
Get in the KNOW
on LA Startups & Tech
XRental Startup PocketList's Rapid Rise and Fall
Francesca Billington is a freelance reporter. Prior to that, she was a general assignment reporter for dot.LA and has also reported for KCRW, the Santa Monica Daily Press and local publications in New Jersey. She graduated from Princeton in 2019 with a degree in anthropology.

Armed with nearly $3 million, a list of prominent investors and tens of thousands of users, the apartment rental platform PocketList looked like a startup poised to take off.
CEO and co-founder Nick Dazé touted the proptech software that let potential renters get an inside peek at apartments before being listed as technology that "turned the entire rental market on its head." He sold it as a way for landlords to save billions of dollars by cutting down turnover time between tenants and assured renters access to honest, up-to-date information about units before they went online.
Investors — who poured a record amount of money into seed startups last year — hardly needed convincing. Dazé closed a $2.8 million seed round last April led by David Sacks' Craft Ventures.
"It's no surprise that renters have flocked to the service," said angel investor Spencer Rascoff, co-founder of Zillow and dot.LA, in announcing the raise.
By July, PocketList had unveiled the app in Los Angeles with plans to launch in San Francisco and San Diego by the fall. Seattle, Chicago and New York were next.
Users could rate apartment features like natural lighting and parking in the neighborhood. There was a question and answer page for past tenants to field concerns and a chat function for landlords and prospective renters. The idea was to make renters feel like they had unvarnished insight into a unit, much the way Yelp lets users rate restaurants.
But the rollouts in new cities never came. Even before PocketList went live, renters across the country stopped signing new leases as the pandemic cast a pall over the economy. Landlords — now navigating eviction moratoriums and mounting bills — didn't have the money or the inclination to spend on new apps, Dazé said.
In the last week of April, the CEO and his co-founder Julian Vergel de Dios gave notice to eight remote employees and around 20 investors that the company would be closing operations for good.
"I spent from February until last week fundraising," Dazé told dot.LA during the first week of May. "The ultimate pause of us beginning to wind things down is that we struck out on fundraising and few very, very large customer deals we've been working on for several months fell through."
Dazé attributed PocketList's undoing to the declining renters' market and a reeling economy that kept many landlords from buying in. But in the world of venture deals, losses don't always mark the end of a company. It's the absence of investor faith.
"For a lot of seed investors, it's almost like buying lottery tickets," said UCLA Anderson School of Management professor Olav Sorenson.
"The odds of it paying off are low, but if it does pay off, you could make a lot of money," he said.
Investing capital in early-stage startups is risky and uncertain. It's nearly impossible to collect data on startups that fold given that most close shop quietly, according to Pitchbook spokesperson Kayla Gordon.
But, according to Sorenson, roughly half of all startups that raise seed money will close a Series A. The seed round supplies entrepreneurs with enough money to prove to investors their business can be successful.
That metric of success depends on investors. Most venture-backed companies in this stage don't turn a profit, but some can show enough potential for growth to entice investors back.
The Pandemic and Proptech
Investors' appetite for early-stage startups waned a bit last year, with these riskier companies pulling in $44 billion in capital compared to $47.1 billion in 2019, according to Pitchbook data.
It was a particularly rough year for proptech companies. The industry was hit harder than other parts of tech, such as ecommerce, which flourished during the pandemic as consumers moved online. Venture investments in real estate technology companies plummeted by half to $9.1 billion globally in 2020 compared to 2019, according to Pitchbook.
Most of that drop off came from flexible and co-working office spaces, said Pitchbook analyst Zane Carmean. The stay-at-home economy dried up demand for office rentals.
"A lot of that has to do with the fact that WeWork required a large injection of capital from Softbank and core investors after the failed IPO in 2019," Carmean said by email.
Other real estate tech startups kept their footing. Carmean pointed to a boom in housing demand from young coastal workers moving to the Midwest, South and Mountain West as remote working took hold.
Inside other real estate companies, though, research and development teams were the first to cut spending, said Marcelino Diaz, an analyst focused on proptech at Plug and Play Ventures. With the market dwindling, they didn't have spare cash to experiment with new technologies.
Instead, they were spending on tech that played into pandemic needs.
