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XWhat Are LA’s Hottest Startups of 2021? We Asked Top VCs to Rank Them
Ben Bergman
Ben Bergman is the newsroom's senior finance reporter. Previously he was a senior business reporter and host at KPCC, a senior producer at Gimlet Media, a producer at NPR's Morning Edition, and produced two investigative documentaries for KCET. He has been a frequent on-air contributor to business coverage on NPR and Marketplace and has written for The New York Times and Columbia Journalism Review. Ben was a 2017-2018 Knight-Bagehot Fellow in Economic and Business Journalism at Columbia Business School. In his free time, he enjoys skiing, playing poker, and cheering on The Seattle Seahawks.
Despite — or in many cases because of — the raging pandemic, 2020 was a great year for many tech startups. It turned out to be an ideal time to be in the video game business, developing a streaming ecommerce platform for Gen Z, or helping restaurants with their online ordering.
But which companies in Southern California had the best year? That is highly subjective of course. But in an attempt to highlight who's hot, we asked dozens of the region's top VCs to weigh in.
We wanted to know what companies they wish they would have invested in if they could go back and do it all over again.
Startups were ranked by how many votes each received. In the case of a tie, companies were listed in order of capital raised. The list illustrates how rapidly things move in startup land. One of the hottest startups had not even started when 2020 began. A number doubled or even 16x'd their valuation in the span of a few short months.
To divvy things up, we delineated between companies that have raised Series A funding or later and younger pre-seed or seed startups.
Not surprisingly, many of the hottest companies have been big beneficiaries of the stay-at-home economy.
PopShop Live, a red-hot QVC for Gen Z headquartered out of a WeWork on San Vicente Boulevard, got the most votes. Interestingly, the streaming ecommerce platform barely made it onto the Series A list because it raised its Series A only last month. Top Sand Hill Road firms Andreessen Horowitz and Lightspeed Venture Partners reportedly competed ferociously for who would lead the round but lost out to Benchmark, which was an early investor in eBay and Uber. The round valued PopShop Live at $100 million, way up from the $6 million valuation it raised at only five months prior.
Scopely, now one of the most valuable tech companies in Los Angeles, was also a top vote getter.
The Culver City mobile gaming unicorn raised $340 million in Series E funding in October at a $3.3 billion valuation, which nearly doubled the company's $1.7 billion post-money valuation from March. It is no coincidence that that was the same month stay-at-home orders began as Scopely has benefited from bored consumers staying on their couch and playing ScrabbleGo or Marvel Strike Force.
The company's success is especially welcome news to seed investors Greycroft, The Chernin Group and TenOneTen ventures, who got in at a $40 million post valuation in 2012. Upfront Ventures, BAM Ventures and M13 joined the 2018 Series C at a $710 post-money valuation.
Softbank-backed Ordermark, which flew more under the radar, also topped the list. The company's online ordering platform became a necessity for restaurants forced to close their dining rooms during the pandemic and raised $120 million in Series C funding in October.
On the seed side, two very different startups stood out. There was Pipe, which enables companies with recurring revenues to tap into their deferred cash flows with an instant cash advance, and Clash App, Inc., a TikTok alternative launched by a former employee of the social network in August.
We will have the list of Southern California's top seed startups out tomorrow.
Hottest
PopShop Live ($100 million)
The live-streaming shopping channel created by Danielle Lin reportedly found itself in the middle of a venture capital bidding war this year. Benchmark eventually won out leading a Series A round, vaulting the app at a $100 million valuation. The Los Angeles-based platform has been likened to QVC for Gen Z and it's part of a new wave of ecommerce that has found broader appeal during the pandemic. Google, Amazon and YouTube have launched live shopping features and other venture-backed startups like Los Angeles-based NTWRK have popped up.
Boiling
Scopely ($3.3 billion)
One of the most valuable Southern California tech startups with a $3.3 billion valuation, the Culver City mobile game unicorn has benefitted from a booming gaming market that has flourished in this stay-at-home economy. Scopely offers free mobile games and its roster includes "Marvel Strike Force," "Star Trek Fleet Command" and "Yahtzee with Buddies." In October the company raised a $340 million Series E round backed by Wellington Management, NewView Capital and TSG Consumer Partners, among others fueling speculation that it was on its road to an IPO. Co-CEO Walter Driver has said that he doesn't have immediate plans to go public.
