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
Observable Space Raises $90M to Build Beyond Rockets

🔦 Spotlight

Hello Los Angeles,

Space infrastructure is having a week.

Los Angeles-based Observable Space closed a $90M Series A and announced a $94M U.S. Space Force contract to scale its optical sensing and laser communications platforms. The round was led by Lux Capital and co-led by Upfront Ventures, Detroit Venture Partners, Island Green Capital and RTX Ventures, with participation from BRV Capital, Fathom Fund and Venrex.

Observable Space is building advanced optical systems across three areas: laser communications ground stations, ground-based optical sensing and in-space payloads. In simpler terms, the company is working on the infrastructure that helps satellites and spacecraft see, track, navigate and communicate more effectively.

Image Source: Observable Space

The Space Force contract gives Observable Space an early $22M in task orders under a larger $94M award to deploy mobile, off-grid optical sensing stations for space domain awareness. These systems are designed to help track objects in orbit with more resilient, lower-cost and geographically distributed ground infrastructure.

That matters because space is getting more crowded, more commercial and more strategically important. Satellites are no longer just sitting quietly above us handling GPS, weather and communications. They are becoming part of a much larger network for national security, AI, connectivity and future space-based infrastructure.

Observable Space’s work sits in the less flashy, but increasingly critical layer of the space economy. Rockets may get the liftoff footage, but the next phase of space competition will also depend on who can track what is in orbit, move data quickly and keep communications reliable from space to ground.

The company says its platform has already executed 2.6M automated tasks, identified more than 20M targets and completed 84,000 hours of continuous orbital monitoring. It is also expanding manufacturing across Detroit and Los Angeles, with spacecraft, engineering and design labs based in LA.

For Southern California’s space ecosystem, Observable Space adds another signal that the region’s advantage is not just launch. It is the full stack around space: optics, software, sensing, communications, payloads and the infrastructure needed to make orbit more usable.

Now onto this week’s LA venture deals, fund announcements and acquisitions.

🤝 Venture Deals

    LA Companies

    • Fragrance brand ’Ôrəbella closed a Series A growth equity investment led by Silas Capital, with participation from existing investor Celebrands, which incubated the brand. The funding will support global expansion, product innovation and retail growth as ’Ôrəbella scales beyond its Ulta Beauty base into international markets including Douglas, Selfridges and Ulta Beauty Middle East. The company also named Anish Agarwal, formerly CEO of T3 Micro, as CEO. - learn more
    • Ember LifeSciences added new strategic investments from Amgen Ventures and TDF Ventures, bringing its total Series A funding to $27M. The company makes reusable, temperature-controlled cold chain technology for transporting medicines and vaccines, and recently announced full commercial availability of its Ember Cube 2, which provides real-time monitoring and cloud-based tracking for healthcare logistics. Financial terms of the new investments were not disclosed. - learn more
    • Iconic raised $6M to build its AI-enabled M&A advisory platform for small business owners. The company combines AI software with human advisors to help owners sell businesses that are often too small for traditional investment banks to support, especially those valued under $20M. Iconic is aiming to modernize the small-business sale process as millions of baby boomer-owned businesses prepare to change hands. - learn more

