A work collaboration and inventory management software for aerospace manufacturers — including rocket-part maker Phase Four — First Resonance is poised to take off.
The startup raised a $3.5 million Series A on Wednesday, and will use the funding to expand its footprint in Los Angeles.
Eventually, the downtown-based company wants to be the software behind a new wave of mobility, from jetpacks to air taxis.
First Resonance initially targeted aerospace companies, but has since expanded to other industries, including automotive and robotics. CEO Karan Talati said the company eventually plans to help build air taxis.
"We're bringing on companies even right now that start to get into the kind of blurry lines of what the future of mobility looks like," Talati said.
A screenshot of First Resonance's inventory management software.
The new round of funding will allow the company to double — "if not triple" — its headcount by the end of this quarter and develop its main product, the Ion factory management software, which allows manufacturers to automate and streamline operations.
The funding round was led by Blue Bear Capital, a Beverly Hills-based venture capital firm that looks to invest in automation, artificial intelligence and the industrialization of renewable energy.
First Resonance has now raised a total of $5.3 million since its 2018 launch.
The startup began working remotely last March. Its six-person team is made up of engineers that come from top manufacturers in town including SpaceX, Toyota and NASA.
Blue Bear Capital partners Ernst Sack and Vaughn Blake decided to invest in First Resonance because they saw the long-tail potential for First Resonance's software as the market for electric cars soar and the space market expands.
First Resonance CEO Karan Talati
Manufacturing in both of those areas requires a complex set of processes.
"At the global level, the revolution of next-gen manufacturing is critical to solving the climate and mobility challenges that we'll be facing in the years ahead," Blake said. "First Resonance' software ignites that revolution by enabling the manufacturing workflows required to electrify transport, reach orbit and propel satellites."
The software lets factories automate their manufacturing and manage their supply chains, freeing up more time for engineers to focus on futuristic designs, Talati said. It also uses data visualization and analytics to help builders troubleshoot design issues.
First Resonance is already backed by notable firms including Santa Monica-based Wavemaker Partners and Westwood-based Fika Ventures, but Blue Bear has a foothold in Texas, where aerospace activity and manufacturing are exploding, giving it an edge over other firms. Elon Musk has reportedly moved to Austin, and some of SpaceX's manufacturing has migrated to Boca Chica Village in Texas.
"It's been really great [to access] new customer acquisition or networks, with their extended team in San Francisco as well as Texas," Talati said, noting at First Resonance has plans to expand far beyond Los Angeles' borders.
Los Angeles is home to around 5,000 startups, the majority of which are in their young, formative years.
Which of those thousands are poised for a breakout in 2021? We asked dozens of L.A.'s top VCs to weigh in. We wanted to know which companies they would have invested in if they could go back and do it all over again.
Yesterday, our investors picked their favorite Series-A or later startups, and not surprisingly there was more consensus, with familiar names like PopShop Live and Scopely leading the way.
But the most lucrative returns come from identifying companies in their infancy, as recent blockbuster IPOs vividly demonstrate. For instance, Sequoia's $600,000 seed check to Airbnb in 2009 accounted for 70% of its shares in the company and helped it get into competitive later rounds. When the vacation rental service went public last month, Sequoia's stake was worth $4.8 billion.
What will be the next breakout? The complete list is below and is ranked in random order except for the first three, which stood out by virtue of getting multiple votes: Pipe enables companies with recurring revenues to tap into their deferred cash flows with an instant cash advance. Clash App, Inc., is a TikTok alternative launched by a former employee of the social network in August. And XCLAIM allows bankruptcy claims to be digitally traded.
Pipe provides financial services to help cloud service companies tap into their deferred cash flows, allowing them to continue growing without taking on debt or giving up ownership. For subscription-based businesses, this makes it "as if all of your customers converted to annual plans overnight," according to the company.
Founded by Harry Hurst, Josh Mangel and Zain Allarakhia, the company raised $66 million of seed funding earlier this year in a deal led by Craft Ventures and Fin Venture Capital.
Created by former Vine-r Brendon McNerney and entrepreneur and marketing expert P.J. Leimgruber, Clash App is a short form video platform similar to TikTok, but without built-in sound libraries. It's geared toward empowering creators with innovative monetization options and inclusive communities.