Ordermark ($70 million)
The coronavirus has forced the closure of many dining rooms, making Ordermark all the more sought after by restaurants needing a way to handle online orders. Co-founder and CEO Alex Canter started the business in 2017, which recently rang in more than $1 billion in sales. Ordermark secured $120 million in Series C funding by Softbank Vision Fund 2 in October that it will use to bring more restaurants online. The company's Nextbite, a virtual restaurant business that allows kitchens to add delivery-only brands such as HotBox from rapper Wiz Khalifa to their existing space through Ordermark, is also gaining traction.
Simmering
Cameo ($300 million)
Cameo, which launched three years ago, had its breakout year in 2020 as C-list celebrities like Brian Baumgartner banked over a million dollars from creating customized videos for fans. In the sincerest form of flattery, Facebook is reportedly launching a feature that sounds a lot like Cameo. Even though the company is still technically headquartered in Chicago, we included Cameo because CEO Steven Galanis and much of the senior team moved to L.A. during the pandemic and say they plan to continue running the company from here for the foreseeable future.
Mothership ($64 million)
Co-founded by CEO Aaron Peck, Mothership provides freight forwarding services intended to streamline the shipping experience. The company's tracking technologies connect shippers with nearby truck drivers to speed up the delivery process. It raised $16 million in Series A venture funding last year, driving the platform to a $48 million pre-money valuation.
Nacelle ($6.7 million)
Founded in 2019, Nacelle's ecommerce platform helps retailers improve conversion rates and decrease loading speeds for their sites. The software integrates with Shopify and other services, offering payment platforms and analytics integration, among dozens of services. Nacelle raised about $4.8 million earlier this year with angel investors that included Shopify's Jamie Sutton, Klaviyo CEO Andrew Bialecki and Attentive CEO Brian Long.
Boulevard ($30 million)
Matt Danna and Sean Stavropoulos came up with Boulevard when an impatient Stavropoulos was frustrated wasting hours to book a hair appointment. Their four-year-old salon booking and payment service is now used by some of Los Angeles' best-known hairdressers. Last month, the two secured a $27 million Series B round co-led by Index Ventures and Toba Capital. Other investors include VMG Partners, Bonfire Ventures, Ludlow Ventures and BoxGroup.
CloudKitchens ($5.3 billion)
Uber co-founder Travis Kalanick CloudKitchens rents out commissary space to prepare food for delivery. And as the pandemic has fueled at-home delivery, the company has been gobbling up real estate. The commissaries operate akin to WeWork for the culinary world and allow drivers to easily park and pick-up orders as the delivery market has soared during pandemic. Last year, it raised $400 million from Saudi Arabia's colossal sovereign wealth fund.
GOAT ($1.5 billion)
Founded by college buddies five years ago, GOAT tapped into the massive sneaker resale market with a platform that "authenticates" shoes. The Culver City-based company has since expanded into apparel and accessories and states that it has 20 million members. Last year, Foot Locker sunk a $100 million minority investment into 1661 Inc., better known as Goat. And this fall it landed another $100 million Series E round bankrolled by Dan Sundeheim's D1 Capital Partners.
Savage X Fenty
The lingerie company co-founded by pop singer Rihanna in 2018 is noted for its inclusivity of body shapes and sizes. It has raised over $70 million, but The New York Times' DealBook newsletter recently reported that it's been on the hunt for $100 million in funds to expand into active wear. The company generates about $150 million in revenue, but is not yet profitable, according to the report. It became the focus of a consumer watchdog investigation after being accused of "deceptive marketing" for a monthly membership program.
Warming Up
FabFitFun ($930 million)
The lifestyle company provides customized personal subscription box services every three months with full size products. Started in 2010 by Daniel Broukhim, Michael Broukhim, Sam Teller and Katie Rosen Kitchens, it now boasts more than one million members. Last year, the company raised $80 million in a Series A round led by Kleiner Perkins last year and appears to be preparing for an eventual IPO as it slims down costs and refocuses on its high value products.
Dave ($1 billion)
Launched in 2016, the finance management tool helps consumers to avoid overdrafts, provides paycheck advances and assists in budgeting. Last year, it began to roll out a digital bank account that was so popular that two million users signed up for a spot on the waitlist. The company, run by co-founder Jason Wilk, has raised $186 million in venture capital and counts billionaire Mark Cuban as an early investor and board member. Other backers include Playa Vista-based Chernin Group.
Sure ($59 million)
SURE offers multiple technology products to major insurance brands — its platform can host everything from renter's insurance to covering baggage, so customers never have to leave an agency's website. It also offers its platform to ecommerce marketplaces, embedding third-party insurance protections for customers to purchase all on the same webpage. Founded in 2014, the Santa Monica-based startup last raised an $8 million Series A round led by IA Capital in 2017.
