emotive
In order to gauge the local startup scene and who’s leading the proverbial pack, we asked more than 30 leading L.A.-based investors for their take on the hottest firms in the region. They responded with more than two dozen venture-backed companies; three startups, in particular, rose above the rest as repeat nominees, while we've organized the rest by their amount of capital raised as of January, according to data from PitchBook. (We also asked VCs not to pick any of their own portfolio companies, and vetted the list to ensure they stuck to that rule.)
Without further ado, here are the 26 L.A. startups that VCs have their eyes on in 2022.
1. Whatnot ($225.4 million raised)
Whatnot was the name most often on the minds of L.A. venture investors—understandably, given its prolific fundraising year. Whatnot raised some $220 million across three separate funding rounds in 2021, on the way to a $1.5 billion valuation.
The Marina del Rey-based livestream shopping platform was founded by former GOAT product manager Logan Head and ex-Googler Grant LaFontaine. The startup made its name by providing a live auction platform for buying and selling collectables like rare Pokémon cards, and has since expanded into sports memorabilia, sneakers and apparel.
2. Boulevard ($40.3 million raised)
Boulevard’s backers include Santa Monica-based early-stage VC firm Bonfire Ventures, which focuses on B2B software startups. The Downtown-based company fits nicely within that thesis; Boulevard builds booking and payment software for salons and spas. The firm has worked with prominent brands such as Toni & Guy and HeyDay.
3. GOAT ($492.7 million)
GOAT launched in 2015 as a marketplace to help sneakerheads authenticate used Air Jordans and other collectible shoes. It has since grown at a prolific rate, expanding into apparel and accessories and exceeding $2 billion in merchandise sales in 2020. The startup sealed a $195 million funding round last summer that more than doubled its valuation, to $3.7 billion.
The Best of the Rest
VideoAmp ($578.6 raised)
Nielsen competitor VideoAmp gathers data on who's watching what across streaming services, traditional TV and social apps like YouTube. The company positions itself as an alternative to so-called "legacy" systems like Nielsen, which it says are "fragmented, riddled with complexity and inaccurate." In addition to venture funding, its total funding figure includes more than $165 million in debt financing.
Mythical Games ($269.4 million raised)
Seizing on the NFT craze, Mythical Games is building a platform that powers the growing realm of “play-to-earn games.” Backed by NBA legend Michael Jordan and Andreessen Horowitz, the Sherman Oaks-based startup’s partners include game publishers Abstraction, Creative Mobile and CCG Lab.
FloQast ($202 million raised)
FloQast founder Michael Whitmire says he got a “no” from more than 100 investors in the process of raising a seed round. Today, the accounting software company is considered a unicorn.
Nacelle ($70.8 million raised)
Nacelle produces docuseries, books, comedy albums and podcasts. The media company’s efforts include the Netflix travel series “Down To Earth with Zac Efron.”
Wave ($66 million raised)
A platform for virtual concerts, Wave has hosted performances by artists including Justin Bieber, Tinashe and The Weeknd. The company says it has raised $66 million to date from the likes of Warner Music and Tencent.
Papaya ($65.2 million raised)
Sherman Oaks-based Papaya looks to make it easier to pay “any” bill—from hospital bills to parking tickets—via its mobile app.
LeaseLock ($63.2 million raised)
Based in Marina del Rey, LeaseLock says it’s on a mission to eliminate security deposits for apartment renters.
Emotive ($58.1 million raised)
Emotive sells text message-focused marketing tools to ecommerce firms like underwear brand Parade and men's grooming company Beardbrand.
Dray Alliance ($55 million raised)
Based in Long Beach, Dray says its mission is to “modernize the logistics and trucking industry.” Its partners include Danish shipping company Maersk and toy maker Mattel.
Coco ($43 million raised)
Coco makes small pink robots on wheels (you may have seen them around town) that deliver food via a remote pilot. Its investors include Y Combinator and Silicon Valley Bank.
HiveWatch ($25 million raised)
HiveWatch develops physical security software. Its investors include former Twitter executive Dick Costollo and NBA star Steph Curry’s Penny Jar Capital.
Popshop ($24.5 million raised)
Whatnot competitor Popshop is betting that live-shopping is the future of ecommerce. The West Hollywood-based firm focuses on collectables such as trading cards and anime merchandise.
First Resonance ($19.4 million raised)
Founded by former SpaceX engineer Karan Talati, First Resonance runs a software platform for makers of electric cars and aerospace technology. Its clients include Santa Cruz-based air taxi company Joby Aviation and Alameda-based rocket company Astra.
Open Raven ($19 million raised)
Founded by Crowdstrike and Microsoft alums, Open Raven aims to protect user data. The cybersecurity firm’s investors include Kleiner Perkins and Upfront Ventures.
Fourthwall ($17 million raised)
When an actor faces the camera and speaks directly to the audience, it’s known as “breaking the fourth wall.” Named after the trope, Venice-based Fourthwall offers a website builder that’s designed for content creators.
The Non Fungible Token Company ($15 million raised)
The Non Fungible Token Company creates NFTs for musicians under the name Unblocked. Its investors include Jay Z’s Marcy Venture Partners and Shawn Mendez.
Safe Health Systems ($15 million raised)
Backed by Mayo Clinic Ventures, Safe Health develops telehealth software and offers tools for enterprises to launch their own health care apps.