"Offices and retail were looking at how startups could come to help with sanitization, space optimization and most importantly, social distancing," Diaz said.
Investors backed startups like L.A.-based OpenPath for its touchless entry systems designed to reduce face-to-face contact inside office buildings and elevators. Diaz's firm invested in virtual and augmented reality startups like Avatour and Giraffe360, whose camera devices and software helped real estate managers move tours online. And he kept an eye on startups whose UV light technology promised cleaner, disinfected commercial spaces.
"It was a pivot in terms of where investments went," he said.
PocketList's founders anticipated their app would carve out its own spot in the changing market. But the demand for rental units in coastal cities — the platform's target audience — was shaky.
Pitching the Platform
In 2018, Dazé and Vergel de Dios were coming off 86 venture rejections for their startup Block, a Chrome extension for apartment hunters to sort and share listings with roommates. Dazé admitted the concept was tricky to explain, which he said, is "probably why it didn't work."
They scrapped the software and built a new prototype each month until landing on the idea for PocketList in July of 2019. In the early days, the co-founders operated the service manually through Google Forms and email, matching renters eyeing apartments in each other's neighborhoods.
"I was on my computer 24/7, three-year-old daughter climbing on my back," said Dazé, who was also consulting for Clutter, a storage and moving startup with offices in L.A. "You make it work."
Eventually, he told Clutter's CEO, Ari Mir, he was quitting the job to build his company full time. He asked Dazé for a demo and quickly became PocketList's first investor in its pre-seed round.
"Basically we raised about a million bucks that weekend," Dazé said.
Mir's investment "got the ball rolling" and a few investors who turned down the pitch for Block even chipped in. The pair soon pulled in a new roster of investors for a seed round about six months later: Abstract VC, Wonder Ventures and angel investor Rascoff.
User sign-ups and engagement had been almost doubling month over month and at its height, about 75,000 renters used the app. The platform was free for renters, instead relying on landlords to pay a fee to receive notifications about how often users listed their properties.
But by the time their funding round closed, it was mid-April of 2020 and the economy largely shut down as stay-at-home orders tightened.
"An incredibly prominent investor of ours who has a large audience — a day after lockdown — called me and scared the shit out of me," said Dazé. "He's like 'You need to batten down the hatches.'"
Dazé terminated the company's office lease in Playa Vista and cancelled software subscriptions. He cut monthly spending back by 30% without laying off a single employee.
"If we hadn't done that, we may have ultimately failed earlier," he said.
The company scrambled. It introduced paid features like instant messaging (which later became free) and experimented with new pricing models for landlords. Despite the changes, Dazé said, "every single interaction in our platform slowed down a lot."
He made the call to close the business after a series of rejections for his next funding round. A few undisclosed customers also pulled out of expected deals. On April 29, he and Vergel de Dios broke the news to their eight employees during a Zoom meeting. That afternoon, they emailed investors.
Craft Ventures and Wonder Ventures could not be reached for comment.
"Our bank account isn't at zero," Dazé said. "We're not shutting down shop in a panic because we're running out of money, but there's not enough money for us to do anything dramatic like pivot the company."
Though he would not disclose how much capital remains, Dazé told investors "not to expect anything" back. He'll distribute whatever remains based on the amount each investor contributed.
The CEO was tight lipped about his next moves, but hinted at a potential deal that may acquire the company's software. And he's confident new companies — if not members of his own team — will try their hand at a similar technology.
As for the proptech market, commercial real estate is already picking back up as companies forecast returning to the office. In L.A., leases hardly got cheaper over the past year.
"I consider this a timing issue, like most great failures," said Dazé.
He chalks most of it up to COVID-19. In a world without it, he said, "things would have turned out very differently."
Editor's note: An earlier version said Daze had been working for several weeks to strike a deal with customers, it in fact had been months. This article has also been updated to clarify the total amount raised.
Francesca Billington is a freelance reporter. Prior to that, she was a general assignment reporter for dot.LA and has also reported for KCRW, the Santa Monica Daily Press and local publications in New Jersey. She graduated from Princeton in 2019 with a degree in anthropology.
Subscribe to our newsletter to catch every headline.
Rivian Stock Roller Coaster Continues as Amazon Van Delivery Faces Delays
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.
