Column: Five Reasons Why Space Matters (Hint: It's Not Tourism)

Krisztina 'Z' Holly
Krisztina "Z" Holly is a venture partner with Good Growth Capital and an advisor to leaders harnessing untapped innovation and novel business models for scale. Z is an MIT-trained engineer and serial tech entrepreneur who has been scouting, advising and investing in early-stage deep tech innovators for more than two decades.
Column: Five Reasons Why Space Matters (Hint: It's Not Tourism)

Last night, Rocket Lab made a big comeback from its failed launch last May. The Long Beach startup's Electron rocket launched a satellite for the U.S. Space Force, bringing their total to 105.


This capped a busy month for space, with Richard Branson and Jeff Bezos making their space dreams come true in the weeks prior. But with all the attention on the billionaire's exploits, are we missing the bigger picture?

The lack of coverage for Rocket Lab's rebound is just as telling as the fanfare around Virgin Galactic and Blue Origin's flights. Space tourism is distracting us from why we should actually care about space.

The Biggest Space News of the Year

While the public has debated the merits of this month's sub-orbital joyrides, the media missed the biggest aerospace event of the year a month ago, when Hawthorne-based SpaceX launched their Transporter‐2 mission on June 30.

What was so revolutionary about last month's launch? Nothing. And that's partly the point. Launches are becoming routine thanks to reusable launch vehicles.

But the Transporter‐2 mission was significant, because the rideshare mission launched 88 different satellites for customers into orbit, enabling innovation for scores of organizations.

The launch was the first for Santa Barbara startup Umbra, which has developed technology capable of seeing at night and through dense clouds; it has since been added to a joint $950M Air Force contract. The payload also included a competing satellite from Iceye, manufactured in Irvine, and two cubesats from San Diego-based General Atomics to test optical communications between satellites and from satellites to drones.

As a preeminent hub for aerospace, Southern California stands to gain greatly as launches become more frequent and the industry re-emerges from its post-'80s slumber. But other hubs are rapidly catching up.

As a venture capitalist and advisor to space—and other—startups, I've seen the sector evolve into something barely recognizable from the time I started my career as an engineer on the Space Shuttle Main Engine decades ago. Here are five reasons we should care.

1. Space Improves Our Quality of Life

If you looked at your phone this morning to get the weather forecast or check the route to your first meeting, you can thank satellites for the help.

"The blue dot on your phone is possible due to billions of dollars of space infrastructure," says Van Espahbodi, managing partner and co‐founder of Starburst, a company that catalyzes connections in the aerospace industry. "Sure it results in food delivery, dating apps and so many innovations in daily life, but none of this would be possible without the boundaries of exploration into space."

A SpaceX Starlink satellite

Space isn't just delivering convenience, it's democratizing access to data and technology, too.

"There are four billion people unconnected in this world," says Akash Systems CEO and founder Felix Ejeckam, who aims to expand global access to broadband. "Unless you're still going to run expensive fiber optic cables all over the Earth, you have no choice but to drop internet beams from space."

Programs like OneWeb and SpaceX's Starlink are bringing broadband connectivity to every corner of the globe, and Akash has developed advanced materials that will help reduce the cost and increase speeds of such Internet satellites, aiming to make these services more accessible and ubiquitous.

On the flip side—those times we claim we're "off the grid" from work for a week? Those days might be numbered.

2. Space Lets Us Understand Our World and Adapt to Climate Change

With all this talk of Mars missions as our "Plan B," you might ask, "Why not invest in the planet we have?" The aerospace industry is doing that, too.

Satellites are critical for sensing our world—tracking changes in infrastructure, weather and the environment over time. Satellites can measure the height of entire oceans within an accuracy of about an inch, and NASA's first TROPICS cubesat, launched on Transporter-2, will use microwaves to predict hurricanes.

"Our space endeavors have been instrumental to understanding the extent of climate change on Earth using satellite data from NASA and NOAA," says Jessica Rousset, Deputy director of the Arizona State University Interplanetary Initiative.

Government efforts are complemented by an ever‐expanding collection of private constellations with new capabilities. With these expanding capabilities we can sense new things—and sense them more often. Inexpensive infrared and hyperspectral imaging of crops can help farmers make better decisions and make agriculture more productive and resource‐ efficient. Soon, we'll even be able to see underground, thanks to companies like Lunasonde.