    LA Venture Funds
    • Capital Group participated in Anthropic’s $65B Series H, which was led by Altimeter Capital, Dragoneer, Greenoaks and Sequoia Capital, valuing the company at $965B post-money. Anthropic said the new funding will support continued AI safety research, expanded compute capacity and broader product development as demand for Claude grows across enterprise customers and developers. - learn more
    • WndrCo participated in Reactor’s $59M seed and Series A funding, which was led by Lightspeed Venture Partners with backing from Amplify Partners, Sky9 Capital, FPV Ventures and others. San Francisco-based Reactor is building a developer platform for real-time generative video and “world models,” giving developers SDK and API access to create interactive AI applications across media and entertainment, physical AI and robotics. The company was co-founded by former Apple Vision Pro technical leads Alberto Taiuti and Bryce Schmidtchen, and WndrCo founding partner Jeffrey Katzenberg will join as a board observer. - learn more
    • Upfront Ventures led Kubera Health’s $6.5M seed round, with participation from Company Ventures, Dria Ventures and SemperVirens. Kubera is building a contract-to-payment system of record for healthcare, helping providers translate complex payer contracts into auditable payment logic so they can better identify underpayments, reimbursement gaps and administrative inefficiencies. The funding will support product development and growth as the company works to modernize healthcare’s payment infrastructure. - learn more
    • Sound Ventures participated in Polsia’s $30M round, alongside True Ventures, Offline Ventures, Adjacent, Tekton Ventures, Drysdale Ventures, VaynerFund and angel investors. Polsia is building an AI operations platform designed to run company workflows across coding, research, sales, customer support, ads and investor diligence, with founder Ben Cera saying the company is approaching $10M in annual run rate with one founder and no employees. The round valued Polsia at $250M. - learn more
    • Blue Bear Capital participated in Lastwall’s $16M Series A extension, which was led by BDC Capital’s StrongNorth Fund, with additional backing from New Brunswick Innovation Foundation, Frostbite Capital, BlueWing Ventures and 18West. Fredericton-based Lastwall builds identity-first, quantum-resilient cybersecurity software for defense, government and critical infrastructure environments, with the funding going toward expanded deployment across North American municipal utilities, defense infrastructure and public sector cloud portals. - learn more
    • Upfront Ventures participated in Itera’s $12M seed round, alongside Costanoa Ventures and Colle Capital, as the deep tech company emerged from stealth with its real-time electronics prototyping platform. Itera has developed a fluid circuit board that uses glass and liquid metal to let engineers rewire and test real electronic designs in under a minute, aiming to cut traditional PCB prototyping cycles from weeks to days. The funding will support the launch and commercialization of its first product. - learn more
    • Rebel Fund participated in Didit’s $7.5M seed financing, alongside Y Combinator, Pioneer Fund, Orange Collective, Founders Future, Phosphor Capital, SaaSholic and angel investors including Tomer London and Taro Fukuyama. San Francisco-based Didit is building AI-native identity and fraud infrastructure for verifying people, businesses, wallets, transactions and AI agents, with the new funding going toward global go-to-market growth, product expansion and hiring across sales and customer success. - learn more
    • Fifth Wall participated in NavigateAI’s $25M seed round, which was led by Elad Gil and backed by investors including Khosla Ventures, Lennar, Tishman Speyer and Helix Electric. Founded by Opendoor co-founder Eric Wu, NavigateAI is building an AI coach for construction workers that helps answer job-site questions, troubleshoot issues and improve field productivity across construction teams. - learn more
    • Strong Ventures participated in K-Zone’s 6.3B won Series B, alongside TimeWorks Investment, BonAngels Venture Partners and Singapore-based Guardian Fund. K-Zone is building a global reverse logistics platform for returned, overstocked and obsolete inventory, using its REMEX platform and AI agents to automate buyer matching, deal proposals, sales workflows and market analysis as it expands further into the U.S. market. - learn more

    LA Exits

    • Comscore Movies, the box office data business used by studios and exhibitors to track theatrical performance, was acquired by Advaya Capital in a $70M cash deal. The business will be renamed Rentrak, reviving the brand Comscore acquired in 2016, and former Paramount domestic distribution chief Chris Aronson will join the board. - learn more

      Download the dot.LA App

      From Rocket Motors to Consumer AI

      🔦 Spotlight

      Happy Friday,

      This week, one company moved deeper into rocket propulsion while another pushed further into consumer AI. Different industries, different stakes, same underlying shift: technology is moving further into the infrastructure of defense and entertainment.

      In defense, Mach Industries acquired Exquadrum, a 24-year-old rocket and propulsion company based in Victorville. The deal was worth $50M in cash and equity and brings Exquadrum’s IP, facilities, business lines and 85 employees into Mach’s operation.

      Mach, based in Huntington Beach, has raised nearly $200M and is building autonomous aircraft and weapons systems. Exquadrum gives the company deeper control over solid rocket motors, propulsion testing and one of the more constrained parts of the defense supply chain. The company will now operate as Mach Energetics.

      For companies building unmanned systems, hypersonics and missile-defense technology, the hard parts are still very physical: propulsion, testing, manufacturing and production capacity. Mach’s deal shows how much of the defense tech race now depends on owning more of that stack.

      In entertainment, Paramount brought in former Google executive Barak Turovsky as EVP and Head of Consumer AI. In his LinkedIn post announcing the move, Turovsky said AI is beginning to reshape how consumers discover, engage with and experience content, especially across platforms like Paramount+ and Pluto TV.

