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XTechstars LA Unveils Health Care-Heavy Spring 2022 Accelerator Class
Francesca Billington is a freelance reporter. Prior to that, she was a general assignment reporter for dot.LA and has also reported for KCRW, the Santa Monica Daily Press and local publications in New Jersey. She graduated from Princeton in 2019 with a degree in anthropology.
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In recent years, Techstars Los Angeles managing director Matt Kozlov has witnessed local investors pour more and more capital into health care startups across the region. It’s this sector—not entertainment or the creator economy—that he hopes to spotlight through the startup incubator’s next accelerator program.
Health care, after all, is a difficult market for startups to break into “if you don’t have support of the large institutional players,” said Kozlov, who helped Cedars-Sinai Medical Center launch a health-tech accelerator in partnership with Techstars several years ago.
On Monday, Techstars L.A. officially unveiled its spring 2022 accelerator class—and in line with Kozlov’s belief in the health-tech space’s massive potential, five of the 12 companies involved are developing digital health tools.
The 13-week program will bring early- to mid-stage startups from places as far-flung as London, Singapore and Mauritius to the accelerator’s new offices in Culver City. After meeting with some 250 mentors and potential investors in the Techstars community, the founders will select a core group of “board members” to help them prepare for a demo day where they’ll ideally secure investor capital.
The program offers each startup a $20,000 investment from Techstars L.A. in exchange for a 6% equity stake in their company. By the time it wraps, some founders will have already started fundraising; two companies in the spring 2022 cohort have already closed funding rounds since being accepted, Kozlov noted.
Beyond digital health, the founders selected for the spring class are building hybrid rockets, SaaS companies, proptech applications and services for e-commerce and retail enablement. Kozlov hinted that the accelerator’s next cohort, slated to start in September, will center around Southern California’s booming aerospace industry.
Here are the startups in Techstars L.A.’s Spring 2022 Class:
Aware Health partners with employers to provide muscle, nerve and joint pain care to their employees.
Bean is a marketplace and workflow management platform for accounting services.
Equatorial Space develops hybrid-engine rockets designed to make space launch more affordable.
E-commerce retailers can integrate GoFlyy’s platform to support customers making on-demand deliveries and returns.
Hormona is a digital health startup offering at-home hormone testing and a hormone management platform for women.
Max Retail (formerly SwapRetail) helps independent retailers and brands sell unsold inventory through a market network that includes B2B, B2C and liquidation channels.
Mind-Easy partners with employers to provide their workforce with culturally sensitive mental health resources.
Modal Living designs, manufactures and installs modular backyard dwellings and offices.
Next Generation Quantum is a quantum computing hardware and programming company.
Pear Suite’s cloud-based platform that assesses “social drivers of health” for older adults.
Rwazi is a data services company providing organizations with on-ground data on products, services and activities from Africa.
SQUID iQ is a SaaS company offering hospitals a health care technology management platform for medical devices.
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Francesca Billington is a freelance reporter. Prior to that, she was a general assignment reporter for dot.LA and has also reported for KCRW, the Santa Monica Daily Press and local publications in New Jersey. She graduated from Princeton in 2019 with a degree in anthropology.
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Faraday Future Reveals Only 401 Pre-Orders For Its First Electric Car
David Shultz is a freelance writer who lives in Santa Barbara, California. His writing has appeared in The Atlantic, Outside and Nautilus, among other publications.
Electric vehicle hopeful Faraday Future has had no shortage of drama—from alleged securities law violations to boardroom shake-ups—on its long and circuitous path to actually producing a car. And though the Gardena-based company looked to have turned a corner by recently announcing plans to launch its first vehicle later this year, Faraday’s quarterly earnings report this week revealed that demand for that car has underwhelmed—to say the least.
Among the business updates and organizational changes disclosed in its first-quarter earnings release on Monday, the company tucked in one startling number: 401. That’s the number of paid pre-orders that Faraday said it had received for its first production vehicle, the FF 91, as of March 31.