Zest AI ($90 million)
Founded in 2009 by former Google CIO Douglas Merrill and ex-Sears executive Shawn Budde, Zest AI provides AI-powered credit underwriting. It helps banks and other lenders identify borrowers looking beyond traditional credit scores. It claims to improve approval rates while decreasing chargeoffs. The company uses models that aim to make the lending more transparent and less biased. This fall the company raised $15 million from Insight Partners, MicroVentures and other undisclosed investors, putting its pre-money valuation at $75 million, according to PItchbook.
PlayVS
Santa Monica-based PlayVS provides the technological and organizational infrastructure for high school esports leagues. The pandemic has helped the company further raise its profile as traditional sports teams have been benched. Founded in early 2018, PlayVS employs 46 people and has raised over $100 million. In addition to partnering with key educational institutions, it also has partnerships with major game publishers such as Riot and Epic Games.
Tapcart ($40 million)
A SaaS platform helps Shopify brands create mobile shopping apps. The marketing software saw shopping activity jump 50% over 90 days as the pandemic walloped traditional retailers. Founded by Eric Netsch and Sina Mobasser, the company raised a $10 million Series A round led by SignalFire, bringing the total raise to $15 million.
Papaya ($31.8 million)
Papaya lets customers pay any bill from their mobile devices just by taking a picture of it. The mobile app touts the app's ease-of-use as a way to cut down on inbound bill calls and increase customer payments. Founded by Patrick Kann and Jason Metzler, the company has raised $25 million, most recently a S10 million round of convertible debt financing from Fika Ventures, Idealab and F-Prime Capital Partners.
Floqast ($250 million)
FloQast is a management software that integrates enterprise resource planning software with checklists and Excel to manage bookkeeping. The cloud-based software company claims its system helps close the books up to three days faster. It is used by accounting departments at Lyft, Twilio, Zoom and The Golden State Warriors. In January, it raised $40 million in Series C funding led by Norwest Venture Partners to bring the total raise to $92.8 million.
Brainbase ($26.5 million)
The company's rights management platform expedites licensing payments and tracks partnership and sponsorship agreements. It counts BuzzFeed, the Vincent Van Gogh Museum and Sanrio (of Hello Kitty and friends fame) among its clients. In May it announced $8 million in Series A financing led by Bessemer Venture Partners and Nosara Capital, bringing the total raised to $12 million.
OpenPath ($28 million)
The Los Angeles-based company provides a touchless entry system that uses individuals cell phones to help with identification instead of a key card. The company offers a subscription for the cloud-enabled software that allows companies to help implement safety measures and it said demand has grown amid the pandemic. Founded by James Segil and Alex Kazerani the company raised $36 million led by Greycroft earlier this year, bringing its total funding to $63 million.
FightCamp ($2.5 million)
FightCamp is an interactive home workout system that turns your space into a boxing ring with a free standing bag, boxing gloves and punch trackers. The company is riding the wave of at-home fitness offerings including Peloton, Mirror and Zwift that have taken off during the pandemic as gyms closed. The company has raised $4.3 million to date.
Numerade
The Santa Monica-based company provides video and interactive content for education in math, science, economics and standardized test prep. Founded in 2018 by Nhon Ma and Alex Lee, who previously founded Tutorcast, an online tutoring service, the company gathers post-graduate educated instructors to create video lessons for online learning.
Our Place ($32.5 million)
The creator of a pan with a cult following on social media, this Los Angeles-based startup designs and retails cookware and dinnerware. Founded by Amir Tehrani, Zach Rosner and Shiza Shahid, the company completed its Series A funding earlier this year, bringing its total raised to date to $10 million.
Tala ($560 million)
For customers that have no formal credit or banking history, this company's application promises more financial access, choice and control. It gathers data to create a credit score that can be used to instantly underwrite and disburse loans ranging from $10 to $500. Co-founded by Shivani Siroya and Jonathan Blackwell, Tala has raised $217.2 million to date. Its investors include PayPal Ventures, Lowercase Capital and Data Collective.
ServiceTitan ($2.25 billion)
Founded in 2007 by chief executive Ara Mahdessian and president Vahe Kuzoyan, ServiceTitan operates software that helps residential home contractors grow their businesses. It provides businesses tools like customer relationship management and accounting integration to streamline operations. The company closed a $73.82 million Series E funding round from undisclosed investors earlier this year.