      The hire comes as Paramount pushes deeper into AI, product and streaming technology under David Ellison. It also reflects a broader shift in Hollywood: studios are no longer just competing on content libraries. They are competing on discovery, personalization, engagement and the consumer experience around that content.

      The common thread is infrastructure. In defense, that means propulsion, testing and supply chain control. In entertainment, it means AI, product leadership and smarter consumer platforms. Both stories show how quickly traditional industries are becoming more technical, more integrated and more dependent on teams that can modernize the systems underneath them.

      Now onto this week’s LA venture deals, fund announcements and acquisitions.

      🤝 Venture Deals

        LA Companies

        • Clouted raised a $7M seed round led by Slow Ventures, with participation from Gold House Ventures, Weekend Fund, LINE-Yahoo’s Z VC, Gondor Capital, Iterative, AppWorks, Peak XV’s Surge and a16z Speedrun. The company is building a “Distribution Intelligence” platform that uses AI agents to help consumer and entertainment brands plan, execute and optimize viral marketing campaigns across UGC, clipping, fan pages, influencer seeding, paid ads and social platforms. Clouted says the new funding will support its AI infrastructure, creator network growth and expansion into gaming and streaming. - learn more
        • El Segundo-based Amca raised a $300M Series B led by Caffeinated Capital, with major participation from Lightspeed Venture Partners and continued backing from Andreessen Horowitz, Lux Capital, Construct Capital and House Capital, valuing the aerospace and defense manufacturer at more than $1B. The company builds critical aerospace and defense components by combining engineering, qualification testing, technical data and certified manufacturing into one platform, and plans to use the funding to expand its AI-powered RAPID system, acquire and build more factories nationwide and increase production capacity for major defense and aviation customers. - learn more
        • Kin Health raised a $9M seed round led by Maveron, with participation from Town Hall Ventures, Eniac Ventures, Flex Capital, Foundry Square Capital, Pear VC, The Family Fund and several individual investors, including GoodRx co-founders Doug Hirsch and Trevor Bezdek. The company is building a free AI-powered notetaker for healthcare visits that records appointments and turns them into plain-language summaries, next steps and shareable context for patients and caregivers. - learn more

        LA Venture Funds
        • Clocktower Technology Ventures participated in Robbin’s $8M seed round, which was co-led by Canary, Atlântico and Caravela, with additional backing from AB Seed, Norte Ventures and Tomorrow Capital. Brazil-based Robbin is building an AI-native B2B payments and credit platform that lets large industrial companies offer co-branded virtual cards and credit products to retailer networks, using Pix rails instead of traditional card networks. The company also structured a separate $100M FIDC credit facility with Augme, an XP Investimentos asset manager, to finance retailer purchases through the platform. - learn more
        • Upfront Ventures led CVRD Health’s $5M seed round, joined by Waterline Ventures and Distributed Ventures. CVRD helps government contractors manage employee benefits, fringe-dollar compliance and audit readiness under Service Contract Act and Davis-Bacon requirements, with the funding going toward platform development, compliance and member advocacy teams, and national expansion across federal contractors. - learn more
        • Sum VC participated in Hellbender’s $12.5M seed round, which was co-led by Magarac Venture Partners and Veredas Partners, with additional backing from Mana Ventures, Gaingels and the Active Angels Network. Pittsburgh-based Hellbender builds physical AI infrastructure and edge computer vision systems for autonomous and industrial applications, with the new funding going toward launching its on-edge AI camera line, expanding product and growth teams, and scaling domestic hardware manufacturing. - learn more
        • Rebel Ventures participated in Leadbay’s $4.2M seed round, alongside Y Combinator, Roosh Ventures, Inovexus Ventures, TS Ventures, Alumni Ventures, Bright Ventures, Transpose Platform, Deel Ventures and founders and executives from Deel, Gusto and Pennylane. San Francisco-based Leadbay is building an AI-powered sales intelligence platform that helps sales teams discover and qualify small and mid-sized businesses with little or no digital footprint, especially in data-scarce sectors like construction, hospitality, manufacturing, retail and B2B services. The funding will support its U.S. go-to-market expansion in San Francisco, AI research partnership with Sorbonne University and engineering growth. - learn more
        • Overture Ventures participated in Recheck’s $2M pre-seed round, alongside ReGen Ventures, Jetstream and MCJ. Recheck is a trust and compliance platform for residential solar that verifies sales reps, assigns portable Recheck IDs and has now launched Recheck Certified, a credential that combines ethical sales training, a code of conduct, background checks and ongoing monitoring to help installers and finance companies identify trustworthy sales professionals. Since launching, the company says it has verified more than 50,000 sales reps and 700 installers and dealers. - learn more
        • CIV co-led Calibre’s $3.3M pre-seed round alongside Vicus Ventures, with participation from I2BF Global Ventures, 9Yards Capital, Jigeum and angel investors including Nikesh Arora. London-based Calibre is building AI infrastructure for the testing, inspection and certification industry, helping automate certification workflows that still depend heavily on manual audits and document review across regulated sectors. - learn more

