you just ______.

Nick: To some degree, but I like to do more, because I think we're definitely more complex now. We have more lines of revenue. We have more things that we're getting into, and it's just not scalable for me, so it's again where I'm looking around at the leadership team and saying, “Okay, great, but we also have gaps and roles we wanna fill."

Spencer: I remember the woman that runs product at Zillow, for Zillow products, when I started pulling back, as you're describing, from some of the detailed product decisions, and I started delegating more, as you need to, to free up more time to do other things. And she said to me – there was a particular decision that I delegated to her and to the team to make. And they made a decision that I didn't agree with. It kinda came out the other end in the product, I don't know, three, six months later. It was a tiny little thing. I don't even remember what it was, and I remember when I went back to her and was kind of, you know, giving her a hard time about it, she was like, “When you delegate a decision, you need to accept the outcome."

And I was like, “Oh, yeah. I guess she's right. I guess I do need to accept the outcome, whether I like it or not." So I mean what I found at this stage, from like, 200 to 400 or 500 employees, as you're going to experience soon, as I started pulling back from some of the product details, that was definitely the right decision. It was the right thing for the company.

Well, congrats on the success of OfferUp so far. I'm excited. I mean, the last time we got together without microphones, I think you were like, 50 employees and the company was a lot smaller. It's amazing to come in today, and see new office space, and an incredibly vibrant culture, and the success that you've had, and I'm excited to see what's next for you.

Nick: Thanks. Well, thanks for having me.

Spencer: Thanks, Nick.

The post OfferUp CEO Nick Huzar on Evolving as a Leader appeared first on Office Hours.

https://twitter.com/spencerrascoff
https://www.linkedin.com/in/spencerrascoff/
admin@dot.la
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

      Download the dot.LA App

      From Breaking Tech News to Backing It
      Image Source: Sources

      🔦 Spotlight

      Hey there, Los Angeles.

      For the past decade, Alex Heath has made a career out of figuring out what the technology industry is doing before everyone else.

      Now, he is going to invest in it.

      Heath announced this week that he is joining Los Angeles-based Sound Ventures as a partner on its investing team. The veteran technology journalist will continue independently operating Sources, the newsletter and podcast business he launched after leaving The Verge last year.

      It is an unusual career move, but perhaps not as unusual as it initially appears.

      Journalists and venture capitalists spend much of their time doing surprisingly similar work. Both look for signals before they become obvious, build relationships with people who know what is coming next and attempt to distinguish a lasting shift from a convincing story.

      The crucial difference is what happens after they find one.

      A journalist publishes. An investor writes a check.

      Heath has spent years reporting on some of the technology industry’s most powerful companies and executives. At The Verge, where he served as deputy editor, his work focused on the internal decisions shaping companies such as Meta. More recently, Sources has taken readers inside the AI race through reporting and interviews with executives including Sam Altman and Mark Zuckerberg.

      That experience gives Sound something venture firms increasingly want: someone who already understands the founders, companies and narratives competing to define the next era of technology.

      Sound Ventures is not exactly starting from scratch. Led in Los Angeles by Guy Oseary and Effie Epstein, the firm manages nearly $2B and has backed companies including OpenAI, Anthropic, World Labs, Brex, Affirm and GitLab. According to The Wall Street Journal, Sound deployed more than $800M into early positions in OpenAI, Anthropic and World Labs as it intensified its focus on artificial intelligence.

      Heath is joining during an important transition for the firm. Ashton Kutcher, who co-founded Sound with Oseary in 2015, departed earlier this year to launch a new venture firm. Oseary and Epstein are continuing to lead Sound while raising its fifth flagship fund and sharpening its strategy around companies with the potential to reach meaningful commercial scale.

      Adding Heath suggests that Sound’s next phase will not be defined by capital alone.

      As AI makes it faster and less expensive to build software, technical capability may become less effective as a differentiator. More startups will be able to create credible products, and more of them will compete for the same finite supply of customers, talent and attention.

      In that environment, knowing how to identify a compelling founder is only part of the job. Venture firms also need to understand how companies earn trust, communicate what makes them different and remain culturally relevant in an increasingly crowded market.

      That is familiar territory for Sound. Oseary built his career managing artists including Madonna and the Red Hot Chili Peppers, where recognizing talent was inseparable from helping that talent connect with an audience. Heath brings a different version of the same instinct, developed through finding important stories and understanding why people should pay attention to them.

      Heath will continue owning and operating Sources independently while expanding its podcast and interviewing prominent voices across the technology industry. That means he is not abandoning the platform or audience he built. He is adding a new vantage point.

      The combination could prove especially valuable to Sound. Heath brings the instincts of a reporter, the reach of an independent media founder and years of relationships with the people shaping technology. Now, he can apply that experience to finding and supporting the next generation of founders.

