Here are the latest headlines regarding how the novel coronavirus is impacting the Los Angeles startup and tech communities. Sign up for our newsletter and follow dot.LA on Twitter for the latest updates.
- Now Trump weighs in on Elon Musk's defiant move to open a Tesla plant early
- Los Angeles may extend shelter-in-place directives until August, says county health official
- UpKeep raises $36 million Series B as maintenance services startup in demand amid COVID
<ul class="ee-ul"></ul>
<p class=""><br></p>
UpKeep raises $36 million Series B as maintenance services startup in demand amid COVID
<img lazy-loadable="true" src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzI3MzY0OS9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYzNzY2MDM1MX0.QEuZGTPO-hQeDjY0DE8YJ2Kej7fFdACnErWzvCpLvOw/image.jpg?width=980" id="8d2c5" class="rm-shortcode" data-rm-shortcode-id="8c29b58d478d9ef13655e213ffae8a90" data-rm-shortcode-name="rebelmouse-image" />Ryan Chan, UpKeep founder and CEO, says the pandemic has only made UpKeep more attractive as companies put a greater emphasis on cleaning and maintenance.
<p><a href="https://www.onupkeep.com/" target="_blank">UpKeep</a>, a mobile platform that helps companies streamline maintenance requests, announced Tuesday it has raised $36 million in Series B funding. Though it is a difficult time for many companies to fundraise, Ryan Chan, UpKeep founder and CEO, says the pandemic has only made UpKeep more attractive as companies put a greater emphasis on cleaning and maintenance. "I feel fortunate that we are in a space that is growing because of this," Chan told dot.LA. "We were able to raise at very favorable terms, but for a lot of companies it's very difficult to raise right now."</p><p>Chan certainly does not want to be seen as gloating. "We got lucky, but through no fault of our own," he added. Though UpKeep is a Los Angeles company, it turned to New York-based Insight Capital to lead the round. Existing investors Emergence Capital, Battery Ventures, Y Combinator, Mucker Capital, and Fundersclub also participated.</p><p>"COVID-19 is bringing the importance of maintenance into the spotlight, underscoring UpKeep's mission," Deven Parekh, Managing Director at Insight Partners, said in a statement. Upkeep says it saw 206% revenue growth last year and has signed with notable brands including Unilever, Siemens, DHL, Thermo Fisher Scientific, McDonald's and Jet.com.</p>Los Angeles may extend shelter-in-place directives until August, says county health official
<img lazy-loadable="true" src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzI3MzYzOS9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTY1MTE2MDQ3OH0.8SsIb7kUNYHLhSGzsxUiRBMEQd75L0Gnl8bsMRbBJSs/image.png?width=980" id="0fa20" class="rm-shortcode" data-rm-shortcode-id="b03901f7608a01aea8d5d0f02c3d6392" data-rm-shortcode-name="rebelmouse-image" /> <p>Los Angeles County may extend stay-at-home orders for the next three months, ending sometime in August, according to Public Health Director Barbara Ferrer during a Board of Supervisors meeting on Tuesday. California began loosening stay-at-home rules last week, reopening trails and providing retailers with the ability to sell merchandise through curbside services.</p><p>But Ferrer warned Tuesday that further loosening of the rules will be slow. And that would only change if there was a "dramatic change to the virus and tools at hand." "Our hope is that by using the data, we'd be able to slowly lift restrictions over the next three months," she said, <a href="https://www.latimes.com/california/story/2020-05-12/coronavirus-beaches-reopen-los-angeles-county-move-toward-new-normal?fbclid=IwAR2Z97ITma_M1wvWtL-Ia-IV_3kP7lvjsxnTaEV3VQKukeM_0Z_1tGtAU-U" target="_blank">according to the L.A. Times.</a> But without widely available therapeutic testing for the coronavirus or rapid at-home tests that would allow people to test themselves daily, it seems unlikely that restrictions would be completely eased.</p>Now Trump weighs in on Elon Musk's defiant move to open a Tesla plant early
<img lazy-loadable="true" src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzI3MzMyNC9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYxOTAxOTQ4OX0.KNXEiNukPzNReeVRUf3Ntd-lhTsix_CuVd33Qy4W6gM/image.jpg?width=980" id="b2b27" class="rm-shortcode" data-rm-shortcode-id="79f2d38d535393cc507416f82c953e35" data-rm-shortcode-name="rebelmouse-image" /> <p>This won't come as a surprise: President Trump joined in on the Twitter debate about Elon Musk reopening his Tesla Inc. plant in Fremont, Calif. "California should let Tesla & @elonmusk open the plant, NOW," <a href="http://twitter.com/realDonaldTrump/statuses/1260203080076931072" target="_blank">Trump wrote in a tweet Tuesday</a>. "It can be done Fast & Safely!" Musk tweeted on Monday that Tesla would ramp up production at its only U.S. car plant, and risked being arrested after county officials ordered the company to stay closed. The billionaire entrepreneur has slammed California's strict reopening plan, saying his company has a right to manufacture cars and make money.</p><p>Musk wrote in an email to employees, <a href="https://www.bloomberg.com/news/articles/2020-05-12/musk-sends-staff-a-thank-you-note-after-threat-to-uproot-tesla?utm_source=google&utm_medium=bd&cmpId=google" target="_blank">in documents reviewed by Bloomberg News</a>: "Just wanted to send you a note of appreciation for working hard to make Tesla successful. It is so cool seeing the factory come back to life and you are making it happen!!" Over the weekend, Musk stated he would move Tesla and his rocket company SpaceX out of the state unless restrictions were lifted, prompting one California lawmaker to <a href="https://dot.la/coronavirus-updates-treasury-secretary-steven-mnuchin-backs-elon-musks-pledge-to-leave-cali-2645970832.html?rebelltitem=1#rebelltitem1" target="_blank">tweet "F*ck Elon Musk."</a></p>From Your Site Articles