        LA Exits

        • 32 Flavors, the production company founded by Alex Baskin and known for unscripted franchises including Vanderpump Rules, The Real Housewives of Beverly Hills, The Real Housewives of Orange County and The Valley, was acquired by Sony Pictures Television, which took a majority stake in the company. Baskin will remain CEO, and the deal expands Sony’s premium nonfiction portfolio while keeping 32 Flavors’ existing leadership team in place. - learn more

          Download the dot.LA App

          Heaviside Raises $28M for Autonomous Precision Munitions

          🔦 Spotlight

          Hey Los Angeles,

          For years, Southern California’s defense tech story has largely been told through satellites, rockets, drones and software. This week, another category stepped into the frame: autonomous precision munitions.

          Los Angeles-based Heaviside Industries emerged from stealth with a $28M Series A led by Interlagos, with participation from Menlo Ventures, Flume Ventures, Cantos, Anorak Ventures and several individual defense and technology investors. The company, founded in 2024, is building autonomous precision munitions for U.S. and allied special operations and conventional forces.

          The round will help Heaviside accelerate development, production and delivery of its multi-domain munitions platforms, including its first aerial and underwater systems. According to the company, its products are designed to operate in jammed and GPS-denied environments, where legacy systems can degrade or fail.

          That detail matters. Modern warfare has been reshaped by unmanned systems, contested communications and the growing need for weapons that are not only precise, but affordable enough to be produced and deployed at scale. In other words, the defense tech race is not just about building more advanced systems. It is about building systems that can actually survive the battlefield they are designed for.

          Heaviside has been operating in stealth for more than two years and says it has built a team of more than 50 engineers and operators across Los Angeles and Oslo, Norway. The company also says it already has a roster of U.S. and allied customers, with the new funding going toward expanding production and accelerating deliveries domestically and abroad.

          For LA’s hard tech ecosystem, Heaviside adds to a growing defense-tech cluster that is less about splashy software and more about applied engineering. The company’s work sits at the intersection of autonomy, manufacturing and national security, where Southern California’s aerospace and robotics talent has become increasingly relevant.

          Now onto this week’s LA venture deals and fund announcements.