Granted, the carbon emissions from rocket launches can have their own negative impact on the environment. Fortunately, some launch services—including Blue Origin—are shifting to less‐ polluting fuels like hydrogen.

3. Space Enables Things We Could Never Do Before

The unique environment of space unlocks new opportunities in science and industry that would be worthy of science fiction movies.

Companies like Varda plan to set up self‐assembling, automated factories on orbit to manufacture things. Production of semiconductors, protein crystals, polymers, new drugs or optical fibers might benefit from the zero‐gravity, near‐vacuum conditions of space.

Some have proposed setting up 24/7 solar farms in space and beaming the energy down to Earth using lasers or microwaves.

And 21st‐century prospectors have set their sights skyward, with dreams of mining asteroids for precious materials. Last year, Japan hosted the first successful asteroid sample recovery mission, landing their loot in the Australian outback.

Not everyone believes space production will be practical anytime soon, but research in space has already led to discoveries in material science, plasma physics and biology.

The publicly‐funded International Space Station has been a productive early laboratory. Now, space infrastructure developer Axiom Space is working towards a 2024 launch of their initial components for the next generation commercial space station, partially funded by a $140M NASA grant.

4. Space Has Created a Burgeoning New Industry

Space has another very practical benefit; it has created an entirely new sector of the economy. Early governmental funding and discoveries has set the stage for an entirely new ecosystem of startups, suppliers and service companies sustained by private dollars. Morgan Stanley estimates that the global space industry—$350B as of 2016—will expand to over $1 trillion by 2040.

These companies are driving innovation, fueling economic growth, and creating new jobs in an industry where the United States still maintains a manufacturing edge.

Satellites in space means the need for infrastructure, being built now. Orbit Fab, the "Gas Stations in Space" company, launched the world's first satellite fuel tanker on Transporter‐2. They are building a materials supply chain to support a space economy that CEO Daniel Faber predicts will ultimately lead to permanent jobs in orbit. (Full disclosure: I'm an investor.)

"Fuel is now available for purchase and delivery in space," says Faber, "And we don't have to keep throwing away perfectly good satellites when they run out of fuel."

In the past NASA has justified their funding by pointing at thousands of technologies spun out of the space program—memory foam, cochlear implants, freeze dried food, CMOS image sensors and powdered lubricants — to name a few.

"But today, it's almost like the reverse is happening," says Jonathan Fentzke, the newest managing director of the Techstars Space accelerator. Space is driving demand for technology. "Unique challenges on orbit, like petabytes of image data streamed daily or the lack of heat dissipation in a vacuum, means the industry is always looking for new technologies and suppliers to solve their challenges." The June 30 launch of three SAR satellites alone will add 30-40 terabytes of data per day to the cloud.

Which is why his 2021 cohort includes startups like Pixspan, an image compression company with roots in Hollywood, and Thermexit, whose carbon nanomaterials were originally designed for supercomputers. These companies are finding a new thirst for their technologies thanks to the space industry.

5. Space Inspires Discovery

And finally, space still holds a special place by being the final frontier. While there aren't many places left on Earth that haven't appeared in a selfie, endless discoveries await us beyond our atmosphere.

The James Webb Space Telescope

Southern California has a long history of space adventures, including Chuck Yeager's historic sound barrier-busting flight in 1947. From NASA-JPL's Curiosity and Perseverance rovers to SpaceX's dreams of colonizing Mars, we continue to be the epicenter of big-idea space exploration

And our discoveries aren't just for adventure, either. By exploring beyond our planet, we can prepare for interplanetary human settlement, learn about the origins of life or better understand the beginning of the universe.

In El Segundo, Northrop Grumman is assembling the much awaited James Webb Space Telescope, soon headed a million miles away to "L2," a cold, stable perch past the moon. From there it will peer deep into space, providing views of faraway exoplanets and glimpses of light from 13.6 billion years ago, when the earliest stars and galaxies were just forming in the universe.

Our Future in Space is Inevitable

Things have changed for the better in aerospace over the last decade.

Back when I was a young engineer working at Rocketdyne, my work was funded by NASA. I remember how we depended on the largess of government dollars and lived by the whims of public sentiment. Risk and new ideas weren't readily accepted, and failure wasn't an option.

Today, aerospace is more iterative, entrepreneurial, and largely driven by commercial interests. "There's so much money and interest out there, and there is more of a culture of innovation," says Carrie Hernandez, formerly of SpaceX and now CEO and Co‐Founder of Rebel Space Technologies in Long Beach.

