Get in the KNOW
on LA Startups & TechX
vc sentiment survey
2022 was a tough year for venture capital. Venture deals fell throughoutthe year as the economic environment became uncertain.
But despite the economic downturn, VCs still flocked to LA’s growing tech and startup scene.
We asked more than 30 investors to share which VCs are the best Los Angeles has to offer. The following list reflects those who received two or more votes.
A few familiar faces popped up, such as Bonfire Ventures’ Mark Mullen and TenOneTen’s Minnie Ingersoll, who both received the most votes in previousyears. This year, Mullen topped the list with six votes, while Ingersoll and M13’s Anna Barber both came in second with three votes.
The below results are listed according to the number of votes received. In the case of a tie, the names are listed alphabetically by last name.
Here are LA’s top VCs of 2022 according to their peers:
Mark Mullen, Bonfire Ventures
Mark Mullen is the co-founder and managing director of Bonfire Ventures, a venture capital firm that invests in B2B software companies at seed stage. In 2022, Bonfire raised over $230 million across two new funds. Mullen previously founded Double M Partners and Mull Capital. (Disclosure: Mullen is an investor in dot.LA.)
Anna Barber, M13
Anna Barber is a partner at M13, which invests in early-stage consumer tech. M13 raised $400 million last year for its third fund and intends to target Web3. She was previously the managing director of Techstars LA and is currently on the Advisory Board of PledgeLA, which is a coalition of tech companies and venture capital firms. (Disclosure: M13 is an investor in dot.LA)
Minnie Ingersoll, TenOneTen
Minnie Ingersoll is a partner at TenOneTen Ventures, which invests in early-stage tech companies. Having started her career at Google, she went on to co-found the online used car marketplace Shift Technologies. She currently hosts dot.LA’s LA Venture podcast.
Dana Settle, Greycroft
Dana Settle is the co-founder of Greycroft, where she is also a managing partner. The venture capital firm primarily invests in Internet and mobile markets, such as the savings app Acorns and the banking company Narmi. She is currently a Board Director of the National Venture Capital Association. (Disclosure: Greycroft is an investor in dot.LA.)
Raj Ganguly, B Capital Group
Raj Ganguly is a co-founder and anaging General Partner of the multi-stage global investment firm B Capital. In 2022, B Capital raised $250 million to launch its first early-stage fund. Ganguly is a Senior Advisor at the Boston Consulting Group.
Eva Ho, Fika Ventures
Eva Ho is a general partner at the boutique seed fund Fika Ventures, which invests in enterprise software, fintech, marketplaces, and digital health. In 2022, Fika invested in companies ranging from BuildOps, a software program for contractors, to HeyRenee, a healthtech company. Ho previously served as the Entrepreneur-in-Residence for City of Los Angeles and worked for Google and YouTube.
Rick Smith, Crosscut
Rick Smith co-founded the seed-stage venture capital firm Crosscut in 2008 and serves as a Managing Director. Since then, the firm has invested in companies ranging from Fabletics to Buzzfeed. Smith previously worked as a managing director at Palomar Ventures and SunAmerica.
Michael Tam, Craft Ventures
Michael Tam is a partner at Craft Ventures, an early-stage and growth fund. Last last year, Craft led the funding round for meez, a restaurant management app for chefs. Prior to joining Craft, Tam was a Senior Associate at Crosscut Ventures and oversaw business operations for Uber.
- These Are LA's Top Venture Capitalists of 2022, According to Their Fellow VCs ›
- Jam City's Josh Yguado Looks to a Time When Gamers Own a Stake in their Favorite Titles ›
- Prediction: EVs Are Disrupting Car Shopping Habits, Giving 3 Companies a Competitive Edge in 2023 ›
- 'Investor Confidence Is Booming': VCs Poured $69 Billion Into Startups in the First Quarter of 2021 ›
- More and More Influencers Are Launching Their Own VC Funds — Here’s Why ›
- Here Are LA's Top VCs, According to Their Peers ›
- Pagos Secures $34M, Champions Round Picks Up $7M - dot.LA ›
- Greycroft Storms Into the Future With a $1 Billion Raise - dot.LA ›
Los Angeles, like the rest of the startup world, saw a dip in global venture funding. As of November 2022, funding reached $22 billion, which is 69% lower than the previous year.
Despite the massive downturn in funding due to the decline in technology stocks at the end of 2021 combined with concerns about rising inflation, it did not stop the startups on this list from raising funding. We asked more than 30 leading L.A.-based investors for their take on the hottest firms in the region. (We also asked VCs not to pick any of their own portfolio companies, and vetted the list to ensure they stuck to that rule.)