The paltry number is especially interesting given the context of the automaker’s rocky history. Earlier this year, the publicly traded company found itself in hot water with the Securities and Exchange Commission, which is now investigating allegedly inaccurate and misleading statements made by Faraday to investors. Those statements, according to an internal review by the company, include misrepresenting how many pre-orders it had received for the FF 91: Originally, Faraday reported more than 14,000 reservations on its books, but it later emerged that an overwhelming bulk of those pre-orders were unpaid—with only a few hundred actual, paid deposits on the vehicles. (What’s more, nearly 80% of those pre-orders were allegedly from a single, undisclosed company that may have been an affiliate of Faraday’s, according to a blistering report by short-selling firm J Capital.)
Faraday’s earnings report also highlighted first-quarter developments including leadership moves, production partnerships and its unveiling of the first production-intent FF 91. The company noted that it had received a dealer and distributor license from the state of California that should allow Faraday to sell vehicles online anywhere in the U.S. It also signed a lease for a showroom in Beverly Hills, and is currently on the search for a second such location in the U.S. Additionally, Faraday Future’s second car, the FF 81, will be produced in South Korea in partnership with auto manufacturer Myoung Shin, with production slated to begin in 2024.
In terms of financials, Faraday reported an operating loss of approximately $149 million in the first quarter—up from a loss of $19 million in the same period last year. The company has $706 million in total assets on its balance sheet, including $276 million in cash. Faraday’s stock closed Wednesday’s trading at $3 per share—down roughly 50% since the start of this year.
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David Shultz is a freelance writer who lives in Santa Barbara, California. His writing has appeared in The Atlantic, Outside and Nautilus, among other publications.
Meet CropSafe, the Agtech Startup Helping Farmers Monitor Their Fields
David Shultz is a freelance writer who lives in Santa Barbara, California. His writing has appeared in The Atlantic, Outside and Nautilus, among other publications.
This January, John McElhone moved to Santa Monica from, as he described it, “a tiny farm in the absolute middle of nowhere” in his native Northern Ireland, with the goal of growing the crop-monitoring tech startup he founded.
It looks like McElhone’s big move is beginning to pay off: His company, CropSafe, announced a $3 million seed funding round on Tuesday that will help it develop and scale its remote crop-monitoring capabilities for farmers. Venture firm Elefund led the round and was joined by investors Foundation Capital, Global Founders Capital, V1.VC and Great Oaks Capital, as well as angel investors Cory Levy, Josh Browder and Charlie Songhurst. The capital will go toward growing CropSafe’s six-person engineering team and building up its new U.S. headquarters in Santa Monica.
The nascent agtech company began in 2019 as a project between McElhone and his co-founder and high school classmate, Micheál McLaughlin. Growing up in the Northern Irish countryside, the pair developed an interest in technology, which led to ideas about how such technology could aid the agricultural communities they were raised around.
“We noticed that there was a lot of really new, cool technology coming into the farming market at the time,” McElhone told dot.LA. “But every single farmer in our area hadn't a clue how to get started with all this new fancy technology, because they would have to go to training sessions or learn how satellite imagery from NASA works. And farmers—their job is to farm, not to interpret data.”
The first version of CropSafe’s software aimed to bridge that gap. At its core, the platform is an interpretation engine that scrapes and parses through troves of weather data and satellite imagery to find the information that farmers need to grow and harvest more effectively. “CropSafe did that work for you and spots useful nuggets like, ‘Hey, there's blight in field no. 14; here's the exact location and what you need to do next,’” McElhone explained.
But the project, which began simply as a tool for friends and family in Northern Ireland, started drawing attention from users around the world; to the founders’ surprise, people began offering to pay for the service. “That was kind of a turning point—realizing it wasn't just our 200 people that wanted to use it,” McElhone said. So he packed his bags and moved to Southern California at the start of this year to try to build out the software in one of agtech’s hottest markets.
McElhone and McLaughlin now believe there’s a better way forward that would position CropSafe as more akin to a fintech platform for farmers: Because the software collects so much data on farms, it can offer insights into removing bottlenecks that farmers could leverage to secure crucial financing for equipment and other needs.
