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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.
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.
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.
Samson Amore is a reporter for dot.LA. He holds a degree in journalism from Emerson College. Send tips or pitches to samsonamore@dot.la and find him on Twitter @Samsonamore.
According to a Forbes report last April, both the viewership and dollars behind women’s sports at a collegiate and professional level are growing.
In 2022, the first 32 games of the NCAA tournament had record attendance levels, breaking records set back in 2004, and largely driven by the new and rapidly growing women’s NCAA tournament. WNBA openers this year saw a 21% spike in attendance, with some teams including the LA Sparks reporting triple-digit ticket sales growth, about 121% over 2022’s total. In 2023, the average size of an LA Sparks crowd swelled to 10,396 people, up from 4,701 people.
Women make up half the population, but “also 50% of the folks that are walking into the stadium at Dodger Stadium, or your NFL fans are just about 50% women,” noted Erin Storck, a panelist and senior analyst at Los Angeles-based Elysian Park Ventures.
Storck added that in heterosexual households, women generally manage most of the family’s money, giving them huge purchasing power, a potential advantage for female-run leagues. “There's an untapped revenue opportunity,” she noted.
In the soccer world, Los Angeles-based women’s soccer team Angel City FC has put in the work to become a household name, not just in LA County but across the nation. At an LA Tech Week panel hosted by Athlete Strategies about investing in sports, Angel City head of strategy and chief of staff Kari Fleischauer said that years before launching the women’s National Women’s Soccer League team, Angel City FC was pounding the pavement letting people know about the excitement ladies soccer can bring. She noted community is key, and that fostering a sense of engagement and safety at the team’s home venue, BMO stadium (formerly Banc of California Stadium), is one reason fans keep coming back.
Adding free metro rides to BMO stadium and private rooms for nursing fans to breastfeed or fans on the spectrum to avoid sensory overload, were just some of the ways ACFC tried to include its community in the concept of its stadium, Fleischauer said. She noted, though, that roughly 46% of Angel City fans are “straight white dudes hanging out with their bros.”
“Particularly [on] the woman's side, I'd like to think we do a better job of making sure that there's spaces for everyone,” Fleischauer told the audience. “One thing we realize is accessibility is a huge thing.”
Samson Amore is a reporter for dot.LA. He holds a degree in journalism from Emerson College. Send tips or pitches to samsonamore@dot.la and find him on Twitter @Samsonamore.
L.A. Tech Week has brought venture capitalists, founders and entrepreneurs from around the world to the California coast. With so many tech nerds in one place, it's easy to laugh, joke and reminisce about the future of tech in SoCal.
Here's what people are saying about the fifth day of L.A. Tech Week on social:
#LATechWeek has been on 🔥🔥🔥. Yes the events are super cool at amazing venues. But, I’m blown away by the people. I’ve met so many founders building generative AI companies from the ground up. I’m so bullish on LA right now🥳. LA is for builders #longLA
Thanks @rpnickson 📸 pic.twitter.com/B6rT2jJYIs
— Dr. Kelly O'Brien (@Kvo2013) June 8, 2023
Successful LatinxVC Avanza Summit 2023 in LA! It’s been an amazing few days near the beach w great company. Thank you to our panelists & participants.
Huge thanks to our incredible sponsors SVB, Chavez Family Foundation, Annenberg Foundation, PledgeLA, Fenwick & West, Countsy! pic.twitter.com/oVuGIgFurk
— LatinxVC (@LatinxVCs) June 9, 2023
30+ gaming startups presented at the A16z Speedrun Demo Day in LA yesterday. Great thanks to the @a16zGames team for an awesome day of events! #LATechWeek pic.twitter.com/DKq8IFo5QZ
— Grace Zhou (@graceminzhou) June 9, 2023
📣🤩 What’s the buzz? It’s #LATechWeek from @TechstarsLA & @TechstarsHealth joint demo day with the #Techstar HC team where our @fyelabs founder/CEO Suvojit Ghosh mentored both cohorts! #TechStars demo day highlighted 12 amazing emerging #startups in #healthtech #innovation. 🩺 pic.twitter.com/0RXClCtfDQ
— FYELABS (@fyelabs) June 9, 2023
Another successful Coffee On Slauson in the books for #LATechWeek.
