How Dollar Shave Club, eSalon Built a 'Billion Dollar Brand'

Lawrence Ingrassia

Lawrence Ingrassia is an award-wining journalist and the author of " Billion Dollar Brand Club."

How Dollar Shave Club, eSalon Built a 'Billion Dollar Brand'
  • Relying on analytics, the founders of eSalon who knew nothing about hair dye, built a trendsetting personalized hair color brand that did $30 million in sales
  • The e-commerce brand uses individual data, machine-learning algorithms and predictive analytics to create formulas that keeps customers coming back
  • The Takeaway: Retail is being upended by direct-to-consumer companies that can acquire key metrics to customize products and retain shoppers

In recent years, you no doubt have seen a growing number of new brands pop up everywhere you go online – and you've probably bought some. Where did they come from? Who are the entrepreneurs behind them? Why did they think they could take on long-dominant brands?

This is an excerpt from " Billion Dollar Brand Club," authored by award-wining journalist Lawrence Ingrassia and published on January 28 by Henry Holt and Company.

The book explores how an unlikely band of entrepreneurs launched a business revolution in the way new brands are created and sold online. One of the most successful direct-to-consumer brands, Dollar Shave Club, was founded in Los Angeles and got its initial seed funding from Science Inc. in Santa Monica. This excerpt from Chapter 6, "The Algorithm is Always Right," tells the story behind eSalon, based in El Segundo, and how it tapped data analytics to create customized hair coloring.

The customer, a woman in her mid-to-late forties, knows what she wants when she logs onto eSalon.com to order its customized hair coloring for the first time: dye to match her natural blonde color – and cover up her grays – with the lightest blonde shade it offers. As she clicks through a series of about a dozen questions, the algorithm inside eSalon's computers starts churning away. Without anyone from the company having met or even talked to her, it will understand her hair coloring better than she does by the time she finishes answering the questionnaire.

How long is your hair? it asks. How much gray do you have? How straight or curly is your hair? How thick is your hair? What is your ethnicity? What color are your eyes? What is your natural hair color? What is the closest shade to your natural color? Would you like to maintain your current color?


To help her, the questionnaire shows thirty-one photos of different shades of blonde, with very small gradations from lighter to darker colors. At the end, she selects the lightest blonde color eSalon offers, just as she intended. But that's not exactly what she will receive.

eSalon has collected data from more than five million people. Based on this woman's answers, it knows the best color formulation to achieve the blonde look she wants, regardless of what she thinks. eSalon's computers have learned from crunching the data that many first-time customers who fit her profile and order the lightest blonde dye have been disappointed; they felt their hair came out looking too blonde – too "hot" in hair coloring jargon. The numbers show that eSalon has a higher reorder rate from customers who asked for a slightly darker color for their next order, so that their hair wouldn't come out looking quite so light.

Knowing all of this, eSalon automatically sends the customer – without telling her – a formulation that has 98 percent of its lightest blonde share with 2 percent blue added to soften the color, or cool it, rather than 100 percent blonde. "After seeing this data, we adjusted our algorithm so that new customers who are a natural pure blonde and want to keep that look automatically get that little bit of blue added," explains Tom MacNeil, eSalon's chief technology officer. "They're happier with the result, even though they're asking for the blondest of blonde that we have."

For eSalon, and almost all direct-to-consumer brands, data is the coin of the realm. The data they collect directly from each customer provides a significant advantage over bigger, long-established brands. Clairol doesn't have this data, because the customers they deal with directly are retailers. The people who use the product are largely anonymous to Clairol; they walk into a drugstore, pick a box of hair coloring off the shelf, pay for it, and walk out.

eSalon's shelf is its website, and it collects information about each customer who walks through its digital door and answers its questionnaire. The longer a woman remains a customer, the more eSalon knows about her – and not just her. eSalon aggregates all of that individual data and uses machine-learning algorithms and predictive analysis to inform virtually everything it does: from adjusting its product formulations to introducing new products (like color for highlighting hair) to testing seemingly insignificant word changes on its web pages. "In the end, we're a tech company selling a beauty product," says Tamim Mourad, one of eSalon's co-founders.