And private space investments have never been higher. "In 2021, private capital will invest more money in the space industry than NASA will spend on everything," NASA-JPL physicist and local angel investor Shanti Rao quipped recently on Twitter.

And with a few exceptions, we're exploring at relatively bargain‐basement prices. Reusable rockets, space servicing, robotics and other technologies make space more affordable than ever.

"In the 60s, we went at great expense—often around 4% of GDP. But today, we're doing twenty times more at one‐tenth the price," says a colleague who asked to remain anonymous because he doesn't have permission to speak on behalf of his government employer. "And this time we're not just stopping by to say hello, we're setting up a permanent base."

Private industry is taking the lead, but Southern California needs to keep its eye on the ball. These days space companies can be almost anywhere, and Colorado, Texas and Northern California have become major hubs of space innovation, too.

NASA's Apollo and Space Shuttle programs were as much a PR effort as they were science expeditions. And those educational efforts have paid dividends by inspiring more public funding for research and development and a whole generation of kids to pursue science and math.

Will Blue Origin and Virgin Galactic succeed at filling this inspirational role? I hope so. But it's time for us to celebrate and support all the entrepreneurs exploring the boundaries of space.

Because it turns out, you don't need to be a billionaire to pursue your space dreams. And with or without public support, the space industry is now inevitable.

https://www.linkedin.com/in/krisztinaholly/
Rainmaker Just Raised $100M to Solve the Weather

🔦 Spotlight

Hey Los Angeles.

Last year, we introduced you to an El Segundo startup that had raised $25M to make it rain.

This year, rain is apparently just the beginning.

Rainmaker raised a $100M Series B to expand its cloud-seeding technology and pursue a much larger ambition: building the scientific and technical infrastructure to understand, influence and eventually mitigate extreme weather.

In startup parlance, it is a pivot from “make it rain” to “solve the weather.” Subtle.

The round included NOA VC, DCVC, Lowercarbon Capital, Dream Ventures and LA-based Upfront Ventures.

When we covered Rainmaker last year, the company was preparing to expand its drone fleet, atmospheric research and commercial partnerships.

It now says it has generated more than 145M verified gallons of precipitation during a four-month period. During a summer research program near Homer, Alaska, Rainmaker says one operation produced 19M gallons in three hours.

Those are eye-catching numbers. The company’s ambitions are considerably larger.

Rainmaker is working to build what it calls a “Weather Prime,” combining atmospheric science, autonomous aircraft, sensors and predictive software into an infrastructure platform capable of responding to water scarcity and extreme weather.

The idea is to make cloud seeding cheaper, more measurable and easier to deploy at scale. Rainmaker’s drones deliver specialized particles into carefully selected clouds, while radar and software help determine where to operate and measure how much additional rain or snow may have been produced.

The new funding will help Rainmaker hire more atmospheric scientists, meteorologists, chemists and engineers while expanding its research and data-collection capabilities. The company also plans to move toward increasingly autonomous operations, allowing more missions to be conducted at a lower cost.

Rainmaker expects its cost per acre-foot of water to fall below alternatives such as desalination and agricultural fallowing in the Colorado River Basin during the upcoming water season. If that projection holds, cloud seeding could begin looking less like an experimental intervention and more like another piece of water infrastructure.

That “if” is doing some serious atmospheric lifting.

Cloud seeding has existed for decades, but measuring its precise effects remains scientifically difficult. A successful operation requires the right type of cloud at the right moment, and proving exactly how much precipitation would have fallen without intervention is no simple task.

Rainmaker’s next challenge, therefore, is not merely to produce more rain. It must make the results measurable, repeatable and credible enough for governments, farmers and communities to trust.

That responsibility becomes even more important as the company expands its vision beyond water. Rainmaker describes cloud seeding as the first step toward eventually mitigating hail, heat and other weather-related threats.

It is a grand ambition, even by startup standards. Most founders promise to disrupt an industry. Rainmaker wants to influence the atmosphere.

The company’s location makes the mission particularly fitting. El Segundo has become a center for startups tackling physical problems with drones, satellites, factories and defense systems. Rainmaker is applying that same aerospace-minded approach to one of the West’s oldest constraints.

For Los Angeles, this story is about more than another substantial funding round. Rainmaker has progressed from proposing that cloud-seeding technology could be modernized to claiming it has produced rainfall at a meaningful scale.

Now, with four times the capital it announced last year, the company must prove that those results can become dependable infrastructure.