XCLAIM has created an electronic platform where bankruptcy claims that take a notoriously long time to process can be digitally traded. Founded in 2018 by Matthew Sedigh, who has operated in the corporate restructuring field for more than a decade, the company says "rather than wait years for the bankruptcy court process to issue payment distributions, creditors can now access immediate liquidity by selling their claim to interested buyers." Earlier this year, it raised a $4 million seed round led from Luma Launch, First Round Capital and Freestyle Capital.
Freck Beauty manufactures beauty products intended to make the user feel seen. Remi Brixton, the company's chief executive officer, founded the startup in 2015 when she was in search of a freckle makeup product. When she couldn't find one, she launched her own, the FRECK OG. The East Los Angeles-based company raised an undisclosed amount of seed funding in a deal led by KarpReilly and Stage 1 Fund earlier this year.
The Skills wants to be the master class on sports and life. The Los Angeles-based startup launched two months ago and offers classes from gold medal Olympians — including swimmer Michael Phelps and volleyball player Kerri Walsh Jennings — and Grand Slam tennis Champion Maria Sharapova. In December, it closed a $5 million seed round backed by Boston-based Will Ventures, Global Founders Capital, 8VC, Maveron, Hack VC and Correlation VC.
Founded by Shaun Cooley, former chief technology officer of Cisco's Internet-of-Things (IoT) and Industries division, Mapped provides IoT services in El Segundo.
The company raised $3 million of seed funding in a deal led by Greycroft earlier this year, putting its pre-money valuation at $9 million.
Created in 2016 by Geoffrey Michener, Dataplor indexes micro-businesses in Mexico (and will soon be expanding to other countries in Central and South America) and sells the data to larger companies.The company relies on contractors in those countries to collect the information from local businesses. It raised $4 million from ff Venture Capital, Quest Venture Partners and Space Capital earlier this year and expects to use it to expand into more Latin American countries.
Launched by serial entrepreneur Joe Bayen, Grow Credit helps customers improve their credit score by providing credit for subscription services like Netflix and Spotify. Their MasterCard can help consumers with thin or damaged credit scores and the small line of credit can be upgraded for a fee. The company closed a $2 million seed round earlier this year with participation from Mucker Labs.
The two-year-old Santa Monica-based company has seen business boom during the pandemic as retail stores shut down and online orders surged. The direct-to-consumer outdoor furniture brand uses backyards as showrooms and raised $4.3 million in a seed round earlier this year led by Mucker Capital. Founded by Jake Liu and Terry Lin, a former designer at Pottery Barn, Outer aims to appeal to Restoration Hardware and Pottery Barn shoppers.
A livestreaming reseller of collectibles like FunkoPop vinyl figurines, Pokémon cards and sports cards, WhatNot taps into a growing retail trend and promises that the collectibles are verified, much like sneaker reseller GOAT.
The startup secured $4 million in seed funding this month from Scribble Ventures, Wonder Ventures, Operator Partners, Y Combinator, Liquid 2 Ventures, Twenty Two Ventures and other investors. The company plans to use the funds to expand into video games, comics books, designer toys and vintage fashion.
Fourthwall is the developer of an internet platform that helps content creators launch fully-branded websites focused on interacting with fans. Their website tag phrase is "Make a living doing what you love," which is complemented by their model, which provides creators 100% ownership of their website and brand.
Founded by Walker Williams and Will Baumann, the company has raised $4 million to date, from investors Defy Partners, Lightspeed Venture Partners and Initialized Capital Management.
Shop LatinX calls itself the "leading beauty, fashion, and lifestyle ecommerce designed by and made for Latinas." The brainchild of two Los-Angeles-based Latinas, Brittany Chavez and Raquel Garcia launched their website before Black Friday in 2016. It features more than 200 brands.
Founded by former SpaceX software engineer Karan Talati and Neal Sarraf, First Resonance promises to ease the workflow for manufactures with software intended to provide greater visibility into production and test product development lifecycle. The company raised $1.75 million of seed funding last year from Wavemaker Partners, Stage Venture Partners and PLG Ventures, among clothes.
