The L.A. tech scene is booming despite a year-plus pandemic and a string of natural disasters. Rocket makers, sneaker sellers and fusion power creators were among those that dominated the list of L.A. venture deals for the first half of 2021.
On Wednesday, the National Venture Capital Association and Pitchbook released their Venture Monitor report which tracks investment across the country. Both Los Angeles and the U.S. overall notched record-breaking levels of VC investment as the COVID-19 pandemic rebound continues.
A few highlights from the report:
- At the national level, megadeals of $100 million have become more common, and L.A. appears to be no exception, with all 10 of its largest deals coming it at $100 million-plus.
- VC investment in Q2 for the Los Angeles-Long Beach area totaled $8.5 billion, spread across 365 different deals. That's slightly down from Q1's $9.4 billion, but still more than double the investment from the same time period last year ($3.9 billion).
- Los Angeles remains a powerhouse, but it still lags behind Silicon Valley. The $8.5 billion dollars of Q2 investment puts Los Angeles-Long Beach second, behind only the Bay Area ($26.7 billion) and New York City ($12.6 billion) in terms of total VC deal activity. Boston, Seattle and Denver round out the top 6.
- The white-hot market streak continues. For the year to date, VC investment in the Los Angeles-Long Beach area has totaled $17.9 billion across 762 deals. That's easily on pace to shatter 2020's record total of $22.7 billion.
- The three largest deals in the Los Angeles-Long Beach area came from the aerospace industry. Elon Musk's SpaceX raised $1.2 billion while upstart rival 3-D rocketmaker Relativity Space pulled in $650 million sending its valuation soaring to $4.2 billion. Defense contractor raised $450 million catapulting the Irvine-based company's valuation to $4.6 billion.
- Of the top 10 largest deals, three were fintech software companies.
- Energy and software also received large investments in excess of $100 million.
- Santa Monica scooter company Bird Rides, which is plotting out an IPO via SPAC, also made the list. The blank-check company Switchback II Corporation was marketing a PIPE offering to investors.
- All of the top 10 largest VC investments were later stage investments—a trend which was generalizable across the entire United States.
- Exits were strong nationally and for the Los Angeles-Long Beach area, with IPOs representing the dominant pathway to liquidity. The region's largest exits came from FIGS, ZipRecruiter and Bridg.
- FIGS, the Santa Monica Healthcare apparel brand, IPO'd for an exit of $3.4 billion.
- ZipRecruiter, the Santa Monica online recruiting platform, also IPO'd for an exit of $2.4 billion.
- Bridg, the Los Angeles SaaS data infrastructure company, was acquired by Cardlytics for an exit of $350 million.
Here's a look at Pitchbook's list of the biggest second-quarter deals in Southern California — from the Santa Barbara area to Orange County:
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- SoCal Venture Pipeline Connects Startups with Series A Funds - dot.LA ›
On the heels of a $650 million raise earlier this month, reusable rocket-maker Relativity Space is upgrading its headquarters to a 93-acre former Boeing manufacturing facility in Long Beach where it can house production.
Relativity CEO Tim Ellis told dot.LA via email that the company will keep its existing office space in Long Beach, but will move the bulk of its manufacturing and development to the new 120,000 square-foot facility located at 3500 E Burnett Street. Ellis also noted that Relativity signed a 16.5 year lease agreement.
The massive site is where Boeing manufactured C-17 cargo planes and is a vestige of the region's blue-collar aerospace industry that once dominated the industry. The last commercial airplane in Southern California was made in the plant — and, when it shuttered, pundits and economists declared the end of an era. But the region's burgeoning space industry – home to Virgin Orbit and Rocket Lab – has helped revive the region.
"The fact that this is a former C-17 factory means that the facility already has an architectural structure that we need for our own Relativity 'Factory of the Future,'" Ellis said, adding that the building has ceilings up to 100 ft. tall and no internal beams that could impede production of its massive rockets.
The cavernous site can pack in the tools the company needs to finish development of its Terran 1 and Terran R rockets, including "dozens" of 3D printers, a metallurgy laboratory and mission control center.
Relativity said earlier in June that over 85% of the Terran 1 rocket is printed and is on track for a test launch this year from the company's site at Cape Canaveral, Fla. The Terran R rocket will eventually launch from the same complex by 2024.
"We were intent on building our footprint in Long Beach because it has a great talent pool and innovation hub, among the best in the world for aerospace, which is supported by initiatives of the city," Ellis added. "We were looking for a space that could accommodate scaling our Terran R program, and when this space came into the picture, it was clear that it was perfect for us."