Rivian’s stock lost 7% yesterday on the back of news that the company could face delays in fulfilling Amazon’s order for a fleet of electric delivery vans due to legal issues with a supplier. The electric vehicle maker is suing Commercial Vehicle Group (CVG) over a pricing dispute related to the seats that the supplier promised, according to the Wall Street Journal.
The legal issue could mean that Amazon may not receive their electric vans on time. The dispute hinges on whether or not Commercial Vehicle Group is allowed to raise the prices of its seats after Rivian made engineering and design changes to the original version. Rivian says the price hike from CVG violates the supply contract. CVG denies the claim.
Regardless, the dispute could hamper Rivian’s ability to deliver electric vans to Amazon on time. The ecommerce/streaming/cloud computing/AI megacorporation controls an 18% stake in Rivian as one of the company’s largest early investors. Amazon has previously said it hopes to buy 100,000 delivery vehicles from Rivian by 2030.
The stock plunge marked another wild turn for the EV manufacturer. Last week, Rivian shares dropped 21% on Monday after Ford, another early investor, announced its intent to sell 8 million shares. The next few days saw even further declines as virtually the entire market saw massive losses, but then Rivian rallied partially on the back of their earnings report on Wednesday, gaining 28% back by Friday. Then came yesterday’s 7% slide. Today the stock is up another 10%.
Hold on tight, who knows where we’re going next.
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.
Snapchat’s Attempt to Protect Young Users From Third-Party Apps Falls Short
Kristin Snyder is an editorial intern for dot.la. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.
Some Snap Kit platform developers have skirted guidelines meant to make the app safer for children.
A new report from TechCrunch released Tuesday found that some third-party apps that connect to users’ Snap accounts have not been updated according to new guidelines announced in March. The restrictions, which target anonymous messaging and friend-finding apps, are meant to increase child safety. However, the investigation found a number of apps either ignore the new regulations or falsely claim to be integrated with Snapchat.
The Santa Monica-based social media company announced the changes after facing two separate lawsuits related to teen suicide allegedly caused by the app. Over 1,500 developers integrate Snap features like the camera and Bitmojis. Snap originally claimed the update would not affect many apps.
Developers had 30 days to revise their software, but the investigation found that some apps, such as the anonymous Q&A app Sendit, were granted an extension. Others blatantly avoided the changes—the anonymous messaging app HMU, which is now meant for adult users, is still available to users "9+" in the App Store. Certain apps that have been banned from Snap, like Intext, still advertise Snapchat integration.
“First and foremost, we put the privacy and safety of our community first and expect the products built by our developer community to adhere to that standard in addition to bringing fun and positive experiences to people,” Director of Platform Partnerships Alston Cheek told TechCrunch.
The news is a blow to Snap’s recent efforts to cast itself as a responsible social media platform The company recently announced Colleen DeCourcy would take over as the company’s new chief creative officer and CEO Evan Spiegel to recently made a a generous personal donation to graduates of Otis College of Art and Design. The social media company currently faces a lawsuit from a teenager who claims it has not done enough to protect minors from sexual exploitation. In April, 44 attorney generals sent a letter to Snap and TikTok urging the companies to strengthen parental controls.
Lawmakers are considering new policies that would hold social media companies accountable for the content on their platforms. One such bill would require social media companies to share data with independent researchers.
Snapchat recently rolled out augmented reality shopping features and influencer-led original content to grow its younger base of users.
Snap Inc., Snapchat's parent company, is an investor in dot.LA.
Kristin Snyder is an editorial intern for dot.la. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.
When we list the attributes most associated with successful founders, investors, billionaires, and industry leaders, we often think of things like determination, grit, fortitude and even obsessiveness. The winners are the most relentless, the ones who work the hardest, know the most, start the earliest in the morning on four hours of sleep and won’t accept no for an answer.
While discussing the venture capital world, and his upcoming technology conference in Santa Monica, The Montgomery Summit 2022, March Capital co-founder and Managing Partner Jamie Montgomery doesn’t necessarily contradict this formula for success, but adds a new attribute to the mix that’s sometimes left out: curiosity.