Special thanks to the good people at Pledge LA, SVB and @GundersonLaw for the ongoing support and the @findyourhilltop staff for providing the space, eats & vibes. ♻️ pic.twitter.com/51cMDoEn30
— Slauson & Co. (@SlausonAndCo) June 9, 2023
The perfect combo to start #LATechWeek Day 5: pastries, coffee, and great convos with industry founders ✨
Fireside chats with @enriquealle, @wp, and @robynpark pic.twitter.com/booYPdekVV
— Tech Week (@Techweek_) June 9, 2023
Of course @designerfund has the most amazing pastries at their event. #LATechWeek pic.twitter.com/PjyWlGTQI4
— Jesse Pickard (@jessepickard) June 9, 2023
My favorite event from @Techweek_ has to be "Modern Storytelling & Business Building." Hosted by @STHoward #LATechWeek pic.twitter.com/SV1eexMJ4k
— JonnyZeller (@JonnyZeller) June 9, 2023
And the finale of the night was courtesy of the one and only @zedd for an unforgettable end to the "City of Games" party! Hosted by @a16zGames and @100Thieves #LATechWeek pic.twitter.com/hliI9yLKse
— Tech Week (@Techweek_) June 9, 2023
Excited to be at the @a16zGames Speedrun Demo Day! Loved the energy and excitement from the companies that pitched there. It was also great to see @Tocelot and @ndrewlee at this amazing #LATechWeek event pic.twitter.com/NfLQO5lR27
— Andy Lee | andypwlee.bit (@andypwlee) June 9, 2023
Thank you to everyone who joined the Sony Venture Fund US team at #LATechWeek for our screening of Spider-Man: Across the Spider-Verse. Last summer, we started building a presence in LA. Today, it's exciting to host such an event with the @Sony family and the LA VC community. pic.twitter.com/wdDm6qtHdL
— Sony Innovation Fund (@Sony_Innov_Fund) June 9, 2023
Time to eat, connect and build while @remi_rodney provided the vibes. 🙏🏽#LATechWeek @BuildOnBase @developer_dao @WeAreRazorfish pic.twitter.com/QIPh1gjvoA
— Hola Metaverso-Blockchain & New Web Tech Events 🎪 (@holametaverso) June 9, 2023
@Lux_Capital at #LATechWeek advancing the impossible to inevitable, from..
..defense primes partnering with cutting edge defense tech startups, to..
..hardware x LLMs improving mental health.
From the rich and diverse LA ecosystem stems generational companies: pic.twitter.com/v5S5r8JtbU
— Shahin Farshchi (@Farshchi) June 9, 2023
LA Tech Week has been a blast! Met some amazing creators, founders and investors from all over the world! #LATechWeek pic.twitter.com/AAh9JFELhe
— Chris Germano (@netslayer) June 9, 2023
Had such a blast at LA Tech Week and hosting events for @brexHQ
Top highlights were collabing with @pulley on an Emerging Managers / Founder mixer at the @poplco House, rooftop event in Venice, creator panel with @thechangj & proper Korean food with in KTown.
Exhausted is an… pic.twitter.com/mGQnSYGPdg
— Τyler Robinson (@TyyRob3) June 9, 2023
Did you have fun at @sophiaamoruso’s launch party for @trustfundvc? #LATechWeek pic.twitter.com/gbrbXRQ9Xx
— Kay (@KaySnels) June 9, 2023
y00tilty in every city with @KaylaLor3n & @cryptochrisg813.