Vurbl offers curated, one-stop-shop of what it calls the best audio on the internet, which can include podcasts but also goes well beyond that from religious sermons to court arguments. The new platform founded by CEO Audra Gold is being built with the $1.3 million pre-seed round Vurbl closed in September led by AlphaEdison with participation from Halogen Ventures and Ten13.
Former Disney executive Chris Williams founded the studio that produces family-focused content from YouTube stars. This year it launched clock.work, an advertising agency designed to help major brands reach kids. Investors include Viacom, Greycroft, Third Wave Digital and United Talent Agency, along with strategic angels including Robert Downey Jr. and Jon Landau.
The app allows renters to see and share apartments that will soon be available before they're listed — reducing the time properties sit vacant and potentially heating up competition among apartment hunters. It launched earlier this year. The company has $2.8 million in seed funding led by David Sacks' Craft Ventures along with Abstract VC, Wonder Ventures and angel investor Spencer Rascoff, co-founder of Zillow and dot.LA.
The audio-based social platform promises to be the spot for "live, supportive, feel good conversations—just like hopping on the phone with a friend when you need it most." It lets people start a conversation around any topic or join by listening. Quilt raised an undisclosed amount of venture funding from Freestyle Capital in 2019.
Founded by Abhi Nayar, Chris Garwood and Igor Licthmann, Tonebase provides high-level music education online. Yale School of Music alumnus Garwood and Lichtman told their alma mater that it built with the idea that it was "a way for people everywhere to learn from the very best musicians around the world — individuals who, due to their busy performing and teaching careers, are traditionally accessible to only a select few." The company has raised an undisclosed amount from Launch fund, e.ventures and other undisclosed last May.
Launched in 2013 by Jeff Su, Yu-Han Chang and Rajiv Maheswaran, Second Spectrum already has deals with the NBA and English Premier League. This year it scored another one with Major League Soccer to use its optical tracking system to evaluate and analyze performance.
Second Spectrum puts their tracking cameras inside the stadium. Machine learning and AI-powered analytics provide detailed data that helps coaches and others better understand the game from player speed and deceleration to shot velocity in near real time. That technology can also be used on broadcast platforms to give fans more insight. The company raised about $20 million backed by CAA Ventures, Raine Ventures and The Chernin Group in 2018.
Founded by CEO Taylor Nieman, Shaun Merritt and Brandon Dietz, Toucan is a Chrome browser extension that lets people learn a new language. It scans websites you visit and translates some words into the language you want to learn. The Santa Monica-based company most recently raised a $3 million round backed by GSV Ventures, Amplifyher Ventures, and Wonder Ventures, among others.
Created by former SpaceX engineers, Serve Automation aims to change the way foods get delivered. It has secured $7 million in a seed round and is operating in stealth mode.
Lead art by Candice Navi.
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As COVID-19 layoffs cost friends and families jobs, Liora Simozar, a product manager at Clutter Inc., and her friend Ranika Kejriwal, put together a crowdsourced list of open tech and startup jobs in Los Angeles.
Simozar and Kejriwal, who head the local chapter of Women in Product and both have jobs, started their nascent effort in a Slack group in early March figuring many of their 500 members would be impacted. Eventually, they blasted it out to hundreds of their contacts and now have nearly 200 local employers looking for candidates on their crowdsourced list. Similar efforts have been playing out across the tech world as others release lists among friends and colleagues.
"It's tough being a laid off, you go through a lot of different emotions," said Simozar. "I felt a real sense of urgency because when you are losing your job, you are losing your health care benefits and this is a health crisis."
More than 26 million people have filed for unemployment since the pandemic halted normal life. Last week, USC researchers estimated 1.3 million workers in Los Angeles County alone have lost their job since mid-March. Startups and tech companies have seen a reversal of fortunes, cutting jobs that once seemed secure and eliminating six-figure positions. But, the downturn has helped some big tech and smaller thriving companies pick up hard-to-catch talent.
The spreadsheet by Simozar and Kejriwal, who works on Tinder's product team, posts positions for engineers, product designers and data analytics from companies like Jessica Alba's Honest Company, the board game maker Exploding Kittens and Northrupp Gruman. The lists are being shared on LinkedIn, among friends and within tight-knit networks.