Montgomery’s a believer that there’s no one right way to go about things, and no surefire process for success. Sometimes, the best company emerges from not just the best data and team but the most creative approach. “If something isn’t clear, invert,” Montgomery explained. “Then invert again. Soon the subject becomes clear.”
The best investors and leaders have an innate inquisitiveness about the world around them, and seek out opportunities not just based on market trends but genuine observations about problems in desperate need of solutions.
“You sort of have to be a very heuristical thinker,” Montgomery said. “Sometimes I find some people I talk to are very smart and interesting, and I think, “That person’s very thoughtful. They’re going to be a good investor.’ Sometimes you meet people and you think ‘Well, they come across smart, but they’re always preparing what they’re going to say in response to what you have to say, they’re not really listening.’ Being a good investor, you’ve got to be a good listener. You’ve got to figure out, what’s the signal and what’s the noise? Filter out the noise and say ‘What’s real?’”
Thoughtfulness, attentiveness and curiosity are typically the sort of attributes that we think of as innate, as opposed to skills you can improve via on-the-job training. Montgomery noted, “I always ask entrepreneurs why rather than what. You get a more interesting answer.” Reading and research and investigation can help, but innate curiosity remains an essential ingredient in business success.
“I think, to be an investor, not just a VC but an overall investor, one benefits from an incredible amount of reading and knowledge,” Montgomery explained. “You have to have a voracious appetite, so it’s really a high-level curiosity. Some people have it, some don’t.”
March Capital Founder Jamie Montgomery.
Illustration by Dilara Mundy
One subject that’s on Montgomery’s mind these days is quantum computing, and its potential impact on cybersecurity, a major area of focus for March. His process starts by asking core questions about the next 5-10 years and what they’ll look like, before even considering potential solutions.
“If you’re investing, you have to look at something that’s inevitable,” Montgomery explained. “Is it gonna happen or not. If it’s inevitable, then the question is, is it imminent? And is it investible? Start with inevitable. Eventually you’re going to have quantum computing, and that’s gonna create an existential threat to cybersecurity. Is that imminent?... What is the post-quantum cyber world like, with all this information that’s been siphoned out of America by China… what do they have and how do we prepare for a post-quantum cybersecurity? It’s almost existential.”
This holistic question-based approach also drives Montgomery as he plans and organizes the annual Montgomery Summit, the largest such event of the L.A. tech calendar year (Montgomery refers to it as the “Rose Bowl of Conferences.”)
He expects around 1,200 people to attend this year – the event’s big return post-pandemic – for panels and sessions that don’t just cover areas in which March Capital specializes, but a vast and diverse variety of subjects and topics, designed to intrigue and inspire curious minds.
Over 175 speakers in total have signed on for the 19th annual Montgomery Summit, to be held on May 24 and 25, from the worlds of technology, economics, geopolitics, public policy, the sciences and beyond. Montgomery gets animated as he tells me about the voluminous range of topics being covered, from the Federal Reserve’s response to inflation to the war in Ukraine to the stories behind companies like Bill.com and CrowdStrike. One session will feature Chapman University Presidential Fellow Jack Horner, one of the world’s leading paleontologists and a key inspiration for the “Jurassic Park” character Dr. Alan Grant.
“It’s the interaction, the entrepreneurs with the investors and the executives,” Montgomery told me. “It’s fantastic, it’s enjoyable, it’s fun, and it’s candid. There are no big egos. The speakers will actually come and talk to you, they don’t come in the back door and leave through the back door. You actually can go to any one of seven sessions, and it’s going to be interesting, and they’re all short. 25-45 minutes each.”
The shorter 25-45 minute sessions help to stave off boredom and mean that attendees can sample a wider range of subjects and sessions than they might at other conferences. It helps keep things moving and makes them fun, a theme Montgomery returned to a few times in our discussion.
“There’s a lot of conferences that are very professionally run or research-driven or they’re very commercial. People come here and they’re gonna have a blast, right?”
The Montgomery Summit runs May 24th-25th at Santa Monica's Fairmont Miramar Hotel & Bungalows. Find out more information on their website.
- The Montgomery Summit One Year After COVID Struck - dot.LA ›
- March Capital Scored a Billion Dollar Return on Crowdstrike - dot.LA ›
- March Capital's Jamie Montgomery on Philanthropy - dot.LA ›