LA Tech Updates: TikTok pays Creators as Rivals Dig In, Amazon Reportedly Eyes Sears, J.C. Penny Stores

Here are the latest updates on news affecting Los Angeles' startup and tech communities. Sign up for our newsletter and follow dot.LA on Twitter for more.

Today:

  • TikTok Pays Creators as Rivals Dig In
  • Amazon Wants to Use Sears and J.C. Penny Stores as Fulfillment Centers: WSJ

          TikTok Doles Out Money to Creators, Batting Away Rivals

          Tiktok announced today the first receipts of a $200 million creator fund including several Los Angeles-based app stars. It comes as the social app faces increased competition from those trying to lure away talent and the threat of an outright ban.

          The company has promised to up their funds for rising U.S. creators to $1 billion over the coming three years.

          Among the 19 selected so far is Los Angeles-based Alex Stemplewski, a photographer who shares the impromptu photo shoots he has with strangers in public with his 9.6M followers.

          There's also Justice Alexander, one of the top Latino creators on the app, who captures quick video of the many pranks he plays on his girlfriend and daughter with his 5.4M followers.

          Well-known TikTok-er David Dobrik recently gave away a Tesla to one of his more than 20M followers as part of a sweepstakes for the most heartfelt story.

          The Creator Fund will open their applications in the middle of the month for anyone 18 years or older looking to expand their work on Tiktok. To be considered, creators must have 10,000 followers or at least 10,000 video views in the last 30 days and follow community guidelines.

          President Trump recently signed an executive order that will ban the Chinese-owned company by September 20th unless it's sold to an American company before that date. TikTok has responded by threatening legal action.

          Amazon Wants to Use Sears and J.C. Penny Stores as Fulfillment Centers: WSJ

          live.staticflickr.com

          Amazon is in talks with mall operator giant Simon Property Group to convert Sears and J.C. Penney department stores into package distribution centers, according to a report from The Wall Street Journal.

          The discussions come as Amazon continues to grow its e-commerce empire which has helped contribute to the downfall of brick-and-mortar retailers including Sears and J.C. Penney, which both filed for Chapter 11 bankruptcy protection. That trend accelerated with the pandemic as malls closed and millions of consumers rely on Amazon for online shopping.

          Shares of Simon Property Group, which has 21 malls in California including the Del Amo Fashion Center, Brea Mall and Ontario Mills, jumped on the news. The company is set to report earnings after Monday's market close.

          Adding more warehouses would help Amazon speed up deliveries as the company plans to offer its Prime members 1-day delivery of their orders. Amazon posted $5.2 billion in profits in the second quarter, doubling its bottom line from the same quarter a year ago, despite spending more than $4 billion on COVID-19 initiatives.

          This story was originally appeared on GeekWire.

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          On this week's episode of Office Hours, you'll hear from VC legend Bill Gurley, a general partner at Benchmark. Based in Silicon Valley, Bill is famously known for investing early in trailblazing companies including Uber, GrubHub and Zillow — the company I co-founded and led for 10 years.

          This is the first time I've had a guest on twice, and that's because Bill is so full of dense, rich insight when it comes to startup culture, tech and investing — dot.LA's sweet spot.

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          Here are the latest updates on news affecting Los Angeles' startup and tech communities. Sign up for our newsletter and follow dot.LA on Twitter for more.

          Today:

          • Apple Podcast Veteran Steve Wilson Joins Startup QCODE
          • Amazon in Exclusive Talks to Buy Podcast Studio Wondery, Wall Street Journal Reports
          • Pharrell Launches Black Ambition Incubator

            Apple Podcast Veteran Joins Startup QCODE

            qcode www.sonos.com

            QCODE, a Los Angeles podcast startup run by a former Creative Artists Agency talent agent, snagged longtime Apple podcast executive Steve Wilson. The 15-year veteran will become QCODE's chief strategy officer.

            QCODE, which last month raised $6.4 million in a Series A round led by Sono, is positioning itself as a funnel for Hollywood.

            Founded by Rob Herting, a former agent who had represented largely writers and filmmakers, the company has produced eight shows since 2019. Several have been auctioned for film and television, including "Dirty Diana." Amazon picked up the 6-part erotic drama for a TV series.

            Wilson, who most recently ran marketing for Apple Podcasts, brings insights from the behemoth platform as the industry sees revenues soar. Advertising brought in near $1 billion this year, according to Interactive Advertising Bureau's podcast report prepared by PwC.

            Amazon Reportedly in Exclusive Talks to Buy Wondery

            Hernan Lopez Hernan Lopez started Wondery with the belief that in-depth, narrative audio stories were poised to bloom.

