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WndrCo, the venture capital firm founded by former DreamWorks CEO Jeffrey Katzenberg, is looking to raise $450 million for its second fund, according to regulatory filings.
WndrCo co-founding partner and managing director Sujay Jaswa signed off on the fund, which has yet to secure any capital, in a Securities and Exchange Commission filing on April 20. The new fund follows Hollywood-based WndrCo’s $600 million first fund, which it raised in 2017.
In a statement to dot.LA, Jaswa said the venture firm's “focus is on cybersecurity, future of work, and consumer technology.” WndrCo recently participated in a $42 million Series B round for Silicon Valley cybersecurity firm Twingate, as well as New York-based food brand startup Popchew’s $3.6 million seed round in March.
Speaking on a panel at the Upfront Summit this March, Katzenberg noted that WndrCo is also a big believer in NFTs and blockchain technology. Among the firm's Web3-related investments include NFT exchange OpenSea, cryptocurrency exchange Gemini, sports-focused NFT exchange SportsIcon and OnChain Studios, which sells digital collectible toys as NFTs.
“I'm still waiting to see and to understand the values of some of the things around crypto—but NFTs, I’m all in,” Katzenberg said at the conference. “I think the media companies today are the next ones that are going to actually understand and get [to] dive in here and get real value out of [NFTs], and that's here in Los Angeles.”
Update, April 21: This article has been updated to include comment from WndrCo.
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Jeffrey Katzenberg didn’t mince words when addressing the elephant in the room during his appearance at the Upfront Summit on Wednesday—saying he learned valuable lessons from the rapid demise of his short-form TV app Quibi.
“I'm humbled by [Quibi’s] failure; I’m glad we got out when we did and we were able to return money to investors,” Katzenberg said onstage at the venture capital conference in Downtown Los Angeles. He argued that while Quibi’s content was solid, the startup “didn’t have product-market fit”—alluding to its April 2020 launch amid the early days of the coronavirus pandemic.
The app’s thesis was to give Hollywood stars like Liam Hemsworth, Idris Elba and Queen Latifah a platform to produce content segmented into 10-minute episodes and made specifically to be viewed on mobile phones. But the pandemic, which kept people confined to their homes, destroyed Quibi’s market for on-the-go content to be consumed during viewers’ commutes. Some six months after launching with $1.75 billion in funding to its name, Quibi folded; Katzenberg returned roughly $600 million to investors and sold the app’s library to Roku.
“The content that was made, I have to say, actually delivered on the promise of that in an incredible way, and it’s worked brilliantly for Roku,” Katzenberg said. “We didn't have product-market fit… I’m not looking for an excuse. I got my shot, people backed us, gave us an incredible amount of enthusiasm, support, access, money—everything we wanted and needed to get a shot at this, and it didn’t work. And we moved very quickly to shut it down when it didn't work.”
With Quibi in the rearview, Katzenberg has turned his focus to WndrCo, his Beverly Hills-based venture capital firm that is mostly investing in non-media ventures. The former Disney chariman and DreamWorks co-founder noted that he’s particularly optimistic on NFTs; WndrCo has invested in at least six NFT-related companies since last year, according to PitchBook data, including crypto exchange Gemini, sports NFT exchange SportsIcon and OnChain Studios, which sells digital collectible toys as NFTs.
Katzenberg also shouted out WndrCo’s investments in OpenSea, one of the most popular NFT marketplaces, and Dapper Labs, the company behind NFT platform NBA Top Shot as well as Dapper Collective, the virtual influencer startup formerly known as Brud. WndrCo founding partner Sujay Jaswa, who joined Katzenberg onstage, said the VC firm’s investment approach is centered around the founders it chooses to back.
“Ninety-nine percent of the time, almost nothing we’ve invested in at the beginning is what it became—but the person [leading the venture] is who drove the outcome,” Jaswa said. “That’s really what we bet on with almost all of these earlier stage things, and that’s what worked for us in NFT's.”
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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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