LA Tech Updates: Microsoft Reportedly Looking to Buy TikTok; HBCUvc and PledgeLA's New Partnership

Rachel Uranga

Rachel Uranga is dot.LA's Managing Editor, News. She is a former Mexico-based market correspondent at Reuters and has worked for several Southern California news outlets, including the Los Angeles Business Journal and the Los Angeles Daily News. She has covered everything from IPOs to immigration. Uranga is a graduate of the Columbia School of Journalism and California State University Northridge. A Los Angeles native, she lives with her husband, son and their felines.

LA Tech Updates: Microsoft Reportedly Looking to Buy TikTok; HBCUvc and PledgeLA's New Partnership

Here are the latest updates on news affecting Los Angeles' startup and tech communities. Sign up for our newsletter and follow dot.LA on Twitter for more.

Today:

  • Trump could order ByteDance to divest of TikTok today, Bloomberg reports
  • HBCUvc and PledgeLA offer $5,000 grants to founders from HBCUs

        HBCUvc and PledgeLA offer $5,000 grants to founders from HBCUs 

        HBCUvu, a non-profit increasing racial diversity in venture capital, has partnered with PledgeLA to provide $5,000 grants to startup founders from historically Black colleges and universities. The program, dubbed the The Summer Lab Fund, is now accepting applications through August 6.

        Supported by Crosscut Ventures, the fund will award equity-free grants to technology and tech-enabled startups founded by HBCU students and alumni. Selected startups will also receive mentorship and support from participating sponsors as well as access to HBCUvc and PlegeLA networks.

        The funding opportunity, launched last week, is managed and operated by the current cohort of PledgeLA VC interns who were matched at firms across Los Angeles in a 10-week program.

        PledgeLA is a cohort of tech companies and VC firms created by the Annenberg Foundation and the mayor of Los Angeles. Last week, the organization released results from its annual survey on diversity in tech companies across the city.

        Current intern Evan Hamilton told dot.LA the plan is to establish the Lab Fund as an annual project. Although it only has three spots now, he said, if demand is high enough they will look to raise more funds.

        "What I really hope for, as a result of this, is to encourage that pipeline of investors to go to HBCUs to find interesting entrepreneurial talents because as we've seen many times, most folks are in hoodies coming from Stanford," Hamilton said.

        "Five thousand dollars is a nominal amount of money, but what it does is give someone that ability to say, 'I am an entrepreneur, I have been funded,'" Hamilton said. "It really doesn't take a lot to validate a lot of the thoughts, feelings and opinions that people have. If we're doing this correctly, we're going to help these companies grow, even the ones that aren't able to receive funding."

        He said it hopes to dispel preconceived notions and encourage investors to look toward HBCUs for talent.

        After applications close on August 6, interns will form an investment committee to present and review the interested companies, which come from industries including entertainment tech, retail, education services and sports. Winners of the fund will be announced August 14.

        PledgeLA intern Liza Katsman hopes the thinking behind this initiative will one day extend beyond the HBCU ecosystem. She pointed out that entrepreneurs of different backgrounds - that had largely been excluded from tech companies - bring new perspectives and ideas that can turn into successful products or services.

        "Diversity and inclusion is not just the right thing to do," Katsman said. "It's the smart thing to do."

        dot.LA is a member of PledgeLA.

        Trump and Microsoft Are Looking at TikTok 

        Amazon Tells Employees to Delete TikTok, Then Claims Directive Was Sent in Error

        Microsoft is in talks to buy TikTok as President Donald Trump plans to ban it, various media reported Friday.

        TikTok has come under increasing pressure from the administration that Chinese Internet company ByteDance is sharing data with Beijing and has threatened to ban it.

        Bloombergreported the Trump administration had planned to order ByteDance to divest of the Culver City-based company as early as Friday.

        Microsoft could alter the question of ownership. It's unclear how advanced the talks are.

        The White House could immediately be reached for comment.

        But in an emailed statement a spokeswoman for TikTok said, "While we do not comment on rumors or speculation, we are confident in the long-term success of TikTok."