- Elon Musk's Threat to Leave California ›
- California Unemployment Surges After Coronavirus Closure - dot.LA ›
- Coronavirus Updates: California Unemployment Claims at 1.9M ... ›
Related Articles Around the Web
Read more
Show less
The world's largest online marketplace for DNA services is providing a new "Coronavirus DNA Health Report" that promises to assess a user's individual risk of coronavirus infection and the likely severity of reaction from the virus, including the risk of serious illness or death, based on a free analysis of their DNA.
<p>Los Angeles-based Sequencing.com, founded by Dr. Brandon Colby in 2014, said in a phone call with dot.LA Wednesday that the platform started allowing people to begin getting the newest report for free early this morning and within a few hours thousands had already done so and it quickly became the No. 1 report on their site.</p><p>"We really have been working day and night going through the literature, identifying what studies are valid to use, creating algorithms for that, automating algorithms, and creating a report that's very straight forward and very accessible to the layperson, so that everyone can be empowered by that," Colby said.</p><p>"We specialize in this, working nonstop, and are not sure if that capabilities exists with other companies, so we see that as a competitive advantage."</p><p>The new report is based on 18 scientific studies, with the company's team adopting research from the SARS outbreak in 2003 because at a molecular level COVID-19 is caused by a strain that appears to be similar.</p><p>"Sounds like bullshit to me," said Dr. Jeffrey Klausner, a University of California, Los Angeles epidemiologist who is also a Professor of Medicine in the Division of Infectious Diseases and the Program in Global Health. "If you can put in someone's age, that's probably the strongest predictor of the likely severity" of the disease for them.</p><p>Klauser added: "They can say whatever they want. It's of high concern to an infectious disease epidemiologist and clinical specialist like myself."</p><p>Health specialists have also noted that the existence of other chronic diseases like lung or heart disease can also be the strongest predictor of clinical outcomes.</p><p>"There are certain human gene alterations that can put people at risk for lung disease or heart disease, but that hasn't been adequately studied, gone through a peer review process, tested and epidemiological studies (conducted) to verify so it's not something I'd recommend or encourage people to waste their money on," Klausner said.</p><p>The company, which was backed by Mucker Capital a little over a year ago, moved into doing its own genomic sequencing 2-3 months ago, too, providing a DNA sequencing that's roughly similar to what the other major companies offer for $69 or a full sequencing of the human genome for $399.</p><p>Colby said that anyone who has done DNA sequencing, whether with them, or others like 23andMe or Ancestry.com, could upload their data on the site for the newest coronavirus report, which is ready in about 10 minutes.</p><p>"The more this pandemic evolves, the more it becomes clear that younger people – even if asymptomatic – should also be concerned about knowing their risk factors," said Colby in a statement responding to Klausner's comments. "Knowledge is power, and if getting their Coronavirus DNA Health Report from Sequencing.com provides further confirmation that they should not be going out in public for their own safety and to eliminate the potential spread of the virus to others, then all the better."</p><p>The website is HIPAA, GDPR and CCPA compliant, Colby said, and has adopted practices to ensure user privacy, ownership and control of data.</p><p><em>__</em></p><p><em>Do you have a story that needs to be told? My DMs are open on Twitter </em><a href="https://twitter.com/latams" target="_blank"><em>@latams</em></a><em>. You can also email me at tami(at)dot.la, or ask for my Signal.</em></p>
From Your Site Articles
- Michael Milken Predicts We'll Soon Develop a Coronavirus Testing ... ›
- Coronavirus Test Kit Facility Aims to Produce 10K A Day in L.A. - dot ... ›
Related Articles Around the Web
Read more
Show less
- After WeWork, VC's noticed a major shift in how founders were pitching their companies. Growth and costly customer acquisition strategies are out while profitability is in.
