Nearly a year after Culver City-based cloud-based security company Openpath raised $36 million, the company announced it was acquired by Chicago-based Motorola Solutions. Terms of the deal were not disclosed.
Created by serial entrepreneurs Alex Kazerani and James Segil, Openpath started in 2016 as an alternative to building security keycards.
The 87-person company expects to retain their headquarters while Kazerani and Segil will report to John Kedzierski, manager of the video security and analytics department at Motorola Solutions.
Openpath leverages a three-tier cloud-based encryption method to make the process of entering buildings virtually frictionless by connecting the door sensor to the mobile phone in three different ways. When an employee waves their hand at the sensor, it will connect to the phone and unlock the door.
The same technology can be implemented at elevators, parking lots and other large-scale enterprises.
The acquisition will help Motorola Solutions, a largely enterprise-focused communications company behind a slew of communication products for police officers, firefighters and retail stores, expand further into the physical space. The publicly traded company has been gobbling up security firms in recent years, including video surveillance venture Avigilon in 2018. Last year it picked up the Fresno-based video security upstart Pelco for $110 million.
"All of that has been to build an end-to-end portfolio in the physical security space," Kedzierski said. "So from video to access to analytics that tie all of that together."
The physical security space is a fast-growing industry, partly due to companies adopting the popular software-as-a-service business model.
Segil said Openpath hopes to leverage Motorola's large sales team, supply-chain capabilities and "credibility with large enterprise customers who we are increasingly selling our products and services to."
The article has been updated to accurately reflect the number of employees at Openpath.
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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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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 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.
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.
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.
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 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 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.
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.
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 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.
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.
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.
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.
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.
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.
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.
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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GoodRx earned dot.LA's top 2020 Startup award on Wednesday, beating out the popular sneaker reseller GOAT, the meditation application Headspace, mobile gamer Scopely and viral-video app TikTok.
"GoodRx started in Los Angeles, and will always be a Los Angeles-based company," said co-CEO Doug Hirsch. "We're so excited about the support we've received over the last decade from both entrepreneurs and investors and just incredible people that make up the ecosystem here in California and specifically in Los Angeles."
GoodRx was the first Los Angeles tech company to go public this year. It's mission to lower the prices of prescription drugs for Americans has made it one of the most-downloaded medical apps in the country.
"We're excited for the future and we appreciate the recognition," he said.
dot.LA wrapped up its inaugural Summit with the 2020 Startup Awards that honor the ingenuity and creativity propelling the startup scene in Southern California. More than 120 nominations were received from dot.LA's audience. The winners were chosen by a blue ribbon panel of judges, along with more than votes from the public.
Other winners included Entrepreneur of the Year, Tala CEO Shivani Siroya, Curative for Pivot of the Year, Blavity CEO Morgan DeBaun for Rising Entrepreneur, Openpath for Rising Startup and Social Justice Award went to Act One Ventures partner Alejandro Guerrero.
"We wanted to use this opportunity to shine a light on some of the most exciting, most driven and most world-changing people in companies in our world today," said dot.LA CEO Sam Adams.
Pivot of the Year: Curative Inc.
Curative was founded earlier this year by Fred Turner, an Oxford dropout. His company was then based in the Bay Area and tested for sepsis before it pivoted to provide COVID testing. As the pandemic emerged, he established a lab in San Dimas with the help of local venture capitalists that would eventually become Curative's home base. The company's saliva- based tests now account for about 10% of all testing nationally and Curative has an exclusive deal with the city of Los Angeles to provide testing.
"On behalf of our CEO Fred Turner and everyone who just want to thank you," said Curative spokesman Pasqualle Gianna. As you know, we pivoted from sepsis testing to COVID testing."
Quantgene: The company typically offers AI-powered blood test systems for early cancer detection but now provides COVID testing and logistics for those going back to work.
Swoop: The startup focused on group transportation but developed software that limousine charter operators and their suppliers, could utilize during the pandemic as regular business dried up.
PRISM Bags: This company planned to launch their signature product, a woman's work bag but as the pandemic beared down created one suited that included mask pockets.
WELL Health Inc.: Funded and engineered the Rapid Release Program in March '20, which allowed health systems to manage urgent COVID-19 patient communications at scale.