        Trump's move would not come as a surprise. He told reporters on Friday: "We're looking at TikTok, we may be banning TikTok. We may be doing some other things. There's a couple of options."

        Earlier this month, Trump suggested he would ban the app as punishment over China's handling of the coronavirus. Those comments came after Secretary of State Mike Pompeo told Fox News that the United States is considering whether to restrict TikTok and other social media apps amid concerns that information was being shared with China's communist government.

        "We are taking this very seriously and we are certainly looking at it," Pompeo said.

        In March, another Chinese company, Beijing Kunlun Tech sold the West Hollywood-based gay dating app Grindr for more than $600 million after the Committee on Foreign Investment in the United States forced it to divest.

        Two months later, Beijing-based parent company ByteDance appointed Kevin Mayer, once widely considered Bob Iger's heir apparent at The Walt Disney company, to head TikTok in a move that would help distance itself from its Beijing parent company.

        TikTok, has around 30 million active users and has increasingly become a favorite of advertisers to sell their products among the youth-oriented social media app.


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        🏰 Disney's Epic Investment Stands Out Amidst Gaming Industry Layoffs

        Christian Hetrick

        Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

        🔦 Spotlight

        In the midst of widespread gaming industry layoffs, a glimmer of positive news emerges as Disney announces a significant move: a $1.5 billion investment in Epic Games. 🏰💰🐭

        Image Source: Disney

        Disney's $1.5 billion investment in Epic Games, disclosed late Wednesday, signals a strategic alignment aimed at expanding the success of "Fortnite." The deal enhances Epic's growth prospects after financial setbacks, including layoffs, and strengthens the partnership between the two companies. With Disney gaining a larger equity stake in Epic, the collaboration will broaden the integration of beloved Disney franchises like Marvel, Star Wars, Pixar, and Avatar into the game, potentially boosting its appeal and longevity. This significant investment underscores Disney's commitment to interactive entertainment and signifies a shift towards games as a primary revenue stream, aligning with the growing trend of digital engagement among younger demographics. Moreover, the potential for crossover sales of physical Disney products within "Fortnite" and the exploration of new content distribution channels are just some of the opportunities arising from this partnership.

        For LA tech, the Disney-Epic Games partnership represents a validation of the region's burgeoning tech and gaming ecosystem. The substantial investment in Epic, who maintains a large Los Angeles office with 1,000+ employees (according to LinkedIn), reflects confidence in the LA’s talent pool and innovation potential. Additionally, this partnership between two industry giants fosters an environment for further collaboration, investment, and growth within LA's tech sector. As Disney and Epic Games deepen their ties and explore new avenues for content integration and distribution, it not only elevates the prominence of LA as a tech hub but also stimulates economic growth and job creation in the region. This partnership highlights LA's unique position as a hub where technology and entertainment converge. With its ability to integrate diverse industries, LA is driving innovation and expansion in digital entertainment. 🚀💸🎮

        🤝 Venture Deals

        LA Companies

        • ProducePay, a financing and marketplace platform for the fresh produce market, raised a $38M Series D led by Syngenta Group Ventures joined by Commonfund, Highgate Private Equity, G2 Venture Partners, Anterra Capital, Astanor Ventures, Endeavor8, Avenue Venture Opportunities, Avenue Sustainable Solutions, and Red Bear Angels. - learn more
        • Blush, an invite-only dating app that drives users to local businesses on dates, raised a $7M Seed Round from individuals like Naval Ravikant. - learn more
        • Mogul, a startup founded last year that provides an overview of an artist's royalty earnings and identifies areas where money is owed but has not yet been collected, raised a $1.9 million seed round from Wonder Ventures, United Talent Agency, AmplifyLA, and Creator Partners. - learn more
        • Avnos, a hybrid direct air capture startup, raised a $36M Series A led by NextEra Energy and joined by Safran Corporate Ventures, Shell Ventures, Envisioning Partners, and Rusheen Capital Management. - learn more
        • AI.fashion, startup whose mission is to help retailers enhance the online shopping experience by providing consumers with virtual try-ons and personalized fashion recommendations, raised a $3.6M Seed Round led by Neo. - learn more
        • Suma Wealth, startup that aims to demystify financial topics and provide culturally relevant content, virtual experiences, and resources to help Latino users navigate financial challenges and opportunities, raised a $2.2M Seed Round . Radicle Impact led, and was joined by Vamos Ventures, OVO fund and the American Heart Association Impact Fund. - learn more
        • 222, a startup that helps users discover their city and meet new people through unique social experiences, raised a $2.5M Seed Round. Investors included 1517 Fund, General Catalyst, Best Nights VC, Scrum Ventures, and Upfront Ventures. - learn more
        • LimaCharlie, a security operations cloud platform, raised a $10.2M Series A led by Sands Capital. - learn more
        • Polycam, an app that uses a smartphone’s sensors to capture 3D scans of objects, raised an $18M Series A co-led by Left Lane Capital and Adjacent, and joined by Adobe Ventures and individuals like Chad Hurley and Shaun Maguire. -learn more.