California has never been shy about reshaping nature to support its growth. Rainmaker is betting that the next great water project will not be built across the landscape.

It will fly into the clouds.

More from this week’s LA startup and venture scene below.

🤝 Venture Deals

    LA Companies

    • Hair care brand Arey raised an undisclosed Series A led by Unilever Ventures, with returning investors Greycroft and Female Founders Fund also participating. The company, which develops supplements and topical treatments for graying and aging hair, will use the funding for product development, clinical research, hiring and retail expansion. - learn more
    • Fluxnium raised a $7M seed round led by Congruent Ventures, with participation from Constellation Technology Ventures and Active Impact Investments. The company will use the funding to develop, test and scale its fiber technology for extracting uranium from seawater, aiming to create a secure domestic alternative to conventional uranium mining. - learn more

    LA Venture Funds
    • Alexandria Venture Investments participated in BigHat Biosciences’ $75M Series C, co-led by DFJ Growth and Premji Invest, bringing the AI-driven biotech’s total funding to $223M. BigHat will use the capital to expand its autonomous protein-design platform and advance its AI-designed cancer therapies, including BHB810 and BHB299, toward key clinical milestones. - learn more
    • Alt Capital participated in Trebellar’s $18M Series A, led by Blossom Capital and joined by Haystack, 1Flourish and Bynd Venture Capital. Trebellar will use the funding to expand its engineering and go-to-market teams and enhance its AI platform, which helps enterprises combine fragmented workplace data to make better real estate decisions. - learn more
    • B Capital participated in Precision Neuroscience’s oversubscribed $250M Series D, co-led by Pershing Square, the Ackman Oxman Institute and an undisclosed life sciences fund, bringing the brain-computer interface company’s total funding to $430M. Precision will use the capital to expand clinical trials, advance its Layer 7 brain implant through additional FDA review and build the infrastructure needed for commercialization. - learn more
    • Mantis Venture Capital participated in Pilgrim’s $25M seed round, led by Buckley Ventures, which valued the Redwood City defense-biotech startup at $150M. Pilgrim is developing a portable system that monitors the air for viruses and other biological threats, with additional backing from Anthropic leaders, Coinbase co-founder Fred Ehrsam and other technology investors. - learn more
    • Starshot Capital participated as a returning investor in Mojave Energy Systems’ $19M Series B, led by Fairtree Elevant Ventures with a significant investment from River Bay Investments. The Sunnyvale company will use the funding to expand manufacturing, grow its sales team and develop new products for its energy-efficient commercial heating, cooling and humidity-control platform. - learn more
    • 4th Revolution Capital participated in infiniFi’s $3M-plus funding round, led by Electric Capital and joined by New Form Capital, Generative Ventures, Fasanara Capital and others. The decentralized finance platform will use the capital to launch infiniFi Prime, expand its products through neobanks and consumer finance apps and prepare for its Q4 token generation event. - learn more
    • Riot Ventures participated in American Supercritical’s $8M pre-seed round, led by Silent Ventures and joined by Harpoon, Reveille VC, Hillwood, Mana Ventures, Climate Capital and Alumni Ventures. The Denver startup is developing compact systems that use supercritical carbon dioxide to convert gas-turbine waste heat into additional electricity, potentially helping data centers generate up to 50% more power without using more fuel or water. - learn more
    • M13 led Baselayer’s $35M Series A, with participation from Torch Capital, Picus Ventures, Afore Capital and Socure executive Matt Thompson. The company will use the funding to expand its identity and risk infrastructure beyond businesses to AI agents, helping financial institutions verify who an agent represents, what it is authorized to do and whether it can be trusted. - learn more
    • BAM Ventures participated in Bird&Be’s $13M funding round, which was led by BDC Thrive and BFG Partners and joined by Founder Collective, Rejuvenation Ventures and HSR Ventures. The fertility and wellness brand will use the capital to develop new supplements and at-home diagnostic tests, expand its retail presence and broaden access to evidence-backed reproductive care. - learn more
    • March Capital joined Snorkel AI’s $350M Series E as a new investor, participating in a round co-led by Insight Partners and S32 that valued the company at $3.5B. Snorkel will use the funding to expand its platform for creating the specialized datasets and training environments needed to develop and evaluate advanced AI models and agents. - learn more
    • Clocktower Technology Ventures is among the investors backing Soteris, which has raised more than $8M in seed funding led by Spider Capital. The Y Combinator-backed insurtech company has emerged from stealth with an AI platform that helps property and casualty insurers identify the profitability and expected losses of individual policies, potentially improving margins without changing rates or staffing. - learn more
    • Smash Capital led Firecrawl’s $75M Series B, with participation from Altos Ventures, Nexus Venture Partners, Y Combinator, Freestyle and Offline Ventures. Firecrawl will use the capital to expand Alexandria, its new platform that gives AI agents one place to access the live web, specialized indexes and licensed data while compensating the people and organizations supplying that knowledge. - learn more
    • ND Capital participated in Ramona’s $25M Series A, which was led by ARCH Venture Partners and joined by Stealthpoint, Fall Line Capital, Hamamatsu, Murchison Capital Partners and Overlap Holdings. Ramona will use the funding to expand production and grow its team as it scales a 24-camera microscope that captures entire biological experiments at cellular resolution, generating richer data for drug discovery and AI models. - learn more
    • Chisos Capital participated in Axio BioPharma’s $2.4M pre-seed round alongside Elmstead Partners, the Chemical Angel Network and several angel investors. The Madison-based company will use the funding to deploy its Axio Lattice platform, which connects manufacturing data across pharmaceutical companies and their partners without requiring either side to replace existing systems or relinquish control of its data. - learn more