Data mining is critical to the biggest challenges facing all direct-to-consumer brands: holding down the cost of attracting customers and keeping them after a purchase or two. Using the data it has gathered, eSalon has improved its retention rate from below 50 percent to about 70 percent on its customers' initial orders. One of the key metrics, especially for subscription companies, like eSalon, Dollar Shave Club, and Hubble, is a customer's lifetime value, or how much she will spend over time. The cost of acquiring customers can be offset only if a lot of them become repeat customers who buy month after month or, even better, year after year. "It's all about retention, because nobody makes money on the first order," explains Francisco Gimenez, another co-founder.

Businesses have used predictive analytics for the past couple of decades, but the growing power of computers, along with the ability of online brands to gather huge amounts of data, has made machine learning central to their success.

Tamim Mourad and several of his colleagues at eSalon discovered from experience the importance of technology to a startup. In 1998, before the direct-to-consumer brand revolution began (indeed, before many of the entrepreneurs behind many of these startups had graduated from college or even high school), they started an internet company, while they were in their twenties. The company, PriceGrabber, was one of the original online price comparison sites. In 2005, Experian bought the company for $485 million – yielding a huge gain on the founders' total investment of $1.5 million.

After taking a couple of years off, the PriceGrabber founders began brainstorming about starting another business.

In the fall of 2008, Mourad and his wife were having dinner with a couple who owned a beauty salon in Beverly Hills. The other woman, who was a hair colorist, tossed out a business idea. "She said that women who color their hair at home don't do it well, because there is a dearth of information," Mourad says. What about starting a web site that explained how to dye your own hair? He didn't see a way to make money from that. But he asked her, "Is it possible to formulate color for someone sight unseen, and mail them something they apply at home? If that works well, then you're delivering a product that is better than the standard hair coloring in a box at drugstore, that would approximate what someone could get at a hair salon. If you could do that, you could charge a price that was a premium. There's a business model."

He went back to his former PriceGrabber colleagues, all men who knew nothing about hair coloring. But the more they thought about the idea, the more they liked it.

It was a business ready for disruption, they decided. Off-the-shelf packaged brands were fine, but most offered only around fifty pre-mixed shades. "Many people who color their own hair at home in general are not happy, because the results are mixed," Francisco Gimenez notes. "But it is affordable, which is why they do it. At the high end, salons charge on average around $60 for base color, though it can go as low as $45 in some cities and is more like $100 or $150 in bigger metro areas."

The PriceGrabber guys concluded there could be an opening for a new brand priced about $25. In today's global marketplace, it would be easy to find suppliers to sell them professional-grade ingredients that go into hair coloring formulations – dyes, modifiers (to stabilize color tones), vitamins (to moisturize the hair), antioxidants, hydrogen peroxide (to remove the old color and activate the new dye), among others. The biggest challenge would be to figure out how to combine all these ingredients to mimic what a stylist does in customizing color for each woman who comes into a salon. "Can you formulate hair coloring for someone sight unseen?" Mourad says. "We had to figure out how to test that idea."

They first did a proof-of-concept test to see if women might be interested in buying customized color online. They created a rudimentary web site and then hand-mixed colors for about fifty women who had signed up, submitted a photo, and said what color they wanted. Then the women were asked if they liked the color better than the results they got with a do-it-yourself kit at a drug store. "We recruited people who were willing to put this product on their hair, with no idea who we really are. The results were positive enough for us to say we have something," he recalls.

The next step: tapping their knowledge of tech and data science to figure out how to replicate color customization on sale, for fifty thousand women, not just fifty. "We wanted to do something that was really innovative, not bullshit innovative," Mourad says.

Omar Mourad, Tamim's younger brother and another of PriceGrabber's co-founders, read everything he could about dyeing hair. "I didn't have any tangible color experience applying it on any person's hair. But I became a theoretical expert," Omar says.