They selected a few live-shopping platforms, space startups and payment software companies and we've organized the list based on the amount of capital raised as of January, according to data from PitchBook.
Here are the eight L.A. startups VCs have their eyes on as they look ahead to 2023.
Anduril ($2.32B raised)
Anduril Industries Is Getting Hundreds of Millions to Build Border Surveillance Tech Image by Ian Hurley
Given how much the company has raised to date, it was no surprise that Costa Mesa-based defense technology startup and U.S. military contractor Anduril was the name that most often came up among L.A. venture investors.
Oculus co-founder Palmer Luckey, Founders Fund partner Trae Stephens, ex-Palantir executives Matt Grimm and Brian Schimpf founded Anduril in 2017. The startup is most known for its core software product, an operating system called Lattice, which is used to detect potential security threats.
To date, the startup has received investments from Andreessen Horowitz, Founders Fund, General Catalyst, D1 Capital Partners and venture capitalist Elad Gil.
ServiceTitan ($1.1B raised)
Earlier this year, the Glendale-based firm filed for an initial public offering. Since its founding in 2012, the company’s co-founders, Ara Mahdessian and Vahe Kuzoyan built its software for a wide range of service industries, from plumbing and landscaping to pest control and HVAC.
The company’s growth is largely driven by its ability to acquire other businesses, including landscaping software provider Aspire and pest control-focused platforms ServicePro and, earlier this month, FieldRoutes.
Whatnot ($484.41M raised)
The Marina del Rey-based livestream shopping platform makes the ‘Hottest Startups’ list for a second year in a row. The online marketplace was founded by former GOAT product manager Logan Head and ex-Googler Grant LaFontaine and 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.
It’s no secret that its success is in part, due to the partnerships Whatnot inked this year, like UFC fighter Jorge Masdival to sell sports collectibles on the platform. Along with science fiction/fantasy comics publisher Heavy Metal to bring out original content for the Whatnot community.
Boulevard ($110.35M raised)
Los Angeles-based salon booking app Boulevard attracted backers including Santa Monica-based early-stage VC firm Bonfire Ventures, which focuses on B2B software startups. The startup builds booking and payment software for salons and spas and now it now serves 25,000 professionals across 2,000 salons. Boulevard has also worked with prominent brands such as Toni & Guy and HeyDay.
Varda Space ($53M raised)
Space manufacturing startup Varda focuses on designing, developing, and manufacturing products that benefit from low gravity. The products that the El segundo-based company manufactures in space are intended to be brought back down with the hope that it will improve life on earth. The forward-thinking company was founded by Founders Fund partner Delian Asparouhov and former SpaceX officer Will Bruey.
Papaya (65.2 million)
Sherman Oaks-based Papaya was founded by Patrick Kann and Jason Metzler. The company was built to make it easier for consumers to pay “any” bills — whether it's a hospital bill or a parking ticket — all on the mobile app. To pay, users take a picture of their bill and type in the amount they want to send as long as the end user has a mailing address or an online payment portal. Papaya utilizes optical character recognition, a software that enables the app to look at every bill — no matter what the format is — and recognize each piece of information.
Impulse Space ($30 million raised)
Based in El Segundo, Impulse Space creates orbital maneuvering vehicles capable of delivering multiple payloads to unique orbits from a single launch. Founded in 2021 by former SpaceX exec Tom Mueller built his company as a last-mile delivery partner for future inter-space missions, like servicing space stations. In July, the space startup inked a deal with Long Beach-based reusable rocket maker Relativity Space to accelerate the entry of its rover into Mars.
Popshop Live (24.5 million raised)
Whatnot competitor Popshop Live is betting that live-shopping is the future of ecommerce. The West Hollywood-based company primarily focuses on selling collectables such as trading cards and anime merchandise.
In the summer of 2021, the company bolstered its team by hiring former Instagram and Instacart executive Bangaly Kaba to lead platform growth and former head of Uber Eats Jason Droege to lead expansion.
- Here Are the dot.LA/PitchBook 50 Hottest Los Angeles Startups for Q2 ›
- Here Are the LA Seed Startups Top VCs Wish They'd Invested In ›
- LA is the Third-Largest Startup Ecosystem in the US ›
- What Are LA’s Hottest Startups of 2022? See Who VCs Picked in dot.LA’s Annual Survey ›
- How To Startup: Part 1: Ideation ›
- What Are LA’s Hottest Startups of 2021? We Asked Top VCs to Rank Them ›
- Nobody Studios Plans to Build 100 Startups in Five Years - dot.LA ›
- From GameTree to Sota — Ukrainian Founders Call LA Home - dot.LA ›
Much like the rest of the U.S., the Los Angeles region is facing a venture capital slowdown.