    LA Exits

    • Zuma has been acquired by real estate technology company Venn for $50M, bringing its AI leasing tools and engineering team into Venn’s platform. The combined company plans to help multifamily operators automate leasing and eventually expand its AI capabilities into collections, renewals and resident support. - learn more
    • GTXN was acquired by digital asset platform Luno for an undisclosed amount, bringing its licensed collection and payout infrastructure into Luno’s operations. GTXN will serve as Luno’s cross-border payments arm, helping enterprise customers move money between developed and emerging markets through a single provider with fewer intermediaries and faster settlement. - learn more
    • Podium Entertainment was acquired by private equity firms Shamrock Capital and Flexpoint Ford for more than $400M, with GoldState Music also taking a minority stake. The audiobook and publishing company, which has built a catalog of roughly 15,000 titles by working with independent authors, will retain its existing management team. - learn more

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      Impulse Space Just Raised $308M to Build the Roads in Orbit
      Impulse Space

      🔦 Spotlight

      Happy Friday, Los Angeles.

      Space may not have roads, but it still has a transportation problem.

      Rockets have become remarkably good at carrying satellites beyond Earth. Once those satellites reach space, however, getting them from one orbit to another can still be slow, expensive or impossible.

      Redondo Beach-based Impulse Space wants to change that, and investors are giving it considerably more fuel for the journey.

      The company raised a $308M extension to its Series D, bringing the round’s total to $808M. The new financing comes just over three months after Impulse announced the initial $500M raise and pushes its total capital raised above $1.3B.

      Existing investors 137 Ventures, BANNER VC, DFJ Growth, Linse Capital, Lux Capital and Valor Equity Partners participated in the extension. Impulse did not disclose a valuation, but convincing existing backers to commit another $308M so soon after an already substantial round is a strong signal of confidence in both the company and the market it is pursuing.

      Founded by former SpaceX propulsion executive Tom Mueller, Impulse is building vehicles designed to move satellites and payloads after they have already reached space. If rockets are responsible for getting cargo off the ground, Impulse wants to handle what happens after delivery.

      Impulse Space

      Its Mira spacecraft is built for precise maneuvering, payload deployment and proximity operations in orbit. Helios, scheduled for its first flight in 2027, is a high-energy kick stage designed to move payloads from low Earth orbit to destinations such as geostationary orbit in less than a day. The company has also introduced an electric propulsion system called Electra and a rideshare service aimed at making higher-energy orbits more accessible.

      Together, those products represent something larger than a collection of spacecraft. Impulse is attempting to build a transportation network for an economy that increasingly needs one.

      That need is becoming harder to ignore. More satellites are reaching orbit, governments are prioritizing responsive space capabilities and commercial operators want greater flexibility after launch. A satellite that can change position, reach a different orbit or respond quickly to a new mission is significantly more useful than one permanently tied to its original destination.

      The U.S. government is already putting Impulse’s thesis to work. Helios was selected for the U.S. Space Force’s National Security Space Launch Phase 3 Lane 1 program, making it the first upper-stage prime awarded a position in the program. Impulse also received a $28M contract extension to provide two Mira spacecraft for additional Space Systems Command missions.