- Some VC's, scared off by high valuations, are holding back their dry powder waiting for the market to cool. For instance, PLUS Capital's team compiled a list last year of companies it wanted to invest in if only the price was cheaper.
- VC's are excited about employees leaving SpaceX and starting new companies. "That talent is going to be game changing."
As the new decade begins, Southern California's tech scene continues to sizzle. More than 7,000 investors have poured money into 4,768 startups, ranging from a unicorn that aspires to have scooters whizzing through every city on earth to one that has ambitions to colonize Mars to the thousands of smaller companies just trying to get to their Series A, according to data analyzed by dot.LA.
"No one is doubting L.A.'s place in the tech ecosystem anymore," said Arteen Arabshahi, vice-president at WndrCo. "People realize L.A. is meaningful."
Last year ended with what is arguably the most consequential local acquisition to date when Paypal bought Honey for $4 billion. According to Pitchbook, L.A. VC exit deal flow hit $8.4 billion last year, the second highest amount ever after 2017, when Snap went public.
"I don't think Los Angeles will ever be Silicon Valley," said Brian Lee, co-founder and managing director of BAM Ventures. "We don't have grandparents named Fairchild Semiconductor and we don't have aunts and uncles named Google and Yahoo. But we are growing and we do have some great businesses being started here."
<p>Despite all the momentum, there are plenty of headwinds in the broader startup world to keep L.A. entrepreneurs and investors up at night. After WeWork's disastrous flameout and the disappointing IPOs of Uber and Lyft and shelving of IPOs for Postmates and Endeavor Group Holdings Inc., founders are under increased scrutiny to demonstrate they can deliver profits and not just meteoric growth. Meanwhile, Pitchbook data shows deal value fell slightly last year from 2018's record high, to $136.5 billion. Lastly, as this bull market approaches its eleventh year, companies are stockpiling cash to weather a recession, <a href="https://www.fool.com/retirement/2020/01/19/58-of-investors-expect-a-recession-in-2020-heres-h.aspx" target="_blank">which 58 percent of investors say could happen this year.</a></p><p>To find out where L.A.'s tech scene is headed next, dot.LA interviewed some of the city's top VC's to ask where they are putting their money and what questions they think will shape the beginning of the new decade.</p><h2>1. What's the right balance of profitability versus growth?</h2><p>After WeWork, VC's noticed a major shift in how founders were pitching their companies, a trend they expect to continue for the foreseeable future. Growth and costly customer acquisition strategies are out while profitability is in.</p><p>"It's the soup du jour," said Amanda Groves, a partner at PLUS Capital. "It's trickled all the way down to the seed stage companies, which I think is healthy for people to be aware of."</p><p>Some very young companies are pitching how they will have a sustainable business model even before they've figured out a model for monetization.</p><p>"Now it's in decks and presentations and e-mails," said Groves. "That would never have existed before."</p><p>VC's say it is still important to focus heavily on growth, which is the point of venture capital afterall. They don't need to see profits right away, but they want to see a realistic way for companies to sustain themselves without burning through cash.</p><p>"We are focused on a path to profitability, said Dustin Rosen, managing partner at Wonder Ventures. "When I take companies from pre-seed to seed or series A, I'm coaching them on their presentations to focus on that."</p><p>VC's stressed that they have always been mindful of investing in sustainable businesses. It is not as if they only discovered the magic of profitability after WeWork.</p><p>Lee, one of the area's most experienced tech entrepreneurs who co-founded LegalZoom in 2001, has seen times when VC's prioritize growth and other times like now when profitability is paramount.</p><p>"They shift like the wind and it just drives me crazy," he said. "For me, we just want to build great businesses and it depends on the business model itself and the scale that something has to get to decide whether you want to run for profitability or growth. It should not be macroeconomics that determines that."