Los Angeles is seeing a renaissance in medical technology.
Earlier this month a venture capital firm headed by two former Amgen executives announced they raised $500 million to boost and incubate new life science and biotech companies across Los Angeles. And the firm, Westlake Village Biopartners, is working to develop a 30,000 square foot campus in Thousand Oaks.
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Across town, the 20,000 square foot LABioSpace is set to open. Funded through the county, federal funds and private donations, the incubator will feature lab space dedicated to bioscience research and collaboration and is designed to house up to 25 companies.
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And yet, another "innovation hub" backed by the county and private funds called BioScienceLA is expected to launch its own space in Culver City next year.
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"For years, we have lost talented scientists and entrepreneurs to other regions, due to lack of investment capital and start-up and expansion space for growing companies," said David J. Whelan, the CEO of BioscienceLA. "We are finally at an inflection point, with funding, space, and talent supporting each other to grow the LA life sciences ecosystem."
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Here are some trends to watch in healthtech.
</p><h2>Telemedicine Brings Health Access and Equity to Patients at Home</h2><p>
Doctors visits and at-home testing have been made easier during the pandemic as more companies launch platforms to deliver health information to patients from home.
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COVID-19 has sparked new demand for telehealth services to test and treat consumers. And more clinics and hospitals are adopting the tech. According to a PitchBook <a href="https://pitchbook.com/news/reports/q2-2020-emerging-tech-research-retail-health-wellness-tech" rel="noopener noreferrer" target="_blank">report</a>, companies in the virtual health segment raised about $534 million in venture funding in the second quarter of 2020.
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L.A. startups like Healthvana and <a href="https://dot.la/consejosano-2649513485.html" target="_self">ConsejoSano</a>, a platform for patients and providers that aims to make healthcare easier to access for multiple cultures and languages. Last week, the North Hollywood company raised $17 million to build out its services like scheduling appointments and coordinating transportation to a patient's provider.
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Meanwhile, Los Angeles-based MotiSpark developed a digital tool to send personalized reminders to users. And in September, the Santa Monica-based prescription discount platform GoodRx, <a href="https://dot.la/goodrx-app-2647780743/particle-2" target="_self">went public</a> and became the most downloaded medical app, boasting five million active users and 70,000 pharmacies.
</p><h2>More Investment in Diagnostics </h2><p>
Diagnostic companies typically have a hard time securing capital, but this year changed that. Kevin Zhang, a partner at Upfront Ventures who leads health and biotech investments, said the life sciences industry has seen a spike in gene therapeutics companies over the last few years. And the wave of new drugs brings with it new demand for lab testing.
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"Frankly, it was a bit of a dead zone for venture investment," he said. "It's one of the least sexy areas to put money into. Now that's grown tremendously"
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The pandemic has only accelerated that need, Zhang said, and investors have shifted their attitude about biotech companies focused on diagnostics.
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Since March, L.A. biotech companies and labs like <a href="https://dot.la/coronavirus-rapid-test-curative-los-angeles-2645906983.html" target="_self">Curative</a> have pivoted to developing and administering COVID-19 tests. The team's testing technology is now being deployed across the nation. Meanwhile, several companies are now producing <a href="https://dot.la/la-small-business-ecommerce-2649455924.html" target="_self">vaccines</a> and COVID-19 therapeutics as the nation gears up for mass distribution.
</p><p class="shortcode-media shortcode-media-rebelmouse-image">
<a href="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMjY3OTM3MC9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYxMTI4MjEwMX0.3lEVWrHJp9r5rJpYEhx7sQUk-RHdMhOhdnzevOukAME/img.jpg?width=980" target="_blank"><img type="lazy-image" data-runner-src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMjY3OTM3MC9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTY3NDM1NDEwMX0.Ty0bKPHFYY_e-6AwKcQVTsidCEVZpoBxCSDKboXV7iY/img.jpg?width=980" id="fa188" class="rm-shortcode" data-rm-shortcode-id="3b5d1d9c57302ba86f6825ac3c151896" data-rm-shortcode-name="rebelmouse-image" alt="Headspace app" /></a>
</p><h2>Employers Using Mental Health and Wellness Tech </h2><p>
The anxiety and stress caused by the pandemic has stoked demand for mental and physical wellness apps, including several based in Southern California. Experts see interest continuing into the new year as these wellness companies tap corporate partners to drive growth.