Over the next several months, he and Gimenez took the lead in translating the rules of hair coloring into software that would determine the right customized mix to get the desired color. That can depend on a numerous variables: a woman's natural color, her current dyed color, how recently she dyed her hair, how much gray hair needs to be covered up, the texture and length of her hair. "You basically look at all of the combinations, and then build out a matrix for how to formulate," Omar explains. Using that knowledge, the team developed a questionnaire that included queries a stylist would ask a first-time customer. The questions themselves aren't rocket science. The rocket science happens when hundreds of thousands or millions of people answer the questionnaires, enabling you to gather more and more data to analyze.

The final step was to automate the formulation. In September 2010, the product was launched. As with an apprentice stylist, eSalon's formulations improved over time as the company got more customers and was able to gather more information. As of 2018, eSalon had dispensed 165,000 different formulations. That's out of a total, it calculates, of 2.2 octooctogintillion pigment variations (that would be 22 followed by 266 zeroes).

In 2019, rival L'Oreal introduced a new brand, Color&Co, that copied key features of eSalon, including an online quiz or a consultation with a colorist to help determine the "a unique custom-blend [color] made only for you." With competition ratcheting up, eSalon – with sales still a modest $30 million a year – agreed to sell a 51 percent stake to the German multinational Henkel. It cited the growing trend toward personalization and eSalon's "valuable customer insights" as reasons for its investment.

Lawrence Ingrassia's "Billion Dollar Brand Club" goes on sale January 28. He is a former business editor of the New York Times and managing editor of The Los Angeles Times.

Biometrics, Crypto, and Comfort: New Tech Lands in LA

🔦 Spotlight

Happy Friday, Los Angeles!

This week, it's all eyes, quite literally, on LA's latest tech headlines.

Image Source: World

First up, World has officially touched down in the U.S., launching its ambitious biometric crypto project in six cities, including right here in Los Angeles. Cofounded by OpenAI CEO Sam Altman, World is betting big on a future where proving you're human is just a blink away. Their tool? An orb-shaped device that scans your eyes to create a "World ID," a decentralized digital passport built for the AI era. Verified users can then claim Worldcoin, a cryptocurrency aiming to become the first truly global digital currency. To tie it all together, World has rolled out the World App, a wallet to manage your ID and crypto and World Chain, a new blockchain designed to prioritize real people over bots. The ambition is bold. The stakes are high. And the question still lingers: How much privacy are we willing to trade for convenience?

Image Source: Lyft

Meanwhile, Lyft is rolling out the red carpet, or perhaps a comfortable seat cushion, for LA’s senior citizens. The rideshare giant just launched Lyft Silver in Los Angeles, offering older adults personalized support, live phone assistance, and specially trained drivers. It's a savvy play into an often-overlooked demographic, combining technology and empathy to serve a growing market of tech-savvy seniors. Will Lyft’s new approach give them an edge in LA’s competitive rideshare market? Stay tuned, and maybe text your grandma… she just might become Lyft’s latest power user.


🤝 Venture Deals

LA Companies

    • True Classic, a Los Angeles-based apparel brand known for its better-fitting basics, has received its first institutional investment from 1686 Partners. This strategic partnership aims to accelerate True Classic's global expansion and diversify its product offerings to include women's and children's lines. The investment will also support enhancements in supply chain, logistics, and omnichannel retail operations, positioning the brand for continued growth in the global market. - learn more
    • Chaos Industries, a Los Angeles-based defense technology startup, raised $275M in a Series C round led by Accel and New Enterprise Associates, valuing the company at $2N. The company develops advanced detection, monitoring, and communication systems for defense and commercial sectors. The funds will be used to expand product development, grow the team, and scale manufacturing operations. - learn more
    • Apex, a Los Angeles-based spacecraft manufacturer, raised $200M in Series C funding to scale production of its productized satellite bus platforms. The company will use the funds to expand operations at its 50,000-square-foot facility and increase manufacturing capacity to meet demand from government and commercial customers. Apex aims to accelerate delivery timelines and support national security initiatives like the U.S. Department of Defense’s Golden Dome program. - learn more
    • Deferred, a technology-driven Qualified Intermediary, has raised $3.6M in seed funding to modernize and democratize 1031 exchanges for everyday real estate investors. The funding round was led by B Capital and Fika Ventures, with participation from strategic investors. Deferred's platform offers AI-driven compliance, robust fund security, and a no-fee exchange model, aiming to make tax-deferred real estate transactions more accessible, secure, and efficient. The funds will be used to expand access to 1031 exchanges, ensuring that every investor, not just institutional players, can leverage this powerful wealth-building tool. - learn more