      It is a fitting evolution for someone who has spent his career identifying important technology stories early.

      This time, he will have the opportunity to help write what happens next.

      Venture firms once competed primarily through capital, networks and operating expertise. Now, access to attention is becoming an asset of its own. Founders need help reaching customers and shaping public understanding, while investors want better ways to recognize which people and ideas will command that attention next.

      Sound Ventures hired someone who has spent a decade doing exactly that.

      Heath used to decide which technology stories were worth following.

      Now, he will help decide which ones get funded.

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

      🤝 Venture Deals

        LA Companies

        • Maven Robotics emerged from stealth with a $100M Series A and humanoid robots already operating in warehouse deployments. The company says its robots can work for 16 hours a day with 99% uptime and is positioning itself as a reliable alternative for businesses whose existing robotics providers fail to meet deployment targets. - learn more

        LA Venture Funds
        • Bedrock Capital participated in Mach Industries’ $600M Series C extension alongside Ribbit Capital, Infinite Capital and Sequoia, bringing the round’s total to $900M and doubling the defense startup’s valuation to $3.7B in three months. The Huntington Beach company manufactures lower-cost unmanned aircraft, strike weapons and counter-drone systems, while expanding into solid rocket motors and jet-engine production to address critical defense supply-chain bottlenecks. - learn more
        • U First Capital participated in Positron AI’s $875M funding round, which was co-led by NEA, Atreides Management, Valor Equity Partners, Andra Capital, SemiAnalysis Capital and Jim Clark, valuing the AI chip startup at $5B. Positron will use the capital to bring its memory-focused Asimov processor and Titan server system to market, offering an energy-efficient alternative to GPUs for running AI models. - learn more
        • WndrCo participated in Harvey’s $550M funding round, co-led by Diffusion and Lightspeed Venture Partners, valuing the legal AI company at $15.5B. Harvey will use the capital to expand its team and advance its AI platform, which helps law firms, in-house legal departments and professional-services organizations build and manage proprietary legal intelligence. - learn more
        • Nolan Capital participated in Encoded Therapeutics’ $275M Series F, which was co-led by GV and another healthcare-focused fund and included several new and returning investors. The biotech will use the capital to advance its lead gene therapy for Dravet syndrome through pivotal studies, expand its manufacturing capabilities and prepare another treatment for post-amputation nerve pain for clinical testing in 2027. - learn more
        • UP Partners led Overroute’s $5.5M seed round to expand its AI-powered freight execution platform for large trucking fleets and logistics operators. The company’s AI agents automate load monitoring, exception management and freight coordination, helping fleets respond to disruptions and keep shipments moving with less manual work. - learn more
        • Patron Fund participated in System’s $20M funding round alongside Will Ventures, Vine, Courtside, Daybreak, SV Angel and RiverPark Ventures. The San Francisco company will use the capital to expand its vertically integrated peptide platform, which connects patients with licensed clinicians and personalized treatments from U.S. compounding pharmacies while emphasizing testing, traceability and regulatory compliance. - learn more
        • Alpha Edison led Onix’s $5M pre-seed round, with participation from Garage Capital, Ride Home Fund and strategic investors including UTA co-founder Jeremy Zimmer and Real Ventures co-founder JS Cournoyer. The Montreal startup will use the funding to develop its private AI platform, onboard more specialists and prepare for a public launch, offering personalized guidance built exclusively from licensed expert knowledge rather than information scraped from the internet. - learn more
        • Rebel Fund participated in VideoGen’s $3.3M seed round alongside Y Combinator, Lobster Capital, Stretford End Capital, Mento VC, Pioneer Fund and Decacorn VC. The San Francisco startup, which has reached more than 5M users across 190 countries, will use the funding to expand its team and grow its AI platform for producing editable, copyright-free videos. - learn more

          Download the dot.LA App

          Who Gave the AI Access?

          🔦 Spotlight

          Happy Friday, Los Angeles.

          The newest employee in the office does not need a desk, a salary or a coffee order. But it may have access to your company’s emails, financial records, customer data and software systems.

          That raises a fairly important question: Who decides what an AI agent is allowed to do?

          El Segundo-based cybersecurity company Saviynt is building its next chapter around the answer.

          Carrick Capital Partners announced this week that it closed a $600M continuation vehicle for Saviynt, including a new $255M investment in the company. The transaction allowed Carrick’s existing investors to either take liquidity or remain invested, while also providing liquidity to Saviynt employees through a tender offer.

          Continuation vehicles are not exactly known for making gripping Friday reading. The company behind this one is considerably more interesting.