      The company says its headcount has more than doubled over the past year as it expanded its facilities in Redondo Beach, Mojave, Boulder and Washington, D.C. The new capital will support further hiring, product development and facility growth as Impulse works to serve commercial, civil and defense customers.

      It also recently appointed its first chief financial officer, Adam Townsend, who previously helped guide Vizio through an IPO and its eventual sale to Walmart. The hire is another sign that Impulse is preparing for a more complex chapter, one defined not only by engineering milestones but also by a growing capital base, government contracts and large-scale operations.

      That is where this announcement becomes more interesting than its considerable price tag.

      Impulse has already shown that Mira can operate in space. Now it must prove that it can turn several ambitious vehicles into dependable infrastructure. The difference between a promising spacecraft company and a transportation network is repetition: more missions, more customers and systems that work reliably enough to become part of how the space economy operates.

      An $808M round gives Impulse the resources to pursue that vision. It also raises the expectations attached to it.

      For Southern California, the financing reinforces the region’s role in the new space economy. Los Angeles helped build the original aerospace industry, and a new generation of companies is now developing the vehicles, factories and infrastructure intended to support life beyond the launchpad.

      Impulse Space is tackling what may be the next big bottleneck. Getting to space is only the beginning.

      Someone still has to get you where you are going.

      More from this week’s LA startup and venture scene below.

      🤝 Venture Deals

        LA Venture Funds

        • Riot Ventures co-led EnduroSat’s $205M funding round alongside Atreides Management, with participation from GV, Founders Fund, Lux Capital, the European Innovation Council and other investors. The Bulgarian space company will use the capital to open a high-volume satellite factory in the U.S., build a major European space and defense hub and scale production of its standardized spacecraft. - learn more
        • Upfront Ventures and M13 participated in Ayble Health’s $16M Series A, led by Neon and joined by Unum Ventures, Cleveland Clinic Ventures, DigiTx and Accomplice. The virtual-care company will use the funding to expand its AI-enabled clinic for chronic digestive and autoimmune conditions across national health plans, major employers and benefits platforms, bringing its total capital raised to more than $27M. - learn more
        • Blue Heron Ventures participated in Voxela’s Series A, led by Delight Ventures and joined by SOMPO Growth Partners, Happiness Capital, Archetype Ventures and ALL STAR SAAS FUND, bringing the eldercare technology company’s total funding to approximately $13.2M. Voxela will use the capital to expand hiring and develop new AI capabilities for its VCare platform, which helps care facilities monitor residents, prevent incidents and automate administrative work such as documentation and reporting. - learn more
        • Clocktower Technology Ventures participated in Mainstay’s more than $18M growth round alongside new investors Parker89, Stackpoint, Alpaca VC and FJ Labs, as well as returning backers Khosla Ventures and Era Ventures. Mainstay also acquired AI-powered listing platform Truelist and will use the funding to bring its real estate data, pricing and automation infrastructure to more brokerages, agents and smaller investors. - learn more
        • Amboy Street Ventures participated in Evvy’s $40M Series B, led by Catalio Capital Management and joined by new and returning investors including Rethink Impact, Muse Capital, Labcorp Venture Fund and General Catalyst. Evvy will use the funding to expand its AI-powered women’s health diagnostics and care platform, beginning with fertility, while growing distribution through physicians and strategic partners. - learn more
        • Second Sight Ventures participated in Fin.com’s $20M seed round, led by Expa and Uber co-founder Garrett Camp, with backing from Coinbase Ventures and other investors. The payments infrastructure startup will use the funding to expand its cross-border network through additional acquisitions and plans to acquire a bank within six months. - learn more
        • Clearlake Capital, Mantis Venture Capital and Sound Ventures participated in Factory’s $200M funding round, which valued the AI software development company at $5B and brought its total funding above $400M. Factory will use the capital to accelerate research, product development and global expansion for its platform, which enables enterprises to build, manage and improve software using autonomous AI agents. - learn more
        • Navitas Capital led Scaffold’s $15M seed round, with participation from D.R. Horton, Pulte Homes, Builders FirstSource and other construction-industry investors. The Austin startup will use the funding to expand its engineering team and broaden its AI-powered platform, which connects homebuilders, contractors and suppliers to automate scheduling, purchase orders and other coordination work. - learn more
        • Halogen Ventures led it’s electric’s oversubscribed bridge round, joined by Wisdom Ventures, Future Communities, E8 Angels and other new and returning investors, bringing the curbside EV-charging startup’s total funding to $15M. The financing will support its rapid expansion, including a New York City contract to install hundreds of locally manufactured chargers across all five boroughs over the next three years. - learn more
        • Matter Venture Partners participated in Delos Data’s more than $100M funding round alongside Matrix, Playground Global, Socratic Partners, Capricorn’s Technology Impact Fund and IAG. The Palo Alto startup will use the capital to expand its engineering teams and accelerate development and sales of its Nonstop AI infrastructure, designed to reduce network bottlenecks and improve the speed and efficiency of AI inference. - learn more
        • Mantis Venture Capital and Gold House participated in A Vinyl Bar in Shibuya’s $5.5M pre-seed round alongside SV Angel, BoxGroup, Quiet Capital and other investors. Founded by Spotify’s former head of innovation, the startup is developing playful music apps that let users remix, manipulate and collaboratively create sounds rather than simply stream or generate songs. - learn more