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Earlier this year, Headspace, the Santa Monica-based meditation app, began offering free subscriptions to healthcare providers and teachers.
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"We've seen explosive growth," said Headspace co-founder and CEO Rich Pierson at dot.LA's Summit in October. "CEOs have realized now that mental health is being discussed in every boardroom. That was not the case pre-COVID."
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Calm, Talkspace and BetterHelp are among the handful of tech startups selling meditation classes and more affordable therapy access. And both Calm and Headspace offer a corporate product as employers and insurance companies have worked to make mental health resources more accessible since the pandemic began.
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Exercise subscription platforms are also seen a boom. Apple launched its Fitness+ app in December, whose classes are filmed at a Santa Monica studio. As gyms remain closed in many parts of the country, consumers are buying up Pelotons and Mirrors. The craze is expected to continue to grow into the next year with several Southern California companies poised to benefit.
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Indoor cycling app Zwift scored a $450 million investment in September. The Long Beach-based company is taking on Peloton building "hardware," presumably stationary bicycles, to go along with its 3-D generated worlds where users can compete from their living room. Another L.A.-based company Presence Fit <a href="https://dot.la/presence-fit-2648121173/particle-2" target="_self">raised $1 million</a> in October for its two-way live interval training classes. And then there's FightCamp, which promises to capture the feeling of a boxing gym in your home.
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Makers of rockets and video games — and a now-notorious short-form streaming service that ended in spectacular failure — dominated the list of biggest L.A. venture deals in 2020.
The top ten raises amounted to more than $5.3 billion, according to data from Pitchbook. Of the top ten biggest raises, Elon Musk's SpaceX dominated the list. The rocket maker went back to the venture capital well three times this year, most recently in August when it raised $1.9 billion of Series N venture funding from Capital Partners and Legendary Ventures at $44.10 billion valuation.
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<a href="https://www.foxbusiness.com/technology/spacex-worth-almost-100b-after-new-funding-round-report-says" rel="noopener noreferrer" target="_blank">The company is now reportedly in talks </a>to raise yet another round at an estimated post-money valuation of $92 billion, which would nearly triple its valuation from its January Series L. The company got a boost this month when the Federal Communications Commission awarded it $885.5 million to provide satellite internet service to 642,925 rural homes and businesses over the next decade and more government contracts are likely on the way. Will SpaceX finally go public next year? <a href="https://www.cnbc.com/2020/12/09/ipos-vs-spacs-what-to-expect-in-2021.html" rel="noopener noreferrer" target="_blank">Some analysts think so. </a>
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Those looking for a space play at a lower valuation have turned to Relativity Space, which uses 3-D printers to make rockets. Founded by SpaceX alum Tim Ellis out of Y Combinator in 2015, the Long Beach company raised a $500 million Series D round led by hedge fund Tiger Global Management last month that values the company at $1.8 billion.
<a href="https://spacenews.com/relativity-space-raises-500-million/" rel="noopener noreferrer" target="_blank">Ellis said it was the largest Series D in Los Angeles history</a> and it was also one of the largest raises of any kind of 2020.
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While SpaceX and Relativity Space continue to soar higher, Quibi
<a data-linked-post="2648433519" href="https://dot.la/quibi-2648433519.html" target="_blank">crashed and burned</a> after a disastrous April debut. Despite a costly marketing budget that included a Super Bowl spot and high-profile talent deals, the Jeffrey Katzenberg and Meg Whitman-led venture was never able to make a mark in the highly competitive streaming wars.
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The company closed a $750 million funding round in March but investors Alibaba Group, Hollywood Studios International, Pegasus Tech Ventures and WndrCo will likely see little of that money ever again.
