Evan Xie
LA’s Hottest Startups for 2023
Los Angeles, like the rest of the startup world, saw a dip in global venture funding. As of November 2022, funding reached $22 billion, which is 69% lower than the previous year.
Despite the massive downturn in funding due to the decline in technology stocks at the end of 2021 combined with concerns about rising inflation, it did not stop the startups on this list from raising funding. We asked more than 30 leading L.A.-based investors for their take on the hottest firms in the region. (We also asked VCs not to pick any of their own portfolio companies, and vetted the list to ensure they stuck to that rule.)
They selected a few live-shopping platforms, space startups and payment software companies and we've organized the list based on the amount of capital raised as of January, according to data from PitchBook.
Here are the eight L.A. startups VCs have their eyes on as they look ahead to 2023.
Anduril ($2.32B raised)
Anduril Industries Is Getting Hundreds of Millions to Build Border Surveillance Tech
Image by Ian Hurley
Given how much the company has raised to date, it was no surprise that Costa Mesa-based defense technology startup and U.S. military contractor Anduril was the name that most often came up among L.A. venture investors.
Oculus co-founder Palmer Luckey, Founders Fund partner Trae Stephens, ex-Palantir executives Matt Grimm and Brian Schimpf founded Anduril in 2017. The startup is most known for its core software product, an operating system called Lattice, which is used to detect potential security threats.
To date, the startup has received investments from Andreessen Horowitz, Founders Fund, General Catalyst, D1 Capital Partners and venture capitalist Elad Gil.
ServiceTitan ($1.1B raised)
Earlier this year, the Glendale-based firm filed for an initial public offering. Since its founding in 2012, the company’s co-founders, Ara Mahdessian and Vahe Kuzoyan built its software for a wide range of service industries, from plumbing and landscaping to pest control and HVAC.
The company’s growth is largely driven by its ability to acquire other businesses, including landscaping software provider Aspire and pest control-focused platforms ServicePro and, earlier this month, FieldRoutes.
Whatnot ($484.41M raised)
The Marina del Rey-based livestream shopping platform makes the ‘Hottest Startups’ list for a second year in a row. The online marketplace was founded by former GOAT product manager Logan Head and ex-Googler Grant LaFontaine and made its name by providing a live auction platform for buying and selling collectables like rare Pokémon cards, and has since expanded into sports memorabilia, sneakers and apparel.
It’s no secret that its success is in part, due to the partnerships Whatnot inked this year, like UFC fighter Jorge Masdival to sell sports collectibles on the platform. Along with science fiction/fantasy comics publisher Heavy Metal to bring out original content for the Whatnot community.
Boulevard ($110.35M raised)
Los Angeles-based salon booking app Boulevard attracted backers including Santa Monica-based early-stage VC firm Bonfire Ventures, which focuses on B2B software startups. The startup builds booking and payment software for salons and spas and now it now serves 25,000 professionals across 2,000 salons. Boulevard has also worked with prominent brands such as Toni & Guy and HeyDay.
Varda Space ($53M raised)
Space manufacturing startup Varda focuses on designing, developing, and manufacturing products that benefit from low gravity. The products that the El segundo-based company manufactures in space are intended to be brought back down with the hope that it will improve life on earth. The forward-thinking company was founded by Founders Fund partner Delian Asparouhov and former SpaceX officer Will Bruey.
Papaya (65.2 million)
Sherman Oaks-based Papaya was founded by Patrick Kann and Jason Metzler. The company was built to make it easier for consumers to pay “any” bills — whether it's a hospital bill or a parking ticket — all on the mobile app. To pay, users take a picture of their bill and type in the amount they want to send as long as the end user has a mailing address or an online payment portal. Papaya utilizes optical character recognition, a software that enables the app to look at every bill — no matter what the format is — and recognize each piece of information.
Impulse Space ($30 million raised)
Based in El Segundo, Impulse Space creates orbital maneuvering vehicles capable of delivering multiple payloads to unique orbits from a single launch. Founded in 2021 by former SpaceX exec Tom Mueller built his company as a last-mile delivery partner for future inter-space missions, like servicing space stations. In July, the space startup inked a deal with Long Beach-based reusable rocket maker Relativity Space to accelerate the entry of its rover into Mars.
Popshop Live (24.5 million raised)
Whatnot competitor Popshop Live is betting that live-shopping is the future of ecommerce. The West Hollywood-based company primarily focuses on selling collectables such as trading cards and anime merchandise.
In the summer of 2021, the company bolstered its team by hiring former Instagram and Instacart executive Bangaly Kaba to lead platform growth and former head of Uber Eats Jason Droege to lead expansion.
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Now comes the harder part: producing them at scale.
The Torrance-based defense startup raised a $1B Series C at a $13B valuation. The financing includes $800M in equity and a $250M revolving credit facility, making it one of the largest recent raises for an LA defense technology company.
