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XOuter Furniture Startup Targets Multi-Billion Dollar Hospitality Industry
Samson Amore is a reporter for dot.LA. He previously covered technology and entertainment for TheWrap and reported on the SoCal startup scene for the Los Angeles Business Journal. Samson is also a proud member of the Transgender Journalists Association. Send tips or pitches to samsonamore@dot.la and find him on Twitter at @Samsonamore. Pronouns: he/him

It's no accident that this has been a banner year for direct-to-consumer furniture brand Outer. The Santa Monica startup co-founded by a former Pottery Barn designer seemed to emerge just as people were forced to stay home and its showroom concept seemed appropriately tailored to the social distanced demands of the pandemic world.
The company, which uses customer's backyards as a showroom for potential customers, is now looking to go beyond retail sales.
Outer CEO Jiake Liu said the company wants to furnish hotels, shopping malls and other businesses with their $95 throw pillows and outdoor sectional couches that retail at upwards of $9,000. And it's got some help. Outer announced on Thursday it raised a $50 million Series B round led by Chinese investor and Capital Today founder Kathy Xu.
"We're pretty excited to start testing the waters for working with hospitality groups: hotels, restaurants, and also shopping centers soon," Liu said.
The global outdoor furniture market topped $15.7 billion in 2020, and it's expected to grow 5.7% by 2027, according to a September report from Global Market Insights. The market was already on the rise before the pandemic, but like many industries, the coronavirus accelerated the existing growth trends.
Outer distinguishes itself from competitors like IKEA, Home Depot and Pottery Barn with their high-end eco-friendly designs inspired in part by co-founder and Chief Design Officer Terry Lin.
The company's wicker furniture, blankets and rugs are all made with recycled materials and Liu wants to use some of the Series B funds to invest heavily in making Outer's materials renewable.
A 2019 report from Grand View Research found that while residential purchases of outdoor furniture are still holding steady globally, the real growth is in the commercial sector. The report predicted explosive growth in commercial markets in Asia, including India and China, where Outer does its production at Liu's family-owned factory.
"The area that I'm from, there are a lot of master craftspeople that can actually weave rattan and this all weather wicker," Liu said. "It's a technique that we can't find that readily available in the U.S."
The facility isn't owned by Outer, but it's affected by its demand for sales. Liu said with the pandemic spurring customer demand, the production facility hired roughly 100 people in China over the past 18 months.
"I am really bullish about this marriage of Chinese supply chain and American design," Liu said despite the COVID-related supply chain disruptions that have delayed supply chains and bottle-necked the Los Angeles and Long Beach ports that it relies on.
Liu wants to use some of the Series B funds to invest heavily in making Outer's materials renewable. The company's wicker furniture, blankets and rugs are all made with recycled materials.
New investors Tribe Capital, C Ventures and Santa Monica-based Upfront Ventures joined the round, alongside participation from existing investors Santa Monica-based Mucker Capital, Marina Del Rey-based Mantis VC and Reimagined Ventures.
Outer co-founders Jiake Liu (left) and Terry Lin.
Since its launch in May 2019, the company has raised $65 million.
Liu says Outer's pricing reflects the supply chain and added that the production of its woven materials is difficult for Outer to do outside of China, where his family is from.
Another factor spurring Outer's growth is its unique model for showrooms. Instead of leasing costly real estate to operate a showroom, the company recruits existing customers who own their furniture to join its neighborhood showroom program. The furniture owners earn $50 per showing plus a 10% discount, and often network with people in their neighborhood to show off their new setups and encourage them to buy in.
"There is a huge influx of just customers, looking for anything for their yard" or outside spaces, Liu said. "There's never been this level of demand and it's largely catalyzed by the pandemic."
Linda Kruse is a member of the neighborhood showroom program. Kruse said she found Outer while looking for "gorgeous and interesting" furniture for her backyard in her new Woodland Hills home a couple years ago and was the third person to sign up for the home showroom program.
Kruse said beyond the designs and durability, the eco-friendly aspect of Outer was a selling point.
Outer counted 1,000 virtual showrooms across the country as of July. The company employs 70 people in its offices, but Liu said it'll use some Series B cash to hire more people and double its headcount by next year.
"The big selling feature was that they guaranteed their product for 10 years," Kruse said.