</p><p>VC's should still have a tolerance for burning through cash relative to product fit and the maturity of a management team, according to Kara Nortman, a partner at Upfront Ventures. Still, she says companies are tightening up post WeWork.</p><p>"People are caring a lot more about capital efficiency," she said. "There's less tolerance for spending in extreme ways."</p><p>It is a shift that Nortman hopes is well-suited to L.A. companies. Nortman says many have long been forced to be more prudent than their Bay Area peers due to the shortage of local VC's like her writing bigger checks.</p><p>"In L.A. you've always had to be a bit more capital efficient," said Nortman. "The valuation is much more reasonable every step of the way."</p>
<p><br></p><h2>2. Will valuations come back to the earth?</h2><p>Despite signs of a modest cooling, Pitchbook data shows valuation size set another record last year at every fundraising stage. Checks are ballooning. And what would have been a pre-seed amount a few years ago is now seen in the seed round and what would have been a pre-seed is now series A, and so forth.</p><p>"Last year we saw an incredible amount of hubris," said Groves. "We're seeing it come back to earth a bit."</p><p>Some VCs, scared off by high valuations, are holding back their dry powder waiting for the market to cool. For instance, PLUS Capital's team compiled a list last year of companies it wanted to invest in if only the price was cheaper.</p><p>"The expectation is that if the market were to turn it might create an interesting buying opportunity for some of those companies where those valuations were out of whack," said Groves. "It sounds a little malicious, but is really just about keeping an eye on companies we really love that we couldn't make the numbers work."</p><p>While the average size of late-stage deals fell from $11.5 to $10.4 million last year, the size of early stage deals rose from $6 to $6.5 million, according to Pitchbook. (The average size of angel and seed funding deals stayed flat, at $1.1 million.)</p><p>"It's tough for price sensitive, early stage funds," said Matt Lydecker, lead investor at Luma Launch. "For us, there's definitely a threshold of valuation we need to be below. We will see a great company with a great founder and we're just priced out."</p><p>Investors will likely have to wait some time for valuations to decrease much due to the massive amount of capital flowing into venture capital. <a href="https://www.wired.co.uk/article/softbank-vision-fund-2" target="_blank">Even if Softbank does not succeed </a>in raising $108 billion for its Vision Fund 2, there is still plenty of capital pouring in from nontraditional investors like asset managers and hedge funds. <a href="https://files.pitchbook.com/website/files/pdf/PitchBook_2020_Venture_Capital_Outlook.pdf" target="_blank">Pitchbook predicts</a> "pre-money valuations will continue to climb in 2020, with the median reaching a decade, if not all-time, high."</p><p>"There's a ton of capital chasing alpha, " said Will Coffield, a partner at Riot Ventures. "There's not really going to be a shift."</p><p><br></p><p class="shortcode-media shortcode-media-rebelmouse-proxy-image">
<img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vbWVkaWEucmJsLm1zL2ltYWdlP3U9JTJGd2lraXBlZGlhJTJGY29tbW9ucyUyRjAlMkYwOSUyRkV2YW5fU3BpZWdlbF9hdF9UZWNoQ3J1bmNoLmpwZyZobz1odHRwcyUzQSUyRiUyRnVwbG9hZC53aWtpbWVkaWEub3JnJnM9NTcwJmg9YzZmM2M0YWVhYzI1ZjkwNmFlMjIzYzAzZTUzOTRmM2M5NmViNTZhODYzYmUxMTJmZjI1MDEwZDdiYjA1OWI3ZSZzaXplPTk4MHgmYz0zMTE0MjQ2MzAwIiwiZXhwaXJlc19hdCI6MTY0NTI2Nzc5NX0.uNv3jNl-rrCNNJ2oWYqU3q63Ujrjub2LkdoGTHS6vuQ/img.jpg" id="4b5a5" class="rm-shortcode" data-rm-shortcode-id="b0e04b6a5737a7d8afd25a9afed1921c">
<small class="image-media media-caption" placeholder="Add Photo Caption...">Snap Inc.'s Evan Spiegel at TechCrunch's Disrupt Conference.</small><small class="image-media media-photo-credit" placeholder="Add Photo Credit...">
<a href="https://upload.wikimedia.org/wikipedia/commons/0/09/Evan_Spiegel_at_TechCrunch.jpg" target="_blank">upload.wikimedia.org</a>
</small>