JPMorganChase’s Strategic Investment Group, Andreessen Horowitz and Carlyle co-led the round. Lightspeed Venture Partners, Lavrock Ventures, Altimeter, General Catalyst, T. Rowe Price and LA-based Interlagos Capital also participated.
Castelion will use the capital to ramp production of Blackbeard, its low-cost hypersonic strike missile, while developing a longer-range precision weapon and new defensive systems. Hundreds of millions of dollars will go toward expanding manufacturing at Project Ranger, the company’s 1,000-acre production campus in New Mexico.
Image Source: Castelion
Blackbeard was designed in California, will be built in New Mexico and is expected to enter service in 2027. Castelion says it has already secured more than $500M in U.S. military contracts over the past 18 months and moved the missile from a clean-sheet concept to an official program in fewer than four years.
That timeline is central to Castelion’s pitch. Traditional defense programs are often associated with long development cycles, limited production runs and eye-watering costs. Castelion is applying the rapid testing and vertically integrated manufacturing approach popularized by commercial space companies to weapons production.
But a $13B valuation changes the standard. Castelion is no longer being judged as a promising startup with an impressive prototype. It is being funded like a company expected to become a major part of the American defense industrial base.
The question is no longer whether a startup can build a hypersonic missile. It is whether one can manufacture thousands of them without losing the speed, discipline and cost advantages that made it disruptive in the first place.
For LA’s defense ecosystem, that shift matters. The region has become home to a growing number of companies promising to modernize how America builds critical hardware. Castelion now has the capital, contracts and facilities to show what happens when that promise reaches the factory floor.
The next test will not be in a pitch deck. It will be in production.
More from this week’s LA startup and venture scene below.
🤝 Venture Deals
LA Companies
- Long Beach based Ampaire raised a $19M Series B led by DiamondStream Partners, with strategic participation from Alaska Star Ventures and IAGi Ventures, bringing its total funding to $68M. The hybrid-electric aviation company will use the capital to expand flight operations, produce additional Eco Caravan aircraft, advance regulatory certification and scale its manufacturing capabilities. - learn more
LA Venture Funds
- SUM Ventures participated in AssistMe’s €6.5M funding round, which was led by CRB Health Tech and Vorwerk Ventures and included several returning investors. The German care technology company will use the capital to expand across Europe, prepare for a U.S. launch and further develop alea, its digital platform for supporting caregivers and improving nursing-home operations. - learn more
- CIV led Hypercubic’s $5.3M seed round, with participation from Y Combinator, Afore Capital, Pioneer Fund, Multimodal Ventures and several angel investors. The San Francisco startup will use the capital to develop AI agents that can analyze, document and rewrite decades-old COBOL systems, helping enterprises modernize critical mainframe software faster and with less risk. - learn more
- Plus Capital participated in Wispr Flow’s $280M Series B, led by Menlo Ventures and joined by existing and new investors, valuing the AI voice company at $2B. The funding brings Wispr’s total capital raised to $361M and will support its expansion beyond dictation into meeting tools and proprietary speech technology, including its new Canto model. - learn more
- Alexandria Venture Investments participated in Leal Therapeutics’ $30M Series A extension alongside new investor Eli Lilly and returning backers including OrbiMed, Newpath Partners and SV Health Investors’ Dementia Discovery Fund. The biotech company will use the funding to advance clinical trials of LTX-001 for schizophrenia and LTX-002 for ALS, with initial schizophrenia trial data expected by year-end. - learn more
- BroadLight Capital participated in Higgsfield’s $400M Series B, led by DST Global and joined by investors including Goldman Sachs Alternatives, Smash Capital, Fifth Wall and Intel Capital. The AI video and image platform, now valued at $5.4B with $700M in annualized revenue, will use the funding for R&D, global infrastructure, AI hiring and international expansion. - learn more
This week, some of its biggest companies put money behind an AI startup promising to build something for them instead.
Los Angeles-based Stability AI raised $76M in Series B funding from an investor group that includes Electronic Arts, Sony Music Group, Universal Music Group and Warner Music Group. AMD Ventures and Pacific Alliance Ventures also joined the round, while LA-based MANTIS Capital and Sound Ventures are among the company’s existing backers.
The financing brings Stability AI’s total funding under CEO Prem Akkaraju to $232M, including two equity rounds and convertible notes. The company plans to use the new capital to expand its creative production tools, applied research and professional services across music, gaming and entertainment.
The amount is notable. The names attached to it are the bigger story.
Generative AI’s arrival in entertainment has been anything but quiet. Artists have questioned whether their work was used to train models without permission. Studios have faced pressure over how the technology could affect jobs. Record labels have pursued AI companies in court while simultaneously exploring how the same technology might fit into their businesses.
Now, several of the world’s largest entertainment companies are investing directly in one.
That does not mean the industry has resolved its concerns about AI. It means some of its biggest players would rather help shape the technology than wait to see what it becomes.
Stability AI is positioning itself for that opening. Rather than focusing solely on general-purpose models, the company is building tools specifically for professional creatives. Its recently launched Stable Audio 3.0 was trained on fully licensed music and lets artists generate, edit and arrange audio through a web platform or directly inside digital audio workstations.