        LA Exits

        • Headspace has agreed to be acquired by AI healthcare company Sword in a deal expected to close by the beginning of Q4 2026; financial terms were not disclosed. The acquisition will combine Headspace’s mental health brand, global consumer base and network of more than 15,000 providers with Sword’s AI-powered clinical platform to offer more personalized and continuous care. - learn more
        • Nasty Gal was acquired by WSG Brands for an undisclosed amount, adding the women’s fashion label to a portfolio that also includes Von Dutch and Allbirds. WSG plans to expand Nasty Gal internationally and into categories such as footwear, beauty, activewear and accessories while growing its direct-to-consumer, wholesale and licensing businesses. - learn more
        • Converse Health was acquired by healthcare AI company Hello Patient for an undisclosed amount, bringing its back-office automation technology into the buyer’s platform. The combination will allow medical practices to use one system for patient communications and administrative work such as referral processing, chart follow-ups, authorization paperwork and medical records. - learn more

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          From Breaking Tech News to Backing It
          Image Source: Sources

          🔦 Spotlight

          Hey there, Los Angeles.

          For the past decade, Alex Heath has made a career out of figuring out what the technology industry is doing before everyone else.

          Now, he is going to invest in it.

          Heath announced this week that he is joining Los Angeles-based Sound Ventures as a partner on its investing team. The veteran technology journalist will continue independently operating Sources, the newsletter and podcast business he launched after leaving The Verge last year.

          It is an unusual career move, but perhaps not as unusual as it initially appears.

          Journalists and venture capitalists spend much of their time doing surprisingly similar work. Both look for signals before they become obvious, build relationships with people who know what is coming next and attempt to distinguish a lasting shift from a convincing story.

          The crucial difference is what happens after they find one.

          A journalist publishes. An investor writes a check.

          Heath has spent years reporting on some of the technology industry’s most powerful companies and executives. At The Verge, where he served as deputy editor, his work focused on the internal decisions shaping companies such as Meta. More recently, Sources has taken readers inside the AI race through reporting and interviews with executives including Sam Altman and Mark Zuckerberg.

          That experience gives Sound something venture firms increasingly want: someone who already understands the founders, companies and narratives competing to define the next era of technology.

          Sound Ventures is not exactly starting from scratch. Led in Los Angeles by Guy Oseary and Effie Epstein, the firm manages nearly $2B and has backed companies including OpenAI, Anthropic, World Labs, Brex, Affirm and GitLab. According to The Wall Street Journal, Sound deployed more than $800M into early positions in OpenAI, Anthropic and World Labs as it intensified its focus on artificial intelligence.

          Heath is joining during an important transition for the firm. Ashton Kutcher, who co-founded Sound with Oseary in 2015, departed earlier this year to launch a new venture firm. Oseary and Epstein are continuing to lead Sound while raising its fifth flagship fund and sharpening its strategy around companies with the potential to reach meaningful commercial scale.

          Adding Heath suggests that Sound’s next phase will not be defined by capital alone.

          As AI makes it faster and less expensive to build software, technical capability may become less effective as a differentiator. More startups will be able to create credible products, and more of them will compete for the same finite supply of customers, talent and attention.

          In that environment, knowing how to identify a compelling founder is only part of the job. Venture firms also need to understand how companies earn trust, communicate what makes them different and remain culturally relevant in an increasingly crowded market.