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Samson Amore is a reporter for dot.LA. He previously covered technology and entertainment for TheWrap and reported on the SoCal startup scene for the Los Angeles Business Journal. Samson is also a proud member of the Transgender Journalists Association. Send tips or pitches to samsonamore@dot.la and find him on Twitter at @Samsonamore. Pronouns: he/him
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Faraday Future Reveals Only 401 Pre-Orders For Its First Electric Car
David Shultz is a freelance writer who lives in Santa Barbara, California. His writing has appeared in The Atlantic, Outside and Nautilus, among other publications.
Electric vehicle hopeful Faraday Future has had no shortage of drama—from alleged securities law violations to boardroom shake-ups—on its long and circuitous path to actually producing a car. And though the Gardena-based company looked to have turned a corner by recently announcing plans to launch its first vehicle later this year, Faraday’s quarterly earnings report this week revealed that demand for that car has underwhelmed—to say the least.
Among the business updates and organizational changes disclosed in its first-quarter earnings release on Monday, the company tucked in one startling number: 401. That’s the number of paid pre-orders that Faraday said it had received for its first production vehicle, the FF 91, as of March 31.
The paltry number is especially interesting given the context of the automaker’s rocky history. Earlier this year, the publicly traded company found itself in hot water with the Securities and Exchange Commission, which is now investigating allegedly inaccurate and misleading statements made by Faraday to investors. Those statements, according to an internal review by the company, include misrepresenting how many pre-orders it had received for the FF 91: Originally, Faraday reported more than 14,000 reservations on its books, but it later emerged that an overwhelming bulk of those pre-orders were unpaid—with only a few hundred actual, paid deposits on the vehicles. (What’s more, nearly 80% of those pre-orders were allegedly from a single, undisclosed company that may have been an affiliate of Faraday’s, according to a blistering report by short-selling firm J Capital.)
Faraday’s earnings report also highlighted first-quarter developments including leadership moves, production partnerships and its unveiling of the first production-intent FF 91. The company noted that it had received a dealer and distributor license from the state of California that should allow Faraday to sell vehicles online anywhere in the U.S. It also signed a lease for a showroom in Beverly Hills, and is currently on the search for a second such location in the U.S. Additionally, Faraday Future’s second car, the FF 81, will be produced in South Korea in partnership with auto manufacturer Myoung Shin, with production slated to begin in 2024.
In terms of financials, Faraday reported an operating loss of approximately $149 million in the first quarter—up from a loss of $19 million in the same period last year. The company has $706 million in total assets on its balance sheet, including $276 million in cash. Faraday’s stock closed Wednesday’s trading at $3 per share—down roughly 50% since the start of this year.
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David Shultz is a freelance writer who lives in Santa Barbara, California. His writing has appeared in The Atlantic, Outside and Nautilus, among other publications.
Meet CropSafe, the Agtech Startup Helping Farmers Monitor Their Fields
David Shultz is a freelance writer who lives in Santa Barbara, California. His writing has appeared in The Atlantic, Outside and Nautilus, among other publications.
This January, John McElhone moved to Santa Monica from, as he described it, “a tiny farm in the absolute middle of nowhere” in his native Northern Ireland, with the goal of growing the crop-monitoring tech startup he founded.
It looks like McElhone’s big move is beginning to pay off: His company, CropSafe, announced a $3 million seed funding round on Tuesday that will help it develop and scale its remote crop-monitoring capabilities for farmers. Venture firm Elefund led the round and was joined by investors Foundation Capital, Global Founders Capital, V1.VC and Great Oaks Capital, as well as angel investors Cory Levy, Josh Browder and Charlie Songhurst. The capital will go toward growing CropSafe’s six-person engineering team and building up its new U.S. headquarters in Santa Monica.
The nascent agtech company began in 2019 as a project between McElhone and his co-founder and high school classmate, Micheál McLaughlin. Growing up in the Northern Irish countryside, the pair developed an interest in technology, which led to ideas about how such technology could aid the agricultural communities they were raised around.
“We noticed that there was a lot of really new, cool technology coming into the farming market at the time,” McElhone told dot.LA. “But every single farmer in our area hadn't a clue how to get started with all this new fancy technology, because they would have to go to training sessions or learn how satellite imagery from NASA works. And farmers—their job is to farm, not to interpret data.”
The first version of CropSafe’s software aimed to bridge that gap. At its core, the platform is an interpretation engine that scrapes and parses through troves of weather data and satellite imagery to find the information that farmers need to grow and harvest more effectively. “CropSafe did that work for you and spots useful nuggets like, ‘Hey, there's blight in field no. 14; here's the exact location and what you need to do next,’” McElhone explained.