Image Source: Stability AI
That licensed-data approach is central to the pitch. The next phase of creative AI will not be decided only by which company produces the most impressive model. It will also depend on which companies can earn the trust of the artists, studios and rights holders whose work gives those models value.
For its new strategic investors, the round offers more than financial upside. It creates a closer view into how generative AI may change production, a voice in how the tools develop and an opportunity to establish rules before those rules are established for them.
For Stability AI, the backing provides something equally important: credibility inside industries that have every reason to scrutinize what it is building.
The company now has capital and access to some of the largest catalogs, franchises and creative workforces in entertainment. What it does with that access will determine whether this becomes a meaningful alliance or simply an impressive collection of logos.
Either way, the industry is no longer watching from a safe distance.
It has entered the room.
LA’s Air-Taxi Plans Are Coming Downtown
While Stability AI is trying to change how entertainment gets made, Archer Aviation wants to change how people get to it.
AEG and Archer announced plans to develop downtown Los Angeles’ first vertiport at L.A. LIVE, creating a potential new stop in Archer’s proposed electric air-taxi network ahead of the 2028 Olympic and Paralympic Games.
Image Source: Archer
The planned site would sit beside Crypto.com Arena and allow passengers to travel to and from the entertainment district aboard Archer’s Midnight aircraft. The company says its network could turn drives that take an hour or longer into electric flights lasting approximately 10 to 20 minutes.
Archer has already identified SoFi Stadium, USC and Hollywood Burbank Airport as possible locations, with its recently acquired Hawthorne Airport expected to serve as the network’s central operating hub. As the official air-taxi provider of LA28 and Team USA, Archer has an unusually visible deadline for turning those plans into something tangible.
AEG and Archer have completed an initial feasibility study of the L.A. LIVE site, including reviews of land use, airspace, power availability and community impact. The next phase will examine operations and the passenger experience.
There is still a substantial distance between a proposed vertiport and a functioning air-taxi network. The infrastructure must be built, regulatory approvals must be secured and passengers must be persuaded that flying across the city is safer and more practical than staying on the ground.
Still, few locations could make that future feel more real than L.A. LIVE. Millions of people already pass through the district for concerts, games and major events. Placing a vertiport there would bring urban air mobility out of the concept stage and directly into public view.
Together, this week’s announcements show Los Angeles becoming a testing ground for two technologies still moving from promise toward everyday use.
One could reshape how entertainment is created. The other could reshape how Angelenos reach it.
In a city famous for both its creative industries and its traffic, that feels appropriately on brand.
More from this week’s LA startup and venture scene below.
🤝 Venture Deals
LA Companies
- Atorie raised a $9.5M seed round from investors including a16z speedrun, Night Capital and Lightspeed Venture Partners’ Jeremy Liew. The AI-powered fashion startup connects consumers directly with luxury manufacturers to offer high-quality goods without traditional designer markups, and will use the funding to expand logistics, production and its AI shopping tools. - learn more
- Long Beach-based Maglut Heavy Industries emerged from stealth with $3.1M in pre-seed funding from Wave Function, Nova Threshold and Julian Capital. The startup is developing a chromatography-based system to process and refine rare earth elements domestically, with pilot tests producing materials at more than 99.9% purity. - learn more
LA Venture Funds
- MANTIS Venture Capital participated in Voya Energy’s $35M Series A, led by Energy Impact Partners and joined by John Doerr, StepStone, Founders Fund, Overmatch and Seven Stars. The Hayward-based startup will use the funding to commercialize its aluminum-fueled generators, which provide clean, off-grid power for data centers and other energy-intensive operations without combustion or local air emissions. - learn more
- Regeneration.VC participated in eComID’s $17M seed round, led by Systemiq Capital and joined by Course Corrected, Stadium and returning investor CapitalT. The Stockholm-based startup will use the funding to expand internationally and scale its AI-powered Shopping Passport, which helps retailers personalize sizing and product discovery while reducing returns. - learn more
- Clocktower Technology Ventures participated in Helcim’s $53M Series C, led by BDC Capital’s Growth Venture Fund and joined by new investors Curql Collective and LA-based Gold House Ventures. The Calgary payments company will use the funding to expand its platform, develop additional financial services and serve more small and midsize businesses across North America. - learn more
LA Exits
- Altruist agreed to be acquired by Vanguard, giving the Los Angeles-based wealth technology and custody platform greater resources to expand its tools for independent financial advisors. Altruist will continue operating as a standalone business under its existing leadership and brand after the deal closes, which is expected later this year pending regulatory approval; financial terms were not disclosed. - learn more
- Personality AI has been acquired by WildBrain for approximately $11M in cash and 1M WildBrain shares upfront, with additional payments tied to future performance. The startup develops kid-safe conversational AI experiences for entertainment characters, including “Hey Peppa Pig,” and will help WildBrain expand its franchises into interactive products across toys, apps and digital platforms. - learn more