    LA Venture Funds

    • Village Global participated in Stately Bio's $12M seed funding round. Based in Palo Alto, Stately Bio is a biotech startup developing an AI-powered live-cell imaging platform that enables non-invasive, real-time analysis of cell behavior, enhancing regenerative medicine and cell therapy development. The funds will be used to scale the platform and expand its pipeline of stem cell-derived therapies. - learn more
    • Riot Ventures participated in True Anomaly's recent $260M Series C funding round. Based in Centennial, Colorado, True Anomaly develops advanced spacecraft and software systems for U.S. national security missions, including its flagship Jackal vehicle designed for close-proximity operations in orbit. The funds will be used to support upcoming space missions, expand manufacturing capabilities, and grow the company's workforce. - learn more
    • Navitas Capital led a $10.5M Series A funding round for Field Materials, a Charlotte, North Carolina-based startup that automates construction material and equipment procurement using AI. Field Materials' platform leverages proprietary large language models to process vendor quotes, delivery slips, and invoices, integrating the data into major construction accounting systems. This approach reduces purchase order and invoice processing time by 90%, improves margins, and helps construction companies secure volume pricing. The funds will be used to double Field Materials' team and triple its revenue in 2025, accelerating the delivery of AI capabilities to meet growing demand in the construction industry. - learn more
    • Bold Capital Partners participated in Near Space Labs $20M Series B funding round. Based in Brooklyn, New York, Near Space Labs deploys helium balloon–lifted "Swift" robots to capture ultra-high-resolution aerial imagery from the stratosphere. The company plans to use the funds to expand its fleet and increase coverage, aiming to provide 7cm-resolution images to 80% of the U.S. population twice annually. - learn more
    • Alexandria Venture Investments participated in a $15M Series A funding round for Hoofprint Biome, a Raleigh, North Carolina–based agtech startup. Hoofprint Biome develops enzyme-based feed additives aimed at reducing methane emissions from cattle while enhancing productivity. The company plans to use the funds to advance product development, conduct on-farm trials, and prepare for commercial launch. - learn more
    • Finality Capital Partners participated in a $25M seed funding round for Miden, a privacy-focused blockchain protocol spun out of Polygon. Miden leverages zero-knowledge technology to offer fast, confidential transaction processing tailored for large institutions handling sensitive payment flows. The funding will support the development of Miden's ecosystem and developer tools, with plans to launch its main network by the end of the year. - learn more
    • Overture VC participated in Glacier's $16M Series A funding round. Glacier, a San Francisco-based startup, develops AI-powered robotic systems designed to automate and enhance the efficiency of recycling processes at material recovery facilities (MRFs). The funds will be used to expand Glacier's operations, deploy its technology to more MRFs across the U.S., and further develop its AI and robotics capabilities to improve recycling rates and reduce environmental impact. - learn more
    • Powerhouse Capital and Rideback participated in a $10M funding round for Cheehoo, a Los Angeles-based startup developing AI-powered tools to streamline 3D animation workflows. Cheehoo's platform integrates with industry-standard software like Maya and Unreal Engine, offering features such as AI-assisted character animation, speech-to-motion capabilities, and real-time collaboration tools. The company plans to use the funds to enhance its technology and expand its reach to a broader range of creators, from major studios to independent animators. - learn more
    • Village Global participated in P-1 AI's recent $23M seed funding round. Based in Henderson, Nevada, P-1 AI is developing an artificial general intelligence (AGI) platform named Archie, designed to automate engineering tasks for physical systems. The company plans to use the funds to advance Archie's capabilities, starting with applications in data center cooling systems, and eventually expanding into sectors like industrial systems, automotive, and aerospace. - learn more
    • TenOneTen Ventures led a $3.3M seed funding round for Domos, a startup developing an AI-powered workforce to streamline property management operations. Based in New York City, Domos' platform automates routine communications and workflows, enabling property managers to focus on higher-value tasks. The funds will be used to expand the company's engineering team and further develop its AI capabilities to enhance efficiency and resident experience. - learn more
    • Leap Venture Studio participated in a $1M seed funding round for Buddy Bites, a Hong Kong-based dog food brand that donates to shelters with every order. The funds will support Buddy Bites' expansion in Hong Kong, Singapore, and the UK, with plans to enter Taiwan and launch new products later this year. Additionally, Buddy Bites joined Leap Venture Studio's 12-week accelerator program, gaining mentorship and access to a network of industry experts to further its mission of providing premium dog food while supporting animal shelters. - learn more