          Saviynt develops identity security software that helps businesses determine who can access their applications, data and infrastructure. Increasingly, however, “who” does not refer exclusively to a person.

          Companies are deploying AI agents that can retrieve information, write code, communicate with customers and complete multistep tasks with limited supervision. These digital workers need access to company systems to be useful, but every new permission also creates another opportunity for sensitive information to be exposed or an unintended action to be taken.

          In other words, AI agents may be tireless employees. They are not necessarily trustworthy ones.

          Saviynt is addressing that problem through Zuma, its platform for discovering, securing and governing AI agents, large language models and other nonhuman identities alongside a company’s human workforce. The goal is to give businesses one place to determine what every identity can access, whether it belongs to an employee, a contractor, a software application or an autonomous agent operating at machine speed.

          The opportunity appears to be growing quickly. Saviynt has surpassed $300M in annual recurring revenue, up from approximately $10M when Carrick first invested. The company says bookings have increased by more than 80% this year while customer retention remains at 96%.

          The new investment was completed as part of the final close of Saviynt’s previously announced $700M Series B, which valued the company at approximately $3B. Carrick’s continuation vehicle was led by Coller Capital and co-led by HSBC Asset Management, giving the investment firm more time and capital to remain behind one of its strongest-performing companies.

          For Saviynt, the funding will support further development of its identity platform, deeper integrations with major cloud and software providers and its push to become a central security layer for the agentic workplace.

          That ambition reflects a broader change taking place inside companies. The first wave of enterprise AI focused largely on what the technology could generate. The next phase is about what it can actually do, and whether businesses can maintain control once AI moves from answering questions to taking action.

          Saviynt is betting that identity will become the gatekeeper.

          AI agents are gaining access to the digital workplace, whether corporate security teams are ready for them or not.

          Someone still has to hold the keys.

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

          🤝 Venture Deals

            LA Venture Funds

            • Fulcrum Ventures participated in Critical Materials Group’s $10.3M seed round, led by Overmatch Ventures and joined by Victory Six Advisors. The Austin-based defense manufacturer will use the funding to develop and commission modular, automation-ready production systems designed to expand domestic manufacturing capacity for munitions and advanced energetic materials. - learn more
            • Fusion VC participated in Newlight’s $9M seed round alongside lomarlabs, BIRD Energy, Undeterred Capital and CiRi Ventures. The San Francisco-based maritime technology company recently demonstrated its hydrogen-hybrid retrofit on an 8,500-nautical-mile commercial voyage, reducing fuel consumption by 24% and carbon dioxide emissions by 28%. - learn more
            • Rebel Fund participated in Metal’s $4.5M seed round alongside a16z, Y Combinator, Gaingels, Indus Valley Capital, Phaze Ventures and Pioneer Fund. Metal will use the funding to build an AI-native operating system that helps founders identify relevant investors, manage outreach and automate other parts of the venture fundraising process. - learn more
            • UP.Partners participated in Reframe Systems’ $40M funding round, led by Energy Impact Partners and joined by Counterpart Ventures, E12 Ventures, Global Brain, Thin Line Capital and LACI Impact Fund. The homebuilding startup will use the capital to expand its network of robotics-powered microfactories, which it says can construct homes three times faster and at 35% lower cost than traditional methods. - learn more
            • Clocktower Technology Ventures participated in Sharpi’s $4M seed round, co-led by NXTP and ONEVC and joined by MAYA Capital. The Brazilian startup will use the funding to expand its team and develop autonomous AI agents that connect WhatsApp conversations with enterprise systems to automate B2B sales tasks such as order processing, customer follow-ups and demand generation. - learn more

            LA Exits

            • Extensiv, a California-based provider of warehouse management and fulfillment software, has been acquired by Descartes Systems Group for approximately $120M in cash. The acquisition adds Extensiv’s AI-enabled inventory, order, billing and omnichannel fulfillment tools to Descartes’ logistics network, strengthening its offerings for third-party logistics providers and ecommerce brands. - learn more
            • DocSolutionUSA has been acquired by Stewart Information Services alongside ProTitleUSA, adding mortgage document generation and automation capabilities to Stewart’s title services platform. The companies provide title, document and due diligence services for mortgage servicers, investors and capital markets clients; financial terms were not disclosed. - learn more
            • Fysh Foods, the Los Angeles-based plant-based seafood brand founded by creator and entrepreneur Zoya Biglary, has been acquired by City Roots Hospitality in an all-cash deal with undisclosed terms. City Roots plans to introduce Fysh Foods’ raw fish alternatives across its New York City restaurants and potentially expand the brand beyond the city as its restaurant portfolio grows - learn more

              Download the dot.LA App

              RELATEDEDITOR'S PICKS
              Trending