But the project, which began simply as a tool for friends and family in Northern Ireland, started drawing attention from users around the world; to the founders’ surprise, people began offering to pay for the service. “That was kind of a turning point—realizing it wasn't just our 200 people that wanted to use it,” McElhone said. So he packed his bags and moved to Southern California at the start of this year to try to build out the software in one of agtech’s hottest markets.
McElhone and McLaughlin now believe there’s a better way forward that would position CropSafe as more akin to a fintech platform for farmers: Because the software collects so much data on farms, it can offer insights into removing bottlenecks that farmers could leverage to secure crucial financing for equipment and other needs.
“If a farm is leasing three combines this year, with the data we have on that farm [and its] crops, we might be able to say: ‘Hey, if you lease an additional combine this year, we know that you will produce so-and-so additional yield and produce $25,000,’” according to McElhone. In an ideal scenario, CropSafe could allow the financing for that combine to be approved instantly on the strength of the data on its platform; the farmer clicks a button on the app, and the combine gets delivered the next day.
So far, McElhone is tight-lipped about partnerships in this area of its business, but said announcements should be coming this summer. The company is also considering offering farmers insights into the best times and places to sell crops, with CropSafe taking a small cut of revenues for the service. (The idea is that farmers would only pay when they see increased sales from using CropSafe’s insights, McElhone said.)
But the move to Santa Monica has already proven fertile for the company, which is planning to announce partnerships with other agtech companies that would allow CropSafe to act more as an operating system—one connecting autonomous tractors, weathers sensors, and other “internet of things” technologies to ensure better, more sustainable crops. With local startups like Future Acres and Abundant Robotics already operating in the space, CropSafe seems poised to benefit from Southern California’s position as a hub for agtech in the U.S.
David Shultz is a freelance writer who lives in Santa Barbara, California. His writing has appeared in The Atlantic, Outside and Nautilus, among other publications.
Cedars Sinai Health Ventures’ Maureen Klewicki on How Tech Is Changing Health Care
On this episode of the LA Venture podcast, Cedars Sinai Health Ventures’ Maureen Klewicki talks about price transparency for health care, the labor shortage crisis and emerging payment models.
Klewicki got her start working in the venture capital industry as the program director at the Techstars Healthcare accelerator. She then spent five years working at L.A.-based venture firm Crosscut. At Cedars Sinai, she helps cut checks of between $1 million and $10 million from the venture firm’s $100 million fund.
“There's one million and one problems right now Cedars Sinai is facing,” Klewicki said. The fund is structured in part to focus on the long-term future of the health care industry, but about half of it is focused on the immediate problems that Cedars doctors and staff are facing.
To get an understanding of their pain points, Klewicki said she talks directly with leaders of departments from nursing to surgery, asking them: “‘What are you thinking about? Where do you need help? And where can we find a company that we can plug in right now?’”
The pandemic has taken a toll on health care workers, Klewicki said, exacerbating a huge nursing shortage and adding more trauma to an already overworked labor pool. But Klewicki also says that the labor force crisis could be a thesis for an entire fund.
“Could you solve it through the use of smart robotics? Could you solve it through computer vision? Could you solve it through ambient scribing?,” she asks. ”Can you do things that make it so that nurses aren't spending 30% of the time logging things into the EHR?”
Another crucial issue for Cedars: keeping the cost of care down. One strategy has been keeping patients out of the hospital if they don't need to be there, and making sure they have a range of services at home. There are a number of different solutions that are being developed toward that end, Klewicki said, from teams that are made up of both health care professionals and tech entrepreneurs.
“You might see a team that is half-Uber and half-health care execs,” she said. “And so that's where I think you start to see these really cool combinations of technologists and people that know health care really well.”
Klewecki said recent changes in how hospitals get reimbursed have incentivized startups that focus on a “value-based” health care model that focuses on preventative care.
“Because that overall care team approach is what keeps the cost of care down,” she said “And so you see a lot of movement from VC-backed and private equity-backed companies in the value-based care space because that's where the payment models are moving.”
That might mean setting up urgent care facilities in different neighborhoods, sending providers to aid patients at home or focusing more on telemedicine rather than bringing patients to hospitals.
Klewicki added, “If you do it right, you can have a very valuable company that is improving outcomes for patients.”
Click the link above to hear the full episode, and subscribe to LA Venture on Apple Podcasts, Stitcher, Spotify or wherever you get your podcasts.
dot.LA Engagement Fellow Joshua Letona contributed to this post.
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