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    From Metro Rails to Blended Wings: LA’s Transportation Era

    🔦 Spotlight

    Hello Los Angeles,

    Move over Coachella, hello Stagecoach. With crowds headed east, LA might feel a little quieter this weekend, but beneath the surface, the city is busy making moves that could shape the future of travel.

    Image Source: Metro

    First up: a major milestone at LAX.

    This June, the new LAX/Metro Transit Center Station will officially open, finally linking Metro's C and K Lines to a new ground hub near the airport.

    It marks the first real rail connection to LAX in the airport’s history, a major step for a city that has long been synonymous with gridlock.

    While the fully Automated People Mover system connecting the station to the terminals is still under construction and expected to open in 2026, the launch of the transit center is a critical piece of LA’s broader infrastructure upgrade ahead of the 2028 Olympics.

    Even if most travelers will still rely on cars or rideshares for now, it is a sign that even the most car-centric corners of the city are starting to shift.

    Image Source: JetZero

    Meanwhile, in Long Beach, a local aerospace startup is aiming to transform air travel altogether and just got a major boost.

    JetZero, a stealthy aviation company based in Long Beach, announced a new investment from United Airlines to advance its radical new aircraft design: the blended wing body.

    Unlike traditional tube-and-wing planes, JetZero’s blended design integrates the wings and fuselage into a single structure, reducing aerodynamic drag and dramatically improving fuel efficiency.

    United's investment is more than just financial support. It is a strategic bet on JetZero’s vision for cutting long-haul flight emissions in half, a critical goal as the aviation industry faces mounting pressure to decarbonize.

    JetZero plans to have its first full-scale prototype flying by 2027, and if successful, it could set a new blueprint for the next generation of commercial aircraft.

    For Los Angeles, it is another reminder that some of the boldest ideas shaping the future of mobility are being built right here in our own backyard.

    Planes, trains, and a city learning to move a little differently. Just another week in LA.

    🤝 Venture Deals

    LA Companies

    • Durin, an El-Segundo startup aiming to automate drilling for critical minerals exploration, has secured $3.4M in a pre-seed funding round led by 8090 Industries. The company is developing a sensor-equipped drilling rig capable of drilling 300 meters deep, gathering data to build an automation model. The funding will support the development of this technology, with the goal of enabling unattended drill rigs within two to three years. - learn more
    • Altruist, a Los Angeles-based custodian and software platform for registered investment advisors (RIAs), raised $152M in a Series F round led by GIC, bringing its valuation to $1.9 billion. The platform streamlines account opening, trading, reporting, and billing for over 4,700 advisors. The new funding will be used to accelerate product development, expand the team, and scale enterprise capabilities. - learn more
    • Sesh, a superfan engagement platform that connects artists with fans through interactive experiences, exclusive content, and live events, has raised $7M in funding led by Miura Global. The funds will be used to expand platform capabilities, onboard more artists, and enhance technology for deeper insights and engagement opportunities. - learn more
    • Khloud, a new consumer brand founded by Khloé Kardashian, has raised $12M in an oversubscribed funding round with participation from Jessica Bixby, Serena Ventures, William Morris Endeavor (WME), and Shrug Capital. The Los Angeles-based company is debuting with a protein-rich popcorn made from whole-grain corn and its proprietary “Khloud Dust” seasoning, delivering 7 grams of protein per serving. The funds will be used to expand into additional snack categories and scale retail distribution, beginning with a Target launch on April 29. - learn more