        LA Venture Funds

        Actively Raising

        • ReelCall, Inc., an entertainment technology company focused on powerful apps and platforms that help build and maintain the professional network of connections vital to career growth, is raising a $850K Pre-Seed Round. - learn more
        • CZero, a startup building software to decarbonize logistics for logistics businesses and goods business through a vetted marketplace and optimization software. - learn more
        • Couri, a technology startup addressing last-mile delivery issues, is raising a $450K Pre-Seed Round at a $2.2M post money valuation. - learn more
        • Sweetie, a marketplace to help people plan date nights, is raising a $1.5M Pre Seed Round. - learn more
        • StartupStarter, an investment platform that provides real-time data and analytics on startups, is raising an $850K Angel Round. - learn more

        If you’re a founder raising money in Los Angeles, give us a shout, and we’d love to include you in the newsletter!

        Venture Waves, Climate Tech Wins, and Silicon Beach's Ongoing Evolution

        Christian Hetrick

        Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

        Anduril Seeks $1.5B in VC Funds

        Defense company Anduril Industries Inc., based in Costa Mesa and founded by Palmer Luckey, is seeking to raise $1.5 billion in fresh funds to boost its valuation to $12.5 billion or more, according to sources quoted by The Information. This fundraising effort, if successful, would mark one of the largest venture capital rounds of the year.

        Image Source: Anduril

        Anduril recently secured a contract to develop and test small unmanned fighter jet prototypes under the Air Force’s Collaborative Combat Aircraft (CCA) program, beating out major defense companies like Boeing, Lockheed Martin, and Northrop Grumman. Alongside General Atomics, Anduril will design, manufacture, and test these aircraft, with a final multibillion-dollar production decision expected in fiscal year 2026. This program aims to deliver at least 1,000 combat aircraft to fly in concert with manned platforms and is part of the Air Force’s Next Generation Air Dominance initiative. Central to Anduril’s success in this contract is the Fury autonomous air vehicle, acquired through the purchase of Blue Force Technologies. This victory underscores Anduril's rapid advancement in the defense sector, aligning with Luckey's vision of building faster and more cost-effective defense assets. - learn more

        Los Angeles Ranks Number 1 in Emerging Climate Tech Hub

        The 2024 Emerging Climate Tech Hubs Report by Revolution highlights Los Angeles as a burgeoning center for climate tech innovation. LA's growth in this sector is driven by its diverse talent pool, strong research institutions, and a culture of environmental consciousness. The city's unique mix of legacy industries, such as entertainment and aerospace, alongside emerging tech companies, positions it as a pivotal player in the climate tech landscape. This shift reflects a broader trend of decentralized climate tech funding across the U.S., reducing the historical dominance of California's traditional hubs. - learn more

        Silicon Beach: Looking Back, Moving Forward

        Assessing the overall health of the startup market is challenging, especially as venture capital funding has decreased by an average of 61% from 2021 to 2023 across the top VC markets in the US. Markets with robust ecosystems in AI, SaaS, Biotech, Healthtech, and Fintech appear to be weathering the downturn better than those focused on Consumer and Gaming industries, areas where Los Angeles traditionally excels.