<a href="https://www.digitaltveurope.com/2020/12/02/quibi-shuts-down/" rel="noopener noreferrer" target="_blank">Quibi quietly shut down earlier this month,</a> after Katzenberg said in October that he did not see a successful path forward.
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Two beneficiaries of the stay-at-home economy round out the list of the biggest raises in 2020. Zwift, a Long-Beach based online fitness platform
<a href="https://www.prnewswire.com/news-releases/zwift-raises-450-million-investment-series-c-round-led-by-kkr-301131915.html" rel="noopener noreferrer" target="_blank">raised nearly half a billion dollars in Series C funding </a>in September. And then there's Scopely, which <a href="https://dot.la/doubling-valuation-scopely-is-now-one-of-the-top-la-tech-startups-2648525465.html" target="_self">raised $340 million in Series E funding in October</a> at a $3.3 billion valuation, which nearly doubled the company's $1.7 billion post-money valuation from a $200 million deal in March.
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The latest raise makes Scopely
<a href="https://dot.la/doubling-valuation-scopely-is-now-one-of-the-top-la-tech-startups-2648525465.html" target="_self">one of the most valuable tech companies in Los Angeles, </a>which is a victory – on paper for now – for seed investors Greycroft, The Chernin Group and TenOneTen ventures. They all got in on the ground floor at a $40 million post-money valuation in 2012. Upfront Ventures, BAM Ventures and M13 got in on the 2018 Series C at a $710 post-money valuation.
</p><h2>LA's Top Ten Raises of 2020</h2><iframe class="airtable-embed" frameborder="0" height="533" onmousewheel="" src="https://airtable.com/embed/shr27IbA0kVTwJloR?backgroundColor=blue&viewControls=on" style="background: transparent; border: 1px solid #ccc;" width="100%">
</iframe><p><em>Lead art by Candice Navi</em></p>
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The pandemic has forced many gyms to close and emptied others, catapulting the at-home fitness industry.
Zwift, a social fitness application that lets users virtually train together on their treadmills and bikes, is taking advantage of the shift.
The Long Beach-based company announced Wednesday it raised $450 million to build out Zwift-branded "hardware' for fitness buffs that uses the company's 3-D generated worlds to ride or run alongside others. It's also looking to expand into esports as it builds out the 10 virtual worlds it offers in the platform. In the summer, Zwift hosted a virtual Tour de France in July.
<p>But its growth has been hampered. Right now, users pay $14.99 a month for Zwift's software but must pair it with a third-party stationary bike or treadmill such as Bkool, Elite, Cylotronics. The company hasn't specified what hardware it aims to create, but offering a treadmill or cycle could help it go head-to-head with companies like Peloton, which last week reported its first quarterly profit after sales surged 172% as homebound customers stocked up.</p>
<p>Peloton recently dropped the cost of its basic bikes, which <a href="https://www.theverge.com/2020/9/8/21427003/peloton-new-treadmill-bike-plus-exercise-equipment-features-price" rel="noopener noreferrer" target="_blank">sell for $1,895</a>. Their accompanying app costs $39 a month, although a $12.99 membership is available for those without the equipment. </p>
<p>"With this investment, Zwift is primed to operate in a broader fitness market and deliver on our ambition to provide gamified fitness through integrated software and hardware, to anyone who wants to have fun while getting fit at home," said Zwift CEO Eric Min in a statement. </p>
<p>The competition is heating up. This week, Apple announced that it will release <a href="https://www.businessinsider.com/apple-fitness-plus-app-take-on-peloton-2020-9" rel="noopener noreferrer" target="_blank">Fitness Plus for $9.99 a month</a> or $79.99 a year. The service offers workouts from the "world's best trainers" in yoga, cycling, dance and more with Apple Music integrated. </p>
<p>Since it launched in 2015, Zwift has registered more than 2.5 million accounts, according to the company. </p>
<p>The round was led KKR, accompanied by other investors including Permira, Specialized Bicycle Components' venture capital fund, Zone 5 Ventures and the Amazon Alexa Fund and existing investors including True, Highland Europe, Novator and Causeway Media.</p>
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