    LA Venture Funds

    • Anthos Capital co-led a $20M funding round for Theo, a New York-based crypto trading infrastructure startup. Theo enables retail investors to access institutional-grade trading strategies—such as high-frequency arbitrage and cross-chain funding rate optimization—through strategy-specific vaults, eliminating the need for technical expertise. The platform operates on a custom validator network that facilitates real-time execution across centralized and decentralized exchanges, enforcing margin requirements and system-wide overcollateralization. The funds will be used to expand Theo's validator infrastructure, integrate with additional financial platforms, and grow its user base. - learn more
    • Pinegrove Capital Partners participated in a $70M Series B funding round for Nourish, a New York-based startup offering AI-powered, insurance-covered virtual nutrition counseling. Nourish connects patients with registered dietitians to manage chronic conditions like obesity and diabetes, boasting a network of over 3,000 dietitians across all 50 states. The funds will be used to expand its provider network, enhance AI tools, and deepen partnerships with healthcare organizations. - learn more
    • Mantis VC participated in Chainguard's $356M Series D funding round. Based in Kirkland, Washington, Chainguard secures software supply chains by offering tools like secure containers, virtual machines, and libraries for open-source development. The funding will be used to expand product offerings, grow the go-to-market team, and support its expanding customer base. - learn more
    • Clocktower Technology Ventures participated in a $30M Series C funding round for Steadily, a landlord insurance provider based in Austin, Texas, and Overland Park, Kansas. Steadily offers tailored insurance solutions for rental property owners, serving policyholders across all 50 U.S. states. The funds will be used to expand operations, enhance technology, and grow the team, aiming to streamline the insurance process for landlords. - learn more
    • Blue Bear Capital participated in Ocient's recent $42.1M Series B extension, bringing the Chicago-based data analytics company's total funding to $159.4M. Ocient specializes in high-performance, energy-efficient analytics solutions for large-scale, complex data and AI workloads, leveraging its proprietary Compute Adjacent Storage Architecture® and Megalane™ technology. The new capital will be used to advance the development and delivery of energy-efficient solutions for costly, complex, and operationally burdensome data and AI workloads. - learn more
    • Group11 participated in Healthee's $50M Series B funding round, supporting the New York-based company's mission to simplify health benefits through AI. Healthee offers an AI-powered platform that helps employees and employers navigate complex healthcare systems, enhancing user experience, reducing costs, and improving care outcomes. The funds will be used to expand Healthee's product suite, scale go-to-market operations, and accelerate the development of its AI-powered tools. - learn more
    • Sum Ventures participated in Irrigreen's $19M Series A funding round. Headquartered in Edina, Minnesota, with operations in San Francisco, Irrigreen develops robotic irrigation systems that utilize digital mapping and AI to optimize water usage for residential lawns. The funds will be used to advance product development, expand manufacturing in the U.S., and enhance the company's smart lawn care solutions. - learn more
    • Ventek Ventures participated in Recce's $4M funding round. Based in San Francisco, Recce offers data-native code review tools designed to enhance data validation in AI and software development workflows. The funds will be used to advance Recce's open-source toolkit and launch its collaborative SaaS platform, Recce Cloud, aiming to streamline data validation processes across the software lifecycle. - learn more
    • B Capital led an $87M Series C funding round for Omnidian, a Seattle-based provider of performance assurance services for residential and commercial solar and energy storage systems. Omnidian offers comprehensive protection and performance plans, ensuring optimal operation and maintenance of clean energy assets. The funds will be used to scale core operations, expand into high-potential markets like Australia and Europe, and explore new product lines such as electric vehicle (EV) charging infrastructure and commercial energy storage solutions. - learn more
    • Overture VC participated in PHNX Materials' $2.5M seed funding round. Based in the U.S., PHNX Materials has developed a process to purify coal fly ash by removing impurities like sulfur and carbon, making it suitable for use in concrete production. This approach not only repurposes industrial waste but also reduces the carbon footprint of concrete by replacing a portion of cement. The funds will be used to scale PHNX's purification technology and expand its operations to meet the growing demand for sustainable construction materials. - learn more