“If a farm is leasing three combines this year, with the data we have on that farm [and its] crops, we might be able to say: ‘Hey, if you lease an additional combine this year, we know that you will produce so-and-so additional yield and produce $25,000,’” according to McElhone. In an ideal scenario, CropSafe could allow the financing for that combine to be approved instantly on the strength of the data on its platform; the farmer clicks a button on the app, and the combine gets delivered the next day.
So far, McElhone is tight-lipped about partnerships in this area of its business, but said announcements should be coming this summer. The company is also considering offering farmers insights into the best times and places to sell crops, with CropSafe taking a small cut of revenues for the service. (The idea is that farmers would only pay when they see increased sales from using CropSafe’s insights, McElhone said.)
But the move to Santa Monica has already proven fertile for the company, which is planning to announce partnerships with other agtech companies that would allow CropSafe to act more as an operating system—one connecting autonomous tractors, weathers sensors, and other “internet of things” technologies to ensure better, more sustainable crops. With local startups like Future Acres and Abundant Robotics already operating in the space, CropSafe seems poised to benefit from Southern California’s position as a hub for agtech in the U.S.
David Shultz is a freelance writer who lives in Santa Barbara, California. His writing has appeared in The Atlantic, Outside and Nautilus, among other publications.
Cedars Sinai Health Ventures’ Maureen Klewicki on How Tech Is Changing Health Care
On this episode of the LA Venture podcast, Cedars Sinai Health Ventures’ Maureen Klewicki talks about price transparency for health care, the labor shortage crisis and emerging payment models.
Klewicki got her start working in the venture capital industry as the program director at the Techstars Healthcare accelerator. She then spent five years working at L.A.-based venture firm Crosscut. At Cedars Sinai, she helps cut checks of between $1 million and $10 million from the venture firm’s $100 million fund.
“There's one million and one problems right now Cedars Sinai is facing,” Klewicki said. The fund is structured in part to focus on the long-term future of the health care industry, but about half of it is focused on the immediate problems that Cedars doctors and staff are facing.
To get an understanding of their pain points, Klewicki said she talks directly with leaders of departments from nursing to surgery, asking them: “‘What are you thinking about? Where do you need help? And where can we find a company that we can plug in right now?’”
The pandemic has taken a toll on health care workers, Klewicki said, exacerbating a huge nursing shortage and adding more trauma to an already overworked labor pool. But Klewicki also says that the labor force crisis could be a thesis for an entire fund.
“Could you solve it through the use of smart robotics? Could you solve it through computer vision? Could you solve it through ambient scribing?,” she asks. ”Can you do things that make it so that nurses aren't spending 30% of the time logging things into the EHR?”
Another crucial issue for Cedars: keeping the cost of care down. One strategy has been keeping patients out of the hospital if they don't need to be there, and making sure they have a range of services at home. There are a number of different solutions that are being developed toward that end, Klewicki said, from teams that are made up of both health care professionals and tech entrepreneurs.
“You might see a team that is half-Uber and half-health care execs,” she said. “And so that's where I think you start to see these really cool combinations of technologists and people that know health care really well.”
Klewecki said recent changes in how hospitals get reimbursed have incentivized startups that focus on a “value-based” health care model that focuses on preventative care.
“Because that overall care team approach is what keeps the cost of care down,” she said “And so you see a lot of movement from VC-backed and private equity-backed companies in the value-based care space because that's where the payment models are moving.”
That might mean setting up urgent care facilities in different neighborhoods, sending providers to aid patients at home or focusing more on telemedicine rather than bringing patients to hospitals.
Klewicki added, “If you do it right, you can have a very valuable company that is improving outcomes for patients.”
Click the link above to hear the full episode, and subscribe to LA Venture on Apple Podcasts, Stitcher, Spotify or wherever you get your podcasts.
dot.LA Engagement Fellow Joshua Letona contributed to this post.
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