Intro ($11.6 million raised)
Intro’s app lets you book video calls with experts—from celebrity stylists, to astrologists, to investors.
DASH Systems ($8.5 million raised)
With the tagline “Land the package, not the plane,” DASH Systems is a Hawthorne-based shipping company that builds hardware and software for automated airdrops.
Ettitude ($3.5 million raised)
With a focus on sustainability, Ettitude is a direct-to-consumer brand that sells bedding, bathroom textiles and sleepwear.
Afterparty ($3 million raised)
Along similar lines as Unblocked, Afterparty creates NFTs for artists and content creators such as Clay Perry and Tropix.
Heart to Heart ($0.75 million raised)
Heart to Heart is an audio-focused dating app that “lets you listen to the story behind the pictures in a profile.” Precursor Ventures led the pre-seed funding round.
Frigg (undisclosed)
Frigg makes hair and beauty products that contain cannabinoids such as CBD. The Valley Village-based company raised an undisclosed seed round in August.
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The L.A.-based company that allows ecommerce brands to text with their customers announced today that SaaS veteran and former investor Matt Cooley has been hired as the company's president and chief operating officer.
This comes about six months after the company's $50 million Series B round, which put the company at a valuation of $400 million. Cooley was also Emotive's first major investor back in 2019, since which he has acted as a go-to-market advisor to the company.
Matt Cooley is Emotive's new president and chief operating officer.
"It's almost like I've been interviewing for this job for two-and-a-half years now, which is fairly unique," said Cooley.
Emotive helps ecommerce brands such as underwear brand Parade and men's hair and skin care company Beardbrand have AI-fueled text conversations with their customers about their purchases. The conversations are designed to feel like a human-to-human interaction, even though they are largely operated by bots.
Since these conversations are two-way, it is distinct from the more familiar one-way text messages many companies send to customers on a regular basis to keep them engaged, notify them of deals and promos, etc. Emotive said their method creates more actual sales. The company boasts that of the customers reached via Emotive, about 8% to 10% make a purchase compared to 1% to 2% on one-way SMS messages.
When Cooley initially invested in Emotive, he said he was surprised this didn't already exist, as mobile phones take up so much space in our daily lives. Now that the pandemic has blown up ecommerce, he sees ecommerce and SMS as an even more perfect match.
Before joining Emotive, Cooley raked in a long record of work in the SaaS space, both as an executive for SaaS companies and as an investor. Software companies Cooley has worked for include New Relic, Mixpanel and, most recently, Skael.
Cooley also has a track record of successfully scaling companies; for example, New Relic scaled to $100 million in revenue while Cooley served on their initial leadership team, which led the company to an IPO in 2014. Emotive has seen 368% in year-over-year growth and currently predicts their annual revenue through subscriptions will go from $1 million to $100 million in the next five years.
"With the right execution, I think this company could be a $10 billion plus valuation in two to three years from now," said Cooley.
As president and COO, Cooley said that everything on the go-to-market side will be handled by him. This includes marketing, sales operations and customer success.
This is also Cooley's first time working with an L.A.-based startup, having primarily worked with San Francisco-based companies. He said that, while he is still unsure whether he will make the move down here, he is excited to be a part of the city's growing startup scene, even if it's from a distance
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The human-assisted AI marketing platform uses text messaging to engage customers and market ecommerce brands. Emotive announced the close of a Series B round led by CRV along with existing investors Mucker Capital, TenOneTen Ventures, and new investors Stripes and Vulcan Capital.
Emotive uses artificial intelligence guided by human assistance to text customers on ecommerce sites like Shopify, Magento and Woocommerce.
Rather than sending standard automated text blasts, Emotive's bot-aided platform starts conversations with customers to scale product recommendations and prevent them from abandoning items in their carts. The platform also shares new products and has interactive engagement like text quizzes and surveys.
According to Emotive chief executive Brian Zatulove, text messaging is one of consumers' most intimate communication channels and the personal connection Emotive provides turns 8% to 10% of those conversations into sales. In comparison, a standardized, impersonal newsletter blast has at most a 2% conversion rate.
The startup closed a $4.5 million Series A raise led by Mucker Capital just seven months ago, and as of today, it has raised $58 million in total. Emotive will use the capital to make several hires this year and plans to triple its workforce, opening new offices in Boston and Atlanta as it continues to develop its product.
Already, the company has brought on Honest Company executive Oleg Pylner as chief technology officer and Adam Waid, former vice president of global customer success at Salesloft, as chief customer officer.
Emotive isn't Zatulove's first company — he and his co-founder Zach Wise founded SaaS platform Reefer while still students at the University of Southern California. It is a loyalty platform for the cannabis industry, which used tablets in stores to enable customers could to sign up with their phone number to earn points. They noticed that salespeople in stores were using the exchange to build relationships with customers.
Though Reefer didn't use direct text marketing, they realized that online brands may not have salespeople to build the same relationships with customers. From Reefer, Zatulove and Wise moved on to create Emotive, which launched in October of 2018. The company saw 466% revenue growth over the last year, and Zatulove does not see it slowing down, adding that he believes the shift toward buying online will be permanent.
"With COVID, ecommerce thrived and accelerated the shift from traditional brick and mortar to online commerce," said Zatulove. "We definitely saw some tailwind... But, you know, separately from the shift online I think at Emotive we know how to grow our business and we have repeatable growth channels that we're going to continue to invest in."
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