Welcome to the LA @y00tsNFT fam! #LATechWeek #3XP week. pic.twitter.com/6wWKlsTacx
— VanG0xH (@CryptoVanGoghs) June 9, 2023
Really enjoyed #LATechWeek. Here are some observations I made 👇
— s.personal.ai (Suman Kanuganti) (@SumanPersonalAI) June 9, 2023
Thank you @TheKofiAmpadu for including me in #demoday with the latest @a16ztxo cohort! It was a real full circle moment to witness the brilliance of both @ChrisLyons & @ZMuse_ & #PledgeLA very own. She’s why we’re #LongLA 🚀💕 #LAtechweek pic.twitter.com/itkKXMxQRb
— Qiana Qiana! (@Q_i_a_n_a) June 9, 2023
@upfrontvc Gaming Founders Podcast #iLOVELA #LATechWeek @Techweek_ @KatiaAmeri @mucker @fikavc @bonfire_vc @TenOne10 @WatertowerGroup @ganasvc @IAmRobRyan @john_at_stonks @eva_ho @dereknorton pic.twitter.com/LCbaGXCoW7
— Sean Goldfaden (@seangoldfaden) June 9, 2023
Hosts Kevin Zhang, Partner at @upfrontvc, and Eden Chen, CEO of @pragmaplatform, interviewed two special guests from @raidbaseinc Stephen Lim, Co-Founder & Product Director, and Trevor Romleski, Co-Founder & Game Director. 🎙 #LATechWeek pic.twitter.com/hxHEAoELZ6
— Tech Week (@Techweek_) June 9, 2023
Kicking off @a16zGames @100Thieves City of Games party at #LATechWeek 🔥🔥🔥 pic.twitter.com/zQcZedG15f
— Jon Lai (@Tocelot) June 9, 2023
Yesterday at @socinnovation I got to have this AWESOME conversation with @iamwill — musician, producer, technology entrepreneur, and Founder & CEO of https://t.co/D60y1e2JOu #LATechWeek pic.twitter.com/KBxK6rXyTG
— Anna Barber (@annawbarber) June 9, 2023
I absolutely love this game. Proud moment for the team @investwithatlas. #LATechWeek pic.twitter.com/fPZvKXU7TC
— Tobias Francis (@TobiasFrancis) June 9, 2023
Had a blast at LA Tech Week this year with @brexHQ
From hosting & moderating my first creator panel featuring @BlakeMichael14, to a fun rooftop night in Venice, and to attending some amazing events such as Watertower’s emerging manager panel and a VC/founder tennis tournament pic.twitter.com/udjfmLHE0L
— Jonathan Chang (@thechangj) June 8, 2023
Samson Amore is a reporter for dot.LA. He holds a degree in journalism from Emerson College. Send tips or pitches to samsonamore@dot.la and find him on Twitter @Samsonamore.
At Lowercarbon Capital’s LA Tech Week event Thursday, the synergy between the region’s aerospace industry and greentech startups was clear.
The event sponsored by Lowercarbon, Climate Draft (and the defunct Silicon Valley Bank’s Climate Technology & Sustainability team) brought together a handful of local startups in Hawthorne not far from LAX, and many of the companies shared DNA with arguably the region’s most famous tech resident: SpaceX.
Here’s a look at the greentech startups that pitched during the Tech Week event, and how they think what they’re building could help solve the climate crisis.
Arbor: Based in El Segundo, this year-old startup is working to convert organic waste into energy and fresh water. At the same time, it also uses biomass carbon removal and storage to remove carbon from the atmosphere and sequester it in an attempt to avoid further damaging the earth’s ozone layer. At the Tech Week event Thursday, Arbor CEO Brad Hartwig told a stunned crowd that Arbor aims to remove about five billion tons of organic waste from landfills and turn that into about 6 PWh, or a quarter of the global electricity need, each year. Hartwig is an alumni of SpaceX; he was a manufacturing engineer on the Crew Dragon engines from 2016-2018 and later a flight test engineer at Kitty Hawk.