Social Justice Award: Alejandro Guerrero
More than 20 VCs have signed onto to Act One Ventures partner Alejandro Guerrero's Diversity Rider Initiative.
The firms have pledged to add language in term sheets submitted to startups that they will make their "commercial best efforts to offer and make every attempt to include as a co-investor in the financing" at least one Black check writer or other underrepresented group."
Guerrero is the child of Mexican immigrants who said he often found he was the only person of color in the room when investment deals north of six figures were being made. He said he was inspired by the George Floyd protests and the push the industry to recognize long-standing inequities.
Candace Walker, Co-Founder of Just US app: Created a hands-free voice control app that notifies your designated contacts when you've been stopped by police.
Derek Smith, Founder of Plug-In South LA: Created a tech startup community and accelerator program for entrepreneurs from under-represented backgrounds; produced the Urban Tech Connect conference.
Lolita Taub, Co-Founder and GP at The Community Fund: First-generation Latinx operator and investor that launched a $5 million early-stage fund to invest in community-driven companies.
Miki Reynolds, Executive Director, Grid110: Leads a no-equity, LA-based accelerator for underrepresented founders
Rising Entrepreneur: Morgan DeBaun
Morgan DeBaun is the founder and CEO of Blavity Inc., a leading news company and media brand for Black millennials and Gen Z. The outlet has been a leading voice for diversity. She launched Blavity in 2014; it now reaches over 30 million millennials a month.
Cristina de la Peña, CEO & founder of Synapbox
Jessica Nouhavandi, co-CEO of Honeybee Health
Ksenia Yudina, CEO of UNest
Robert Luo, CEO & founder of Mi Terro
Rising Startup: Openpath
The property-tech firm provides s touchless-entry activated by one's mobile device to doors, gates, elevators and lobby check-ins.
James Segil and Alex Kazerani co-founded Openpath in 2016 along with Chief Technology Officer Rob Peters, Chief Security Officer Samy Kamkar, and Chief Revenue Officer Phil Goldsmith.
The company recently raised $35 million and has seen their value proposition become all the more useful in the post-pandemic era.
"I'm incredibly honored and humbled to be here amongst so many great entrepreneurs and great companies here in L.A.," Kazerani said. "On behalf of about 450,000 Openpath users and our entire team, we really want to thank dot.la"
Pipe: A platform that offers non-dilutive financing to SaaS companies through an instant cash advance against the full annual value of software subscriptions.
PlayVS: Connects online games with official school administration and branding, elevating Esports from hobby to school-sponsored activity.
Outer: A direct to consumer outdoor furniture brand.
Wave: An entertainment technology company that turns performers into digital avatars and puts them on virtual stages.
Entrepreneur of the Year: Shivani Siroya
Shivani Siroya is the CEO and founder at Tala, a fintech company that offers microloans to people that often don't have a formal credit history. The company has extended $1 billion in microloans to 4 million customers in emerging markets and was last valued at $700 million. Siroya has been named one of Forbes' "40 under 40."
Alex Canter, CEO and co-founder of software company Ordermark
Andrew Peterson, CEO and co-founder of Signal Sciences
Doug Hirsch and Trevor Bezdek, co-founders and co-CEOs of GoodRx
Imran Khan, fo-founder and CEO of Verishop
Startup of the Year: GoodRx
The prescription-discount app GoodRx became one of the first Los Angeles tech companies to go public this year.
Co-founded by former Facebook executive Doug Hirsch and Trevor Bezdek, the Santa Monica company makes money by collecting fees from pharmacy benefits managers.
GoodRx is the most downloaded medical app in the United States and boasts 70,000 pharmacies on its platform. It's also profitable. The company earned $54 million in profit for the first six months ending in June, up from $31 million over the same time last year.
The company expanded into telehealth with the purchase of Heydoctor in 2019.
GOAT: Fast-growing global luxury shoe and apparel retailer.
Headspace: A meditation app that recently raised $100 million in debt and equity.
Scopely: A mobile video game company that acquired FoxNextGames from Disney in January.
TikTok: The video-sharing platform was the top grossing app on iOS App Store globally in Q2 2020.
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