100 Thieves ($160 million)
Founded in 2017 by former professional "Call of Duty" player Matthew Haag, 100 Thieves manages esports competitions in major titles including "Counter Strike Global Offensive" and "League of Legends." The company also produces apparel and merchandise, opening a physical store and training ground called the "Cash App Compound" in collaboration with Fortnite earlier this year. The company has raised $60 million to date, from investors including Salesforce CEO Marc Benioff and Aubrey Graham, better known as the rapper Drake.
Emotive ($16.5 million)
This AI-powered customer service platform automates text conversations between customers and businesses to increase sales. Emotive uses their sales team to verify questions, distinguishing it from other bot-driven marketing services, according to the company. The company was founded in 2018 by Brian Zatulove and Zachary Wise, who serve as the chief executive and the chief operating officer, respectively. It has raised $6.65 million to date, from Floodgate Fund and TenOneTen Ventures.
Everytable ($33 million)
Created by former hedge fund trader Sam Polk, the Los Angeles-based startup wants to be a healthy fast food chain. It prices its healthy pre-packaged meals around $5 in underserved communities while costing more in other neighborhoods with the goal of reducing so-called food deserts in low-income neighborhoods. It also offers a subscription delivery service. The company recently closed a $16 million Series B round led by Creadev along with Kaiser Permanente Ventures.
Lead art by Candice Navi.
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Ben Bergman
Ben Bergman is the newsroom's senior finance reporter. Previously he was a senior business reporter and host at KPCC, a senior producer at Gimlet Media, a producer at NPR's Morning Edition, and produced two investigative documentaries for KCET. He has been a frequent on-air contributor to business coverage on NPR and Marketplace and has written for The New York Times and Columbia Journalism Review. Ben was a 2017-2018 Knight-Bagehot Fellow in Economic and Business Journalism at Columbia Business School. In his free time, he enjoys skiing, playing poker, and cheering on The Seattle Seahawks.
https://twitter.com/thebenbergman
ben@dot.la
Big Wins: Dodgers Take the Title ⚾, ChatGPT Levels Up🚀
06:54 AM | November 01, 2024
🔦 Spotlight
Happy Friday, LA! It’s been a week of big wins, on and off the field. 🎉
⚾️ First up, let’s talk Dodgers. With a thrilling 7-6 comeback victory over the Yankees in Game 5, the Dodgers clinched their eighth World Series title, their first since 2020. The city is buzzing, and fans are ready to celebrate! A parade kicks off this morning at 11 a.m., starting at City Hall and winding down to Flower Street, with a ticketed celebration at Dodger Stadium for those wanting to keep the festivities going.
Image Source: Dodgers
💻 Meanwhile, in the tech, OpenAI just rolled out a game-changing update for ChatGPT. Plus and Enterprise users can now access real-time internet search, powered by Microsoft Bing, bringing ChatGPT's responses fully up-to-date. This means users can now ask about the latest news, hotspots, or recent LA startup announcements, and ChatGPT will pull in fresh, relevant answers directly from the web. Previously limited to information up to 2021, ChatGPT’s new browsing capabilities make it a valuable digital assistant for anyone needing real-time insights in fast-paced industries like tech and entertainment.
Image Source: ChatGPT
🔍 The real-time search feature also includes “Browse with Bing,” allowing ChatGPT to source information from multiple sites for detailed answers to complex questions. Whether you’re exploring the latest venture capital trends in LA or curious about the best local spots, ChatGPT’s new browsing power helps you stay ahead with the latest info. This leap forward in AI functionality makes ChatGPT even more versatile and powerful for everyone, from business owners to everyday users.