            Amazon is in "exclusive talks" to buy podcast company Wondery and subsume its 30 hit shows and over 8 million monthly listeners into its empire, the Wall Street Journal reported on Wednesday.

            The talks reportedly value Wondery above $300 million, in line with previous estimates from analysts, when Apple and Sony were said to have expressed interest.

            Wondery has produced dozens of original series including "Dr. Death" and "Business Wars," and has 19 shows currently in development to become television series.

            The company does not publicly disclose its financials, but chief executive Hernan Lopez has previously said the company is profitable. About three-quarters of Wondery's revenue comes from advertising, but Lopez has said the company's revenue share from content licensing is growing (Wondery owns the intellectual property for all of its originals). It also launched a subscription service, Wondery Plus, in June and is currently looking to expand its international footprint.

            Wondery, the West Hollywood-based company with the largest audience of any independent podcast producer, has been the subject of swirling rumors that several suitors are interested in acquiring it.

            After a pandemic-induced decline that struck much of the podcasting industry, Wondery's audience has surpassed its pre-COVID levels. Its Q3 revenue was about double year-on-year and its Q4 performance has been strong, Lopez previously told dot.LA.

            Podcasting overall now attracts over 100 million monthly listeners, according to Edison Research. The Interactive Advertising Bureau projects podcasting revenues to exceed $1 billion by 2021.

            That growth has spurred somewhat of an arms race, most evident in Spotify's spending spree, which also has helped that company diversify from its reliance on streaming. Amazon Music is one of Spotify's biggest competitors along with Apple Music, and recently expanded into podcasts as well.

            Acquiring Wondery would give Amazon more content to slide into Amazon Music, a scaled-down version of which is free for Amazon Prime subscribers. Combining that content with its Alexa smart speaker also could empower the company to capture more eyes and ears in the increasingly competitive attention economy.

            The talks are reportedly ongoing and no deal has been confirmed.

            Pharrell Launches Black Ambition Incubator

            Pharrell Williams Pharrell Williams Launches Black Ambition Incubator

            Rapper and producer Pharrell Williams released "Entrepreneur" with Jay-Z earlier this summer, a song that became an anthem for Black ambition. Now, Williams is launching an incubator to put money behind his message.

            Called Black Ambition, the nonprofit aims to invest in Black and Latino startup founders, and it's beginning by creating two prize competitions set to close in July 2021. The effort backed by Adidas, Chanel and philanthropic organizations including The Rockefeller Foundation and the Chan Zuckerberg Foundation. Silicon Valley startup investor Ron Conway and Buzzfeed founder and CEO Jonah Peretti also contributed.


            The first competition will award up to $250,000 to current students or recent alumni from a historically Black college developing or in the seed stage of a company. Smaller prizes will be awarded to at least nine additional teams.

            The second competition, called the Black Ambition Prize, will give $1 million in seed money to an early-stage company focused on tech, design, healthcare or consumer products and services. Another nine teams will get smaller prizes. Finalists will be connected with and mentored by a network venture capitalists and angel investors.

            "Because we don't have enough of the market share, our kids end up having issues with disproportionate access to healthcare, disproportionate access to education and as a culture, we have disproportionate access as it pertains to legislation and representation," Williams said in a video announcing the news.

            Williams was inspired to pool talent from historically Black colleges and universities and build a new pipeline of investment and resources to young people.

            "We want to lift our HBCUs. They lift so many of us. They deserve to be in lights," Williams said. "We think it's high time that we own more companies.

            In August, Williams published a piece in Time Magazine that accompanied a cover spread on "The New American Revolution." It coincided with his release of "Entrepreneur," the song and music video he produced with Jay-Z as a tribute to Black founders across the nation.

            "Recent events and tragedies have illustrated the always existent stark divisions in the American experience, and while entrepreneurship has long been a tenet of the American dream, marginalized people have faced long-standing barriers to success," Williams said in a statement.

            Rapper and producer Pharrell Williams released "Entrepreneur" with Jay-Z earlier this summer, a song that became an anthem for Black ambition. Now, Williams is launching an incubator to put money behind his message.

            Called Black Ambition, the nonprofit aims to invest in Black and Latino startup founders, and it's beginning by creating two prize competitions set to close in July 2021. The effort is backed by Adidas, Chanel and philanthropic organizations including The Rockefeller Foundation and the Chan Zuckerberg Foundation. Silicon Valley startup investor Ron Conway and Buzzfeed founder and CEO Jonah Peretti also contributed.

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