    LA Exits

    • Maza, a fintech startup catering to Spanish-speaking consumers in the U.S., has been acquired by Flex for $40M. Originally focused on helping immigrants open bank accounts and obtain ITINs, Maza shifted its services toward small business owners, such as landscapers and construction subcontractors. This pivot aligned with Flex's mission to provide comprehensive financial tools for business owners. Post-acquisition, Maza will rebrand as Flex Consumer, with its founders assuming executive roles within the combined company. The merger aims to accelerate their shared roadmap in delivering integrated financial solutions. - learn more
    • Moondust Management, a talent agency known for representing creators in travel, lifestyle, wellness, and purpose-driven content, has been acquired by Fixated, a digital entertainment platform. This acquisition aims to enhance Fixated's capabilities in content creation and brand partnerships by integrating Moondust's expertise and creator network. - learn more
    • ClaimShark, a provider of payment integrity solutions, has been acquired by Lyric, a leader in healthcare payment accuracy and integrity solutions. ClaimShark's innovative tools, including the Virtuoso command center and Replay audit platform, will be integrated into Lyric's AI-driven Lyric42 platform. This acquisition aims to enhance payment accuracy, transparency, and efficiency across the healthcare ecosystem by streamlining and simplifying healthcare transactions to eliminate waste. - learn more

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    This Week in LA: Robotaxis, Reels & a $100K Challenge

    🔦 Spotlight

    Happy Friday, LA,

    It’s Coachella Weekend 2, which means fewer cars on the road, easier restaurant reservations, and just enough quiet to hear the next wave of innovation humming through the city. This week, we’re watching more driverless cars roll in, Instagram remix your Reels feed, and a $100K climate challenge call for startups. Let’s get into it.

    🚕 Zoox Is Bringing Its Robotaxis to LA

    Image Source: Zoox

    Amazon-owned Zoox just announced that its futuristic, steering wheel–less robotaxis are heading to Los Angeles. The company has begun mapping the city as it gears up to launch a fully autonomous ride-hailing service. These aren’t retrofitted Teslas; they’re bidirectional vehicles built specifically for autonomy, with no front, no back, and no driver seat.

    It’s Zoox’s first major push beyond Northern California and Las Vegas, and it's a signal that LA is being positioned as a proving ground for next-gen transportation. As the city preps for the 2028 Olympics, Zoox is hoping to help LA reimagine what mobility looks like without a human behind the wheel.

    👀 More on that here:Zoox’s LA Expansion

    💬 Instagram’s New “Blend” Feature

    Image Source: Instagram

    Instagram just announced “Blend,” a new feature that creates a private Reels feed curated for you and a friend based on your shared interests. It’s like a personalized explore page, but just for two. Think Spotify Blend, but with more memes and fewer breakup ballads.

    It’s currently in testing, but if rolled out broadly, Blend could change how creators build community and how content spreads in smaller, more intimate algorithmic circles.

    🔥 LACI Launches the LA Resilient Rebuilding Cup

    100 days after the Palisades and Eaton fires swept through parts of LA, the Los Angeles Cleantech Incubator (LACI) is launching a new initiative: the LA Resilient Rebuilding Cup. It’s a pitch competition aimed at finding startup solutions to help LA rebuild stronger and greener.

    Up to $100,000 in prizes and piloting funds are up for grabs. Finalists will pitch live on July 10 in Downtown LA, and selected winners will get the opportunity to bring their technologies to fire-affected communities. Focus areas include fire detection, renewable energy, air quality, mental health tools, resilient construction, and more.