        Percent Change In VC Funding By Region

        CB Insights

        LA Times paints a rather bleak outlook on the Los Angeles tech scene noting venture capital funding in Greater Los Angeles plummeted 73% from 2021 to 2022. Silicon Beach, once a vibrant tech corridor, currently faces high vacancy rates and lacks late-stage financiers, especially in the AI sector. However, there are positive signs, including growth in aerospace startups and increased venture capital investment in early 2024, suggesting a potential rebound for LA's tech ecosystem.

        While LA may not be exceeding expectations during this period, its tech ecosystem warrants a nuanced evaluation, given the broader market dynamics and its strong performance in specific sectors. Reach out to us with your thoughts.

        🚀 SpaceX gears up for another stellar year, active raises, and more

        Christian Hetrick

        Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

        Happy Friday Los Angeles! You made it through the first week of 2024!

        🔦 Spotlight

        Elon Musk may be a divisive (albeit entertaining) figure, but the continued success of SpaceX is pivotal for the aerospace industry in Los Angeles and more broadly around the world.

        Image Source: SpaceX webcast

        What happened with SpaceX in 2023?

        • Elon Musk challenged Facebook founder, Mark Zuckerberg to a cage fight.
        • SpaceX launched 96 successful missions with its Falcon series of rockets, a 57% increase over its previous annual record.
        • SpaceX conducted two test flights of the largest and most powerful rocket ever built, Starship.
        • Roughly two-thirds of SpaceX's launches in 2023 were devoted to building out Starlink, the company's satellite-internet megaconstellation.
        • Isaacson’s Elon Musk biography was published in September including everything from Musk’s tumultuous relationship with his father to his work ethic and “demon mode”.

        Moving forward what can we expect from SpaceX and its controversial founder? Continued innovation pushing the aerospace industry to new limits? Yes. More drama? Without a doubt.

        Here is some of what is to come in 2024:

        🤝 Venture Deals

        Just Announced

        Check back next week!

        LA Exits

        • CG Oncology, an Irvine, CA-based developer of immunotherapies for bladder cancer, filed for a $100M IPO. It plans to list on the Nasdaq (CGON) with Morgan Stanley as left lead underwriter, and has raised around $317m in VC funding. - learn more
        • McNally Capital agreed to sell Advanced Micro Instruments, a Costa Mesa, CA-based maker of gas analyzers and sensing technologies, to Enpro (NYSE: NPO). - learn more

        Actively Raising

        • ReelCall, Inc., an entertainment technology company focused on powerful apps and platforms that help build and maintain the professional network of connections vital to career growth, is raising a $850K Pre-Seed Round. - learn more
        • CZero, a hard-tech startup that is developing a technology for decarbonizing natural gas, is raising a $1.5M Seed Round. - learn more
        • Couri, a technology startup addressing last-mile delivery issues, is raising a $450K Pre-Seed Round at a $2.2M post money valuation. - learn more
        • Sweetie, a marketplace to help people plan date nights, is raising a $250K Angel Round. - learn more
        • StartupStarter, an investment platform that provides real-time data and analytics on startups, is raising an $850K Angel Round. - learn more

        If you’re a founder raising money in Los Angeles, give us a shout, and we’d love to include you in the newsletter!

        📅 LA Tech Calendar

        Sunday, January 7th

        Wednesday, January 10th

        • Startup Cafe: Networking with a Kick - Entrepreneurs, Startups, and Tech Enthusiasts join together to meet and connect with like-minded people, industry professionals and investors, while enjoying a nice cup of coffee in Venice at The KINN. This week’s interactive discussion about AI’s evolution in entertainment will feature Dr. Sam Khoze and Rachel Joy Victor.
        • Venice Tech Happy Hour- Join Startup Coil and FoundrHaus Wednesday evening and enjoy the sunset from the rooftop, grab a bite overlooking Abbot Kinney, and mingle with other tech enthusiasts and entrepreneurs by the bar on the patio.

        Have an awesome event coming up? Reach out to be featured on next week’s Newsletter!

        📙 What We’re Reading

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