From the Dodgers’ World Series win to OpenAI’s latest ChatGPT update, there’s a lot to celebrate in LA this week. Here’s to champions, innovation, and a city that’s always pushing boundaries. 🌆✨
🤝 Venture Deals
LA Companies
- Final Boss Sour, a Los Angeles-based gaming-themed snack company specializing in healthier sour snacks, has raised a $3M Seed funding round led by Science Inc. to expand its product offerings and operational capabilities. - learn more
LA Venture Funds
- Smash Capital led a $50M Series B round for Read AI, a productivity-focused AI company, bringing its total funding to $81M. The company offers a platform that enhances meeting efficiency through features like note-taking, summarization, and transcription. Additionally, Read AI introduced "Read AI for Gmail," a free Chrome extension that integrates information from various applications, reducing the need to switch between apps. The funds will be used to increase the company's headcount in engineering, data science, and business teams. - learn more
- Distributed Global participated in a $25M funding round for Nillion, a company that provides decentralized privacy solutions designed to secure sensitive data using advanced technologies like secure multi-party computation. - learn more
- Alexandria Venture Investments and Tachyon Ventures participated in a $115M Series A funding round for Axonis Therapeutics, a Boston-based biotechnology company developing innovative medicines targeting KCC2, a key mediator of brain inhibition, to treat neurological disorders. - learn more
- Act One Ventures participated in a $5M Seed funding round for Latii, a construction materials supply chain startup, to enhance its platform that connects contractors with suppliers, aiming to streamline procurement processes and reduce costs in the construction industry. - learn more
- F4 Fund participated in a $3M Seed funding round for Final Boss Sour, a Los Angeles-based gaming-themed snack company specializing in healthier sour snacks. - learn more
- SmartGateVC participated in a pre-seed funding round for Ritual Dental, a company revolutionizing dental care by integrating advanced technology and microbiome science to provide personalized, preventive treatments. - learn more
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Wonder Dynamics: Redefining the Animation Landscape
09:40 AM | November 08, 2024
Wonder Animation
🔦 Spotlight
Happy Friday, LA!
Wonder Dynamics, a Los Angeles-based company founded by Tye Sheridan and Nikola Todorovic, has launched Wonder Animation, a beta feature that is poised to transform the landscape of video production. Acquired by Autodesk in May, Wonder Dynamics is leveraging this innovative tool, which harnesses artificial intelligence to turn standard video footage into captivating 3D animated scenes, making sophisticated animation techniques more accessible to filmmakers of all budgets.
Wonder Animation allows creators to shoot from multiple angles, with the AI reconstructing these shots into a dynamic 3D space. This functionality enables filmmakers to seamlessly blend live-action scenes with interactive virtual environments while preserving original camera movements. Users can customize various aspects, including animations, characters, lighting, and camera tracking data, and the tool integrates smoothly with popular software like Maya, Blender, and Unreal Engine.
What sets Wonder Animation apart is its emphasis on artistic control. Unlike many AI tools that impose rigid outcomes, this feature empowers creators to guide their projects, ensuring that their unique style remains front and center.
As the boundary between video and 3D animation blurs, Wonder Animation invites creators to experiment and innovate in exciting ways. This development marks a significant step forward in digital storytelling, democratizing access to high-quality visual effects and making sophisticated animation achievable for a broader range of filmmakers.
With the global animation market projected to reach approximately $400 billion in 2024 and grow to over $587 billion by 2030—reflecting a compound annual growth rate (CAGR) of about 5%—tools like Wonder Animation are more relevant than ever. This growth underscores the increasing demand for animated content and highlights the necessity of innovative solutions to meet filmmakers’ evolving needs. For those looking to elevate their storytelling, Wonder Animation may just be the key to unlocking new creative horizons. According to Statista, this upward trend in the animation market emphasizes the significant opportunities ahead.
🤝 Venture Deals
LA Companies
- Evite, an online platform enabling users to design, send, and manage digital invitations and eCards with tools for event organization and guest tracking, has received a strategic growth investment from Francisco Partners to accelerate innovation and expand its product offerings. - learn more
LA Venture Funds
- F4 Fund participated in a $4.1M Pre-Seed funding round for Further, a platform designed to help first-time homebuyers determine how much home they can afford by providing personalized insights on interest rates and lender requirements, giving users a clear view of their purchasing power. - learn more
- Alexandria Venture Investments participated in a $10M Seed funding round for CrossBridge Bio, a company focused on developing advanced dual-payload antibody-drug conjugate (ADC) therapies, with the funds supporting preclinical development of its next-generation cancer treatments. - learn more
- Clocktower Ventures participated in a $5.6M Series A funding round for Morada Uno, a startup in Mexico focused on making apartment rentals easier by providing a platform that connects tenants with landlords and simplifies processes like lease agreements and rent payments. - learn more
- Skyview Capital participated in a $5M Series A funding round for Web3 chain game A-World, a tower defense battle game set in the metaverse on the BNB Chain, where players build hero towers to defeat waves of monsters. - learn more
LA Exits
- Drive Hospitality, a leading provider of personalized parking and hospitality services, including valet, concierge, bell services, parking management, and advanced technology integration, has been acquired by Propark Mobility. - learn more
- Vebu Labs, located in El Segundo and specializing in custom automation solutions for the food industry—including the innovative 'Autocado' system that automates the peeling, coring, and scooping of avocados to enhance operational efficiency—will be acquired by Serve Robotics. - learn more
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