    Startups have until May 30 to apply.
    📍 Apply here


    🤝 Venture Deals

    LA Companies

    • Parallel Systems, a Los Angeles-based company developing autonomous battery-electric railcars, has raised $38M in a Series B funding round led by Anthos Capital, with participation from Riot Ventures and others. The funding will support the commercialization of its technology, including the launch of its first commercial pilot in Georgia. This pilot, approved by the Federal Railroad Administration, will test self-propelled intermodal flatcars over a 160-mile stretch, aiming to offer a more efficient and sustainable alternative to short-haul trucking. Parallel Systems plans to use the funds to scale production of its Generation 3 vehicles and expand operations in the U.S. and Australia. - learn more

    LA Venture Funds

    • Bonfire Ventures led a $7.5M seed funding round for 1Fort, a New York-based startup that automates commercial insurance workflows for brokers using AI. Village Global and others participated in the round. 1Fort's platform streamlines the insurance process by automating tasks such as application completion, quote retrieval, and policy binding, helping brokers secure better coverage for clients more efficiently. The funds will be used to enhance the platform's AI capabilities, expand the team, and grow partnerships with carriers and brokers across the U.S. - learn more
    • Strong Ventures led an ₩800 million pre-Series A funding round for LunchLab, a Seoul-based B2B startup offering corporate lunch subscription services. LunchLab provides daily lunchbox deliveries and post-meal dish collection for companies, streamlining office meal logistics. The funds will be used to expand production capacity, enhance delivery operations across Seoul, and improve their proprietary ordering app. - learn more
    • CIV participated in Crux's recent $50M Series B funding round, supporting the company's mission to streamline financing for clean energy and manufacturing projects. Crux, based in New York, operates a capital markets platform that facilitates transactions such as transferable tax credits and debt financing, aiming to enhance liquidity and efficiency in the clean economy sector. The newly acquired funds will be utilized to expand Crux's network of market participants, enhance its software infrastructure, and scale its operations to meet the growing demand for clean energy financing solutions. - learn more
    • Finality Capital Partners participated in the $11M seed funding round for Optimum, a startup incubated at MIT and based in Cambridge, Massachusetts. Optimum is developing a decentralized memory layer for Web3, utilizing Random Linear Network Coding (RLNC) to enhance data storage and propagation across blockchain networks. The funds will be used to advance Optimum's technology and expand its team to address scalability challenges in decentralized systems. - learn more
    • TIME BioVentures participated in Phantom Neuro's recent $19M Series A funding round. Based in Austin, Texas, Phantom Neuro is developing a minimally invasive neural interface called Phantom X, designed to enable intuitive control of prosthetic limbs and robotic exoskeletons. The new funding will support the company's first human trials, preclinical testing, regulatory submissions, and expanded research and development for broader applications of its technology beyond prosthetic limbs. - learn more
    • Veridical Ventures participated in a $2M seed funding round for SlashExperts, a San Francisco-based B2B platform that connects prospective buyers with existing customers to facilitate authentic peer conversations. This approach aims to build trust and expedite sales processes. The funds will be used to enhance the platform's features, ensuring seamless and effective connections between buyers and users. - learn more
    • F4 Fund participated in Boby.ai's $1.25M seed funding round, supporting the Istanbul-based startup's mission to develop AI-powered mobile applications. Boby.ai, founded by Gökçe Nur Oğuz, Onur Olgun, and Berat Oğuz, focuses on creating user-friendly AI tools for end-users, such as their flagship app Mozart.ai, which enables users to generate personalized music using AI. The funding will be used to expand the team and develop new AI-based mobile products. - learn more
    • Riot Ventures and Impatient Ventures participated in Blue Water Autonomy's recent $14M seed funding round. Based in Boston, Massachusetts, Blue Water Autonomy is developing fully autonomous, unmanned ships designed to operate on the open ocean for extended periods. The company plans to use the funds to expand its engineering team, accelerate ship testing, and integrate various payloads onto its platform. - learn more
    • Aliavia Ventures led a $1M pre-seed funding round for InsightWise, an AI-powered platform based in Sydney, Australia, designed to streamline the consulting process by automating tasks such as proposal development and strategy creation. The funding will be used to enhance the platform's capabilities and support expansion into the U.S. market. - learn more

    LA Exits

    • Pex, a leading provider of digital rights technology, has been acquired by Vobile, a global leader in digital content protection and transaction services. This acquisition enhances Vobile's services for the music industry and strengthens its position as a global solution provider for digital audio content. - learn more

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