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, variousmedia 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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        Cadence

        Derek Jeter’s Arena Club Knocked a $10M Funding Round Right Out of the Park

        Kristin Snyder

        Kristin Snyder is dot.LA's 2022/23 Editorial Fellow. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.

        sports trading cards
        Arena Club /Andria Moore

        Sports trading card platform Arena Club has raised $10 million in Series A funding.

        Co-founded by CEO Brian Lee and Hall of Fame Yankees player Derek Jeter, Arena Club launched its digital showroom in September. Through the platform, sports fans can buy, sell, trade and display their card collections. Using computer vision and machine learning, Arena Club allows fans to grade and authenticate their cards, which can be stored in the company’s vault or delivered in protective “slabs.” Arena Club intends to use the new cash to expand these functions and scale its operations.

        The new funding brings Arena Club’s total amount raised to $20 million. M13, defy.vc, Lightspeed Ventures, Elysian Park Ventures and BAM Ventures contributed to the round.

        “Our team is thankful for the group of investors—led by M13, who see the bright future of the trading card hobby and our platform,” Lee said in a statement. “I have long admired M13 and the value they bring to early-stage startups.”

        M13’s co-founder Courtney Reum, who formed the early-stage consumer technology venture firm in 2016 alongside his brother Carter Reum, will join Arena Club’s board. Reum has been eyeing the trading card space since 2020 when he began investing in what was once just a childhood hobby.

        The sports trading card market surged in 2020 as fans turned to the hobby after the pandemic brought live events to a standstill. Since then, prices have come down, though demand remains high. And investors are still betting on trading card companies, with companies like Collectors bringing in $100 million earlier this year. Fanatics, which sells athletic collectibles and trading cards, reached a $31 billion valuation after raising $700 million earlier this week. On the blockchain, Tom Brady’s NFT company Autograph lets athletes sell digital collectibles directly to fans.

        As for Arena Club, the company is looking to cement itself as a digital card show.

        “Providing users with a digital card show allows us to use our first-class technology to give collectors from all over the world the luxury of being able to get the full trading card show experience at their fingertips,” Jeter said in a statement.

        Hosts Who Rent From “Airbnb-Friendly” LA Apartments May Not Make a Profit

        Amrita Khalid
        Amrita Khalid is a tech journalist based in Los Angeles, and has written for Quartz, The Daily Dot, Engadget, Inc. Magazine and number of other publications. She got her start in Washington, D.C., covering Congress for CQ-Roll Call. You can send tips or pitches to amrita@dot.la or reach out to her on Twitter at @askhalid.
        LA house

        L.A.’s lax enforcement of Airbnbs has led to an surge of illegal short-term rentals — even four years after the city passed a regulation to crack down on such practices. But what if hosts lived in a building that welcomed Airbnb guests and short-term rentals?

        That’s the idea behind Airbnb’s new push to expand short-term rental offerings. The company is partnering with a number of corporate landlords that agreed to offer “Airbnb-friendly” apartment buildings, reported The Wall Street Journal last week. According to the report, the new service will feature more than 175 buildings managed by Equity Residential, Greystar Real Estate Partners LLC and 10 other companies that have agreed to clear more than 175 properties nationwide for short-term rentals.

        But prospective hosts in Los Angeles who decide to rent apartments from Airbnb’s list of more than a dozen “friendly” buildings in the city likely won’t earn enough to break even due to a combination of high rents, taxes and city restrictions on short-term rentals. Rents on one-bedroom apartments in most of the partnered buildings listed soared well over $3,000 a month. Only a few studios were available under the $2,000 price range. If a host were to rent a one bedroom apartment with a monthly rent of $2,635 (which amounts to $31,656 annually), they would have to charge well over the $194 average price per night for Los Angeles (which amounts to $23,280 per year) according to analytics platform AllTheRooms.

        Either way, residents who rent one of these Airbnb friendly apartments still have to apply for a permit through the City of Los Angeles in order to host on Airbnb.

        “[..Airbnb-friendly buildings] seems like a good initiative. However, from a quick look, it seems that given the rent, Airbnb revenue wouldn’t be enough to cover all expenses if the host follows the city’s policy,” says Davide Proserpio, assistant professor of marketing at the USC Marshall School of Business.

        In addition, since L.A.’s 120-day cap on short-term rentals still applies to the buildings on Airbnb’s listing platform, that greatly limits the number of longer-term guests a resident can host. Not to mention, some of the buildings that Airbnb lists have even shorter limits – The Milano Lofts in DTLA for example only allows residents to host 90 nights a year.

        Airbnb’s calculations of host earnings may be greatly misleading as well, given that the estimate doesn’t include host expenses, taxes, cleaning fees or individual building restrictions. For example, Airbnb estimates that a resident of a $3,699 one bedroom apartment at the Vinz in Hollywood that hosts 7 nights a month can expect $1,108 a month in revenue if they host year-round. But the Vinz only allows hosts to rent 90 days a year, which greatly limits the potential for subletters and a consistent income stream.

        Keep in mind too that since the apartment will have to serve as the host’s “primary residence”, hosts will have to live there six months out of the year. All of which is to say, it’s unclear how renting an apartment in an “Airbnb-friendly” building makes hosting easier — especially in a city where illegal short-term rentals already seem to be the norm.

        https://twitter.com/askhalid

        The Streamy Awards Prove that Online Creators and Traditional Media Are Still Disconnected

        Kristin Snyder

        Kristin Snyder is dot.LA's 2022/23 Editorial Fellow. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.

        tiktok influencers around a trophy ​
        Andria Moore /Charli D'Amelio/Addison Rae/JiDion

        Every year, the Streamy Awards, which is considered the top award show within the creator economy, reveals which creators are capturing the largest audiences. This past Sunday, the event, held at The Beverly Hilton, highlighted some of the biggest names in the influencer game, chief among them Mr. Beast and Charli D’Amelio. It had all the trappings of a traditional award show—extravagant gowns, quippy acceptance speeches and musical interludes. But, as TikTok creator Adam Rose told The Washington Post, the Streamys still lacks the legitimacy of traditional award shows.

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