"I think a lot of people are encouraged by how many companies are still hiring through the crisis," she said.
One advantage to the list the two put together is that its local companies, as opposed to other ones that include jobs across the county.
"We got more high-quality candidates from this list than from LinkedIn or AngelsList," said Sam Byker, founder and chief executive of downtown-based Atticus, a tech firm aimed at making legal representation more accessible. The firm closed a $4.5 million seed round in December and is more than doubling its 8-person staff. The pandemic has stoked demand for the firm's services. A lot of the company's work is helping disabled people qualify for government benefits and demand tends to spike during downturns.
"It is always hard for us to find candidates that are the right fit," he said. "We are on a lot of platforms but at the end of the day, it was that google sheet that got many of our best applicants."
A few candidates who reached out through the sheet are going through the interview process. "There are a few folks that we are really excited about," he said.
Karan Talati said he turned to the list when he had to layoff two of his eight employees at First Resonance, a small startup that builds software for aerospace manufacturing.
"We have had to make these hard decisions that we don't want to," he said. "Most of our investors have been spending time with portfolio to make sure they are set for surviving and that means cost cutting where needed and unfortunately that means people."
He offered the employees severance and insurance, but he has been sending them leads and lists like this one in hopes that his former employees would find a job.
"If we have to part ways with people that we care about, hopefully can land as quickly as possible," he said.
Jerry Nickelsburg, the director of UCLA's Anderson Forecast, said the good news is that the region's tech sector — which spans an array of industries from logistics to restaurants to software — will likely recover.
"Are there firms in every sector that are struggling and have laid off staff? The answer is yes, but there also are firms in many sectors in finance, in some of the tech businesses, we see it in the distribution of goods that have actually added some employees. Still, not nearly enough," he said. "The tech sector has been growing and growing very rapidly in L.A., and then greater L.A. and Orange County as well over the last decade. Our expectation is that that will continue."
Meanwhile, even those lucky enough to find jobs after a layoff have a bit of survivor's guilt.
"The reality is, I feel super guilty that I gave notice right before layoffs happened, which ended up saving me from said layoffs," wrote recruiter Ashlyn McIntosh about her new job. "Here's the thing my amazing former manager and now friend for life Darren Stewart reminded me of: I hire people for a living. If I keep going, more people have jobs, meaning less people are living in anxiety."
Just days before the posting she watched her 17-person recruiting and human resources team at PatientPop dwindle to three after the company laid off about a quarter of its staff in a round of COVID-19 layoffs, she said. The data science team was also wiped out she said, noting that those are difficult positions to fill.
The company did not respond to a request for comment.
McIntosh who now works at TeleSign said she's seen a rush of applicants to jobs. Other recruiters, who she once competed against, are now calling her and sharing job applicants that they would have guarded before the pandemic. Hard to fill positions now have candidates clamoring.
The dire circumstances have reshuffled the job market for those with the right skills and it has also opened up talent that wasn't accessible before.
Matt Alling, who runs headhunting firm Marius Group, said that in some ways he has felt like a first responder dealing with so many people that have been laid off. Although about 80% of his clients froze hiring, the rest are hiring more than usual and keeping him busy.
"If we averaged 30 new candidates a day, now we are imputing 200 people a day," he said. "We have been working double time to connect with really good candidates."
Companies like Chinese-owned startup ByteDance is looking to hire 10,000 new employees, Bloomberg reported last week. The company's app TikTok is based in Culver City and has been advertising jobs. Other big tech companies like Amazon and Apple have been on a hiring spree as they see an opportunity to pick up hard to find talent.
Arteen Arabshahi, vice president at Jeffrey Katzenberg's WndrCo, which develops and operates consumer technology businesses, said he has seen it play both ways. On the other side are companies sharing lists of employees that have been laid off in hopes of placing talented workers."Everyone is trying to make the best of a terrible situation," said Arabshahi, who oversees the firm's venture arm. "These types of initiatives have been really helpful for smaller businesses that are trying to hire. These are amazing for those companies.
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