          🤝 Venture Deals

            LA Companies

            • Furientis emerged from stealth with a $5M pre-seed led by Silent Ventures, with participation from Bessemer Venture Partners, SV Angel and other investors. Founded in 2025, the defense technology startup is developing cost-effective, ship-based interceptor systems designed for scalable production, with the funding going toward initial production, expanded testing and hiring across engineering, manufacturing and operations. - learn more
            • Rogue raised a $2.5M pre-seed led by Science Inc., with participation from Uncommon VC, Simple Food Ventures and strategic investors, to accelerate its national retail and digital commerce strategy. Built by the team behind Dollar Shave Club and Liquid Death, Rogue makes high-protein chips and puffs with active probiotics, no seed oils and no artificial ingredients, and will launch in 2,800 Walmart stores nationwide in July. - learn more
            • Develo raised $14M led by Blueprint Equity, with participation from Villain Capital, Z21 Ventures and Bienville Capital, to grow its AI-native operating system for pediatric practices. The platform unifies clinical, billing and family engagement workflows beyond the traditional EMR, with the new capital going toward R&D and customer success as Develo expands across pediatric providers nationwide. - learn more
            LA Venture Funds
            • Kinship Ventures participated in Nectar Social’s $30M Series A, which was led by Menlo Ventures and its Anthology Fund, with participation from True Ventures and GV. Nectar Social is building an agentic social operating system for modern marketing, helping brands manage social intelligence, community engagement, creator workflows and conversational commerce across platforms like Meta, TikTok, LinkedIn, Reddit and X. The new funding will support engineering and applied AI hiring, deepen platform partnerships and expand Nectar Agent into more brand workflows. - learn more
            • Alexandria Venture Investments participated in CREATE Medicines’ $122M Series B, which was co-led by existing investors Newpath Partners, ARCH Venture Partners and Hatteras Venture Partners. The Cambridge-based biotech is developing in vivo CAR therapies for autoimmune disease and oncology using an mRNA-LNP platform that engineers immune cells directly inside the body, with the funding going toward advancing its CD19-targeted autoimmune program into the clinic, expanding its dual CAR CD19 x BCMA program and continuing work across its oncology pipeline. - learn more
            • Overture Ventures participated in GridCARE’s $64M Series A, which was led by Sutter Hill Ventures with backing from John Doerr, National Grid Partners, Future Energy Ventures, Emerson Collective, Stanford University and other existing investors. Redwood City-based GridCARE is building a physics-based AI platform that helps identify underused grid capacity and accelerate power delivery for AI data centers, compressing interconnection timelines from years to months. The company says it is already engaged in projects across more than a dozen markets representing more than 2 GW of new AI compute capacity. - learn more
            • Taste Tomorrow Ventures invested in Harken Sweets’ seed round, joining Selva and GRTSHT as the early-stage VC firm continues backing better-for-you snack brands. Founded by Katie Lefkowitz, Harken Sweets makes cleaner-label chocolate bars sweetened with whole-food dates instead of refined sugar or synthetic alternatives, and is already sold through retailers including Sprouts, Whole Foods, Kroger, Costco, Walmart, Albertsons and Wegmans. - learn more
            • Bonfire Ventures led Ranger AI’s $8.4M seed round, with participation from 25madison, Inovia Capital and Panache Ventures. Ranger AI is building an agentic revenue operations platform for industrial tendering, helping industrial, manufacturing and supply chain companies automate complex RFP, bid and project workflows. The company says its platform is already being used across more than 1,000 projects and can cut industrial tendering time by up to 50%. - learn more
            • Fika Ventures participated in Outmarket AI’s $17M Series A, which was led by Permanent Capital Ventures, with participation from SignalFire, TTV Capital, Dash Fund and senior insurance industry executives. Outmarket AI builds AI workflow software for insurance agencies and brokers, helping teams automate policy reviews, quote comparisons, renewals, coverage gap analysis, proposal building and other core workflows. The round brings the company’s total funding to $21.7M. - learn more
            • Wedbush Ventures participated in Secludy’s $4M seed round, which was led by Impression Ventures and also included LAUNCH, The Syndicate, Precursor Ventures, Hustle Fund, Script Capital, Mana Ventures and Chispa VC. San Francisco-based Secludy helps banks, payments firms and fintech companies safely use proprietary customer data to train and evaluate GenAI models by generating privacy-protected synthetic data, with the funding going toward hiring, go-to-market growth and expanding its platform across more enterprise AI workflows. - learn more
            • Sound Ventures led a new $17M funding round for Anomaly Insights, joined by Alumni Ventures and existing investors Link Ventures, Redesign Health and RRE Ventures. The New York-based company uses AI to help health systems analyze payer behavior, identify denials, underpayments and contract issues, and strengthen how providers engage with insurers across claims management and managed care negotiations. The new funding brings Anomaly’s total raised to $34M. - learn more
            • B Capital and UP.Partners participated in Havoc’s $100M Series A, backing the company’s push to scale its all-domain autonomous systems for defense operations. Havoc’s autonomy stack is designed to operate across air, sea and land platforms, and the new funding brings its total capital raised to nearly $200M as it expands deployment capacity, engineering and partnerships with defense manufacturers. - learn more
            • B Capital led Star Catcher’s oversubscribed $65M Series A, with the round co-led by Shield Capital and Cerberus Ventures. The Florida-based company is building what it calls the first power grid in space, using optical power beaming to deliver electricity on demand to satellites and other spacecraft, with the funding going toward orbital demonstrations, engineering and commercial expansion. The round brings Star Catcher’s total funding to $88M. - learn more
            • Interlagos participated in Cowboy Space Corporation’s $275M Series B, which was led by Index Ventures and valued the company at $2B. Formerly known as Aetherflux, the San Carlos-based company is building vertically integrated orbital infrastructure for the AI era, including low-Earth orbit satellites, purpose-built launch vehicles and in-orbit data centers designed to help meet rising demand for AI compute. - learn more

              Download the dot.LA App

              RELATEDEDITOR'S PICKS
              Trending