</p><h2><strong>3. How many offices will Sand Hill Road open near the sand?<br></strong></h2><p>While L.A. now has a sizable number of VC funds – mostly at the early stage – companies here have traditionally raised heavily from Sand Hill Road. For instance, Menlo Park's Lightspeed Venture Partners led Snap's seed round, turning $485,000 into around $2 billion when the company went public in 2017. Benchmark led Snap's series A, resulting in another multibillion dollar windfall for a Bay Area firm. By contrast, Honey's investors – including Wonder Ventures, BAM Ventures, and Mucker Capital – were primarily L.A. based.</p><p>"That demonstrates that if you want to get into the best companies in L.A. you can't just wait for them to knock on your door on Sand Hill Road," said Coffield. "We're seeing more investors from San Francisco have dedicated strategies for how to cover L.A."</p><p>At Wonder Ventures, Rosen is noticing the same thing.</p><p>"I've never seen more excitement from Bay Area firms looking to do deals in L.A. because they know there are great companies and they know the prices and competition are less than they are dealing with," he said.</p><p>Just as many Silicon Valley firms have opened up New York offices but there are also homegrown New York firms, Groves says local VC's can co-exist with ones from up North.</p><p>"Silicon Valley has so many more venture funds, particularly ones with certain vehicles that we don't focus on," said Groves. "I think L.A. will mimic what the evolution has been on the east coast."</p><p>More Sand Hill Road offices could drive valuations even higher and reduce the discount that VC's still say L.A. early stage startups are priced at compared to the Bay Area. Even so, L.A. VC's say more capital flowing into L.A. can only be beneficial.</p><p>"It's absolutely helpful," said Nortman. "It's good for us and good for our founders."</p><h2>4. What sectors will shine?</h2><p>L.A.'s tech scene has largely been known for consumer standouts like Riot Games, Snap, and Dollar Shave Club but scores of lesser known, less flashy startups are poised to break through, according to VC's we interviewed.</p><p>"I am expecting more deep technology companies to be launched and more enterprise companies," said Groves. "A lot of that is a function of having the Googles and Amazons and some of these bigger organizations opening up offices, which is drawing more talent to the L.A. ecosystem."</p><p>Nortman too is focused on enterprise, and also agtech, aerospace, and companies that help with climate sustainability. She's excited to see founders who led successful companies in the Bay Area return to L.A to start their next company.</p><p>"They grew up here and are ready to come back," she said.</p><p>Rosen is focused on startups working to improve mental health and wellness.</p><p>"The effect of digital addiction and digital isolation of less traditional human contact has created a unique set of mental health issues that need solutions outside traditional therapy," he said.</p><p>Jamie Montgomery, founder and managing director of March Capital Partners, is looking for more artificial intelligence startups in the area. Up until now, he has found more promising ones in the Bay Area and New York City.</p><p>"We haven't done as much in Southern California as we would have liked, but I think that will evolve," Montgomery said.</p><p>Coffield thinks local defense, aerospace, and robotics companies are ripe with opportunity.</p><p>"There's a whole robotics community developing between downtown L.A. and Pasadena," he said.</p><p>He is particularly excited about employees who have left SpaceX to start new companies, like Relativity Space or Elementary Robotics.</p><p>"We spend a lot of time trying to track the talent out of SpaceX," Coffield said. "That talent is going to be game changing."</p>
From Your Site Articles
- Startups - dot.LA ›
- Hello, Los Angeles: dot.LA Launches to Shine a Light on L.A. ... ›
- Los Angeles' Tech and Startup Scene is Growing. - dot.LA ›
- Join Us For dot.LA's Startup Pitch Showcase - dot.LA ›
- Wonder Ventures Plans to Fund 3 Companies With Ties to L.A. - dot.LA ›
- Los Angeles Tech and Startup Week in Review ›
- Corto Aims to Bring AI to Hollywood Script Writing - dot.LA ›
- Corto Aims to Bring AI to Hollywood Script Writing - dot.LA ›
- Catch Up With This Week's Startup News in Our Weekly Video Recap - dot.LA ›
- Brian Lee on Why L.A. Is Now a Tech Capital - dot.LA ›
Related Articles Around the Web
Read more
Show less
wndrco
honey
paypal
snap
brian lee
bam ventures
wework
plus capital
wonder ventures
legalzoom
upfront ventures
pitchbook
luma launch
riot ventures
sand hill road
mucker capital
dollar shave club
jamie montgomery
march capital partners
agtech
aerospace
robotics
relativity space
elementary robotics
l.a. tech in 2020
ai