Venture capitalists are investing less money and striking fewer deals with L.A. startups lately, according to PitchBook Data and interviews with experts. There’s been a sharp drop in the amount of money flowing back to investors, too, with a decline in public offerings or other exits by VC-backed companies.
The second quarter was still a strong one for L.A. by pre-pandemic standards, but it marks a significant slowdown after a record-smashing 2021. The cooling deal activity could continue during the current third quarter and beyond amid an uncertain economic environment and an overdue correction in startup valuations, VC executives told dot.LA.
“You’re starting to see deal flow slow down and you're starting to see a lot of venture investors take a wait and see approach,” said Brian Lee, co-founder and managing director of L.A.-based BAM Ventures.
PitchBook and the National Venture Capital Association recently released their second quarter Venture Monitor report on the investment landscape. According to PitchBook, VCs invested nearly $4.8 billion in the L.A. metropolitan area during the second quarter this year, a nearly 38% decline from the nearly $7.7 billion invested during the same period a year earlier. The number of deals dropped year-over-year from 353 to 278 from April through June.
Deal activity in the Los Angeles MSA since 2019. Source: PitchBook Data
Deal activity during the three-month period is also down from the first quarter of this year, when startups collectively received $7 billion from VCs across 337 deals. Still, L.A.’s second quarter deal count and investment volume were at or above quarterly figures in 2019 and 2020, according to PitchBook.
“The second quarter still maintained a lot of momentum from 2021 and the first quarter, especially if you're looking at the actual capital going to startups remaining historically high,” PitchBook Venture Analyst Cameron Stanfill told dot.LA. “There's still a lot of money that's going into startups right now.”
And L.A. has been one the strongest markets so far this year, trailing only the Bay Area and New York regions in deal count and deal value, according to the Venture Monitor report. As of June 30, there were 669 deals here collectively worth $12.6 billion.
Still, experts say investors are being more rigorous and selective. Taj Ahmad Eldridge, a co-founder and general partner at Include Ventures, said he’s seen funds “taking their time” to do more due diligence before making an investment.
“They're looking for more traction on the customer side,” he said of what funds are seeking lately. Startups do “not necessarily have to have some revenue piece of that, but at least just a pathway to where they could figure this out”
Indeed, startup founders are having a harder time raising funds just from intangibles like vision, a beta product or celebrity involvement, said Joey Boukadakis, founder of L.A.-based General Specific, which advises early and growth stage startups.
“The main variable it feels like investors are focusing on is this signal that someone is willing to pay you for something,” Boukadakis said. “Companies with some kind of revenue around what they're doing in today's world most likely have a better chance of having conversations and bringing on additional capital.”
That could be bad news in the short term for startups in emerging tech spaces like Web3, a decentralized vision for the internet based on blockchain technology. Crypto and NFTs may very well change the digital world as we know it, but not anytime soon.
Investing activity in Web3 hasn’t stalled, but valuations in that space have “come down quite a bit,” said Anna Barber, partner at L.A. VC firm M13. (Disclosure: M13 is an investor in dot.LA)
“We're talking about an emerging market where six months to a year ago, there might have been more appetite for risk,” she said. “We’re very interested in the sector. We're continuing to invest. I think it's more about measuring risk and potential differently in terms of how and when and how much to invest.”
The amount of capital flowing back to investors dried up during the second quarter. Pitchbook recorded 24 venture-backed company exits collectively worth $95.75 million in the L.A. region during the second quarter. This is a sharp drop from the whopping $5.7 billion that returned to investors across 27 deals during the same period last year. This decline comes amid a fall in initial public offerings, public listings and special purpose acquisition company (SPAC) mergers, PitchBook noted.
Early-stage investments, which are generally the most distant from the public market, appear to be largely insulated from current economic troubles. Nationwide, there’s been little slowdown in angel and seed round investment activity, per PitchBook Data.
That tracks with what Minnie Ingersoll has seen as a partner at early stage investor TenOneTen Ventures. She noted the L.A.-based VC just closed an investment last week and another in June, keeping pace with the firm’s usual deal flow.
“I would say there has been less change than I have expected,” Ingersoll said.
One change she has noticed is an increase in extension or “bridge rounds.” These smaller raises are aimed at giving startups more breathing room to weather an economic storm that could last months if not years.
“That's giving them extra runway,” Ingersoll said. “And that means they don't have to go hit the market right now.”
- Venture Deals in LA Are Slowing Down, And Other Takeaways From ... ›
- Here Are Los Angeles' Top Venture Capitalists - dot.LA ›
- How a Fragile Economic Climate is Impacting SoCal VCs - dot.LA ›