The new headquarters will enable Relativity to expand its staff from 45 people to over 2,000, Ellis said. Relativity plans to move its staff and equipment over in phases but will work in the space as soon as January 2022.
Industrial property firm Goodman Group and architecture firm Gensler will work to create the new headquarters for Relativity.
Relativity's new digs are part of a larger initiative passed by the Long Beach City Council called the Globemaster Corridor Specific Plan, which will revamp 437 acres of land west of Long Beach Airport into a "modern business district" set to open next year.
"We couldn't be more excited to welcome their new headquarters to our city," Long Beach Mayor Robert Garcia said in a statement. "Relativity is a fierce and growing leader in our world's space economy, and we're proud they chose Long Beach as home. This new headquarters will bring thousands of great, good-paying jobs to Long Beach and strengthen economic growth for the entire region."
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Aerospace upstart Relativity Space and its CEO Tim Ellis are trying to take on SpaceX in the recyclable rocket race. The company has landed a new funding round to produce a fully reusable rocket that could launch within three years.
Long Beach-based Relativity raised a $650 Series E round June 8 to fund the development and production of its Terran R rocket, a reusable craft that will be 95% 3D-printed — including its engines — and launch by 2024, according to CEO Tim Ellis.
The new round was led by existing investors Fidelity Management & Research. WIth this round, Relativity Space has raised roughly $1.9 billion since its 2015 launch.
Ellis told dot.LA that the funding round is pivotal in helping Relativity reach its lofty goals.
"Ever since Relativity's early days in Y Combinator, we've planned to manufacture a large reusable rocket along with Terran 1 and now we're one step closer to fulfilling that vision," he said in an email.
Ellis added that the company has already sold the first multiple launch contract for Terran R, even though the rocket isn't finished yet and said "our team is excited by the progress this new funding will enable in its development."
"Over the last year, we found ourselves being asked by the market to accelerate development of our larger launch vehicle, so we knew it was time to double down on our existing plans and scale the Terran R program even faster and build production capabilities at scale sooner," said in an earlier statement.
SpaceX has been reusing rockets -- or parts of them -- since 2010. The company's Falcon 9 rocket is recyclable and has been in use since 2012, and SpaceX first successfully re-lit used rocket boosters during a test the year after. The Falcon Heavy and Starship crafts developed by SpaceX also use reusable components.
Relativity's renderings of the Terran R show a craft that is 216 feet tall and looks like something straight out of "Star Trek." The sleek, aerodynamic craft is 16 feet in diameter and capable of sending over 44,000 pounds into low Earth orbit.
The craft has a lot of firepower -- seven identical 3D-printed engines that will give the rocket over 300,000 pounds of upward thrust each.
The Terran R is the reusable counterpart to Relativity's Terran 1 rocket, which has already secured Department of Defense contracts to launch satellites by June of next year. Six private companies have signed on to launch on the rocket so far, including Iridium, Telesat, Spaceflight, mu Space, Momentus, and TriSept.
"We're focusing our energy towards the first launch of Terran 1, the world's first completely 3D printed rocket, which is the most pre-sold rocket in history and building Terran R," Ellis told dot.LA.
Relativity said that over 85% of the Terran 1 rocket is printed and is on track for a test launch this year from the company's site at Cape Canaveral, Fla. The Terran R rocket will eventually launch from the same complex.
Besides being recyclable, the biggest difference between the Terran R and the Terran 1 is that the R is capable of holding a payload 20 times bigger.
If the Terran R craft lands successfully and all parts are reusable, it could be a game-changer not only for launch contractors such as the DoD, but also other rocket manufacturing companies.
Ellis claims the company has "radically simplified" its supply chain and can build a rocket in less than two months with "over 100 times fewer parts" than a conventional rocket build.
Automated 3D printing rockets cost a fraction of what a typical rocket production line would, and SpaceX has already proven that reusable rocket parts are both feasible and cheap. With a successful model for reusable spaceflight, Relativity could gear itself up for a flurry of interested launch partners looking to reach orbit for a nominal price.
Other existing investors returned to back Relativity again, including U.K.-based asset manager Baillie Gifford, Tiger Global Capital, K5 Global, Tribe Capital, hedge fund XN, actor Jared Leto and "Shark Tank" star and entrepreneur Mark Cuban.
Spencer Rascoff, a co-founder and investor in dot.LA, contributed to Relativity Space's Series E through his L.A.-based investment firm 75 and Sunny, as well as in prior funding rounds.
New investors including Brad Buss, private equity firm Centricus and New York City-based hedge fund Coatue also joined the round.
Editor's note: This story has been updated throughout with comments from Relativity Space CEO Tim Ellis.
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