Antora: Sunnyvale-based Antora Energy was founded in 2017, making it one of the oldest companies on the pitching block during the event. Backed by investors including the National Science Foundation and Los Angeles-based Overture VC, Antora has raised roughly $57 million to date, most recently a $50 million round last February. Chief operating officer Justin Briggs said Antora’s goal is to modernize and popularize thermal energy storage using ultra-hot carbon. Massive heated carbon blocks can give off thermal energy, which Antora’s proprietary batteries then absorb and store as energy. It’s an ambitious goal, but one the world needs at scale to green its energy footprint. According to Briggs, “the biggest challenge is how can we turn back variable intermittent renewable electricity into something that's reliable and on demand, so we can use it to provide energy to everything we need.”
Arc: Hosting the panel was Arc, an electric boating company that’s gained surprising momentum, moving from design to delivering its first e-boats in just two years of existence. Founded in 2021, the company’s already 70 employees strong and has already sold some of its first e-boats to customers willing to pay the luxury price tag, CTO Ryan Cook said Thursday. Cook said that to meet the power needs of a battery-powered speedboat, the Arc team designed the vehicle around the battery pack with the goal of it being competitive with gas boats when compared to range and cost of gas. But on the pricing side, it’s not cheap. Arc’s flagship vessel, the Arc One is expected to cost roughly $300,000. During the panel, Cook compared the boat to being “like an early Tesla Roadster.” To date Arc Boats has raised just over $35 million, according to PitchBook, from investors including Kevin Durant, Will Smith and Sean “Diddy” Combs.
Clarity Technology: Carbon removal startup Clarity is based in LA and was founded by Yale graduate and CEO Glen Meyerowitz last year. Clarity is working to make “gigaton solutions for gigaton problems.” Their aim? To remove up to 2,000 billion pounds of carbon from the atmosphere through direct air capture, a process which uses massive fans to move chemicals that capture CO2. But the challenge, Meyerowitz noted in his speech, is doing this at scale in a way that makes an actual dent in the planet’s emissions while also efficiently using the electricity needed to do so. Meyerowitz spent nearly five years working as an engineer for SpaceX in Texas, and added he’s looking to transfer those learnings into Clarity.
Parallel Systems: Based in Downtown LA’s Arts District, this startup is building zero-emission rail vehicles that are capable of long-haul journeys otherwise done by a trucking company. The estimated $700 billion trucking industry, Parallel Systems CEO Matt Soule said, is ripe for an overhaul and could benefit from moving some of its goods off-road to electric railcars. According to Soule, Parallel’s electric battery-powered rail vehicles use 25% of the energy a semi truck uses, and at a competitive cost. Funded in part by a February 2022 grant from the U.S. Department of Energy, Parallel Systems has raised about $57 million to date. Its most recent venture funding round was a $49 million Series A led by Santa Monica-based VC Anthos Capital. Local VCs including Riot Ventures and Santa Monica-based Embark Ventures are also backers of Parallel.
Terra Talent: Unlike the rest of the startups pitching at the Tech Week event, Terra Talent was focused on building teams rather than technology. Founder Dolly Singh worked at SpaceX, Oculus and Citadel as a headhunter, and now runs Terra, a talent and advisory firm that helps companies recruit top talent in the greentech space. But, she said, she’s concerned that all the work these startups are doing won’t matter unless we very quickly turn around the current trendlines. “Earth will shake us off like and she will do just fine in 10,000 years,” she said. “It’s our way of living, everything we love is actually here on earth… there’s nothing I love on Mars,” adding that she’s hopeful the startups that pitched during the event will be instrumental in making sure the planet stays habitable for a little while longer.
Samson Amore is a reporter for dot.LA. He holds a degree in journalism from Emerson College. Send tips or pitches to samsonamore@dot.la and find him on Twitter @Samsonamore.