          That is familiar territory for Sound. Oseary built his career managing artists including Madonna and the Red Hot Chili Peppers, where recognizing talent was inseparable from helping that talent connect with an audience. Heath brings a different version of the same instinct, developed through finding important stories and understanding why people should pay attention to them.

          Heath will continue owning and operating Sources independently while expanding its podcast and interviewing prominent voices across the technology industry. That means he is not abandoning the platform or audience he built. He is adding a new vantage point.

          The combination could prove especially valuable to Sound. Heath brings the instincts of a reporter, the reach of an independent media founder and years of relationships with the people shaping technology. Now, he can apply that experience to finding and supporting the next generation of founders.

          It is a fitting evolution for someone who has spent his career identifying important technology stories early.

          This time, he will have the opportunity to help write what happens next.

          Venture firms once competed primarily through capital, networks and operating expertise. Now, access to attention is becoming an asset of its own. Founders need help reaching customers and shaping public understanding, while investors want better ways to recognize which people and ideas will command that attention next.

          Sound Ventures hired someone who has spent a decade doing exactly that.

          Heath used to decide which technology stories were worth following.

          Now, he will help decide which ones get funded.

          More from this week’s LA startup and venture scene below.

          🤝 Venture Deals

            LA Companies

            • Maven Robotics emerged from stealth with a $100M Series A and humanoid robots already operating in warehouse deployments. The company says its robots can work for 16 hours a day with 99% uptime and is positioning itself as a reliable alternative for businesses whose existing robotics providers fail to meet deployment targets. - learn more

            LA Venture Funds
            • Bedrock Capital participated in Mach Industries’ $600M Series C extension alongside Ribbit Capital, Infinite Capital and Sequoia, bringing the round’s total to $900M and doubling the defense startup’s valuation to $3.7B in three months. The Huntington Beach company manufactures lower-cost unmanned aircraft, strike weapons and counter-drone systems, while expanding into solid rocket motors and jet-engine production to address critical defense supply-chain bottlenecks. - learn more
            • U First Capital participated in Positron AI’s $875M funding round, which was co-led by NEA, Atreides Management, Valor Equity Partners, Andra Capital, SemiAnalysis Capital and Jim Clark, valuing the AI chip startup at $5B. Positron will use the capital to bring its memory-focused Asimov processor and Titan server system to market, offering an energy-efficient alternative to GPUs for running AI models. - learn more
            • WndrCo participated in Harvey’s $550M funding round, co-led by Diffusion and Lightspeed Venture Partners, valuing the legal AI company at $15.5B. Harvey will use the capital to expand its team and advance its AI platform, which helps law firms, in-house legal departments and professional-services organizations build and manage proprietary legal intelligence. - learn more
            • Nolan Capital participated in Encoded Therapeutics’ $275M Series F, which was co-led by GV and another healthcare-focused fund and included several new and returning investors. The biotech will use the capital to advance its lead gene therapy for Dravet syndrome through pivotal studies, expand its manufacturing capabilities and prepare another treatment for post-amputation nerve pain for clinical testing in 2027. - learn more
            • UP Partners led Overroute’s $5.5M seed round to expand its AI-powered freight execution platform for large trucking fleets and logistics operators. The company’s AI agents automate load monitoring, exception management and freight coordination, helping fleets respond to disruptions and keep shipments moving with less manual work. - learn more
            • Patron Fund participated in System’s $20M funding round alongside Will Ventures, Vine, Courtside, Daybreak, SV Angel and RiverPark Ventures. The San Francisco company will use the capital to expand its vertically integrated peptide platform, which connects patients with licensed clinicians and personalized treatments from U.S. compounding pharmacies while emphasizing testing, traceability and regulatory compliance. - learn more
            • Alpha Edison led Onix’s $5M pre-seed round, with participation from Garage Capital, Ride Home Fund and strategic investors including UTA co-founder Jeremy Zimmer and Real Ventures co-founder JS Cournoyer. The Montreal startup will use the funding to develop its private AI platform, onboard more specialists and prepare for a public launch, offering personalized guidance built exclusively from licensed expert knowledge rather than information scraped from the internet. - learn more
            • Rebel Fund participated in VideoGen’s $3.3M seed round alongside Y Combinator, Lobster Capital, Stretford End Capital, Mento VC, Pioneer Fund and Decacorn VC. The San Francisco startup, which has reached more than 5M users across 190 countries, will use the funding to expand its team and grow its AI platform for producing editable, copyright-free videos. - learn more

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