Coronavirus Updates: Why Smaller Venture Funds Are in Danger

Coronavirus Updates: Why Smaller Venture Funds Are in Danger

Here are the latest headlines regarding how the novel coronavirus is impacting the Los Angeles startup and tech communities. Sign up for our newsletter and follow dot.LA on Twitter for the latest updates.

Today:

  • More than 900,000 L.A. County Residents Jobless as Local Unemployment Hits 20%
  • Why Smaller Venture Funds are in Danger as the COVID-19 Pandemic Churns on

More than 900,000 L.A. County Residents Jobless as Local Unemployment Hits 20%

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The unemployment rate in Los Angeles County hit near 20% last month, a staggering figure that put into question the ability of the region to bounce back from the pandemic-induced economic free fall.

More than 900,000 Los Angeles County residents didn't have a job in April as the prolonged stay-at-home order closed retail shops, stopped factory lines and halted Hollywood. The downturn is the largest on record in California.

"We are dealing with Depression Era unemployment," Gov. Gavin Newsom who is facing a $54 billion state deficit told PBS News Hour. "The numbers that come out publicly are lagging. And the reality is that we are north of 25% (unemployment) in California."

California is looking to stem the economic devastation as it pushes to reopen the economy. On Monday, Newsom is expected to outline plans to restart film and television production, although it's unclear if it will resume in Los Angeles. It comes as local stores have reopened for curbside pick-up and traffic along freeways has begun to pick up.

Statewide unemployment for April was 15.5%, according to employment data taken from a federal sample survey of households that provides a more complete picture of job loss by also including individuals that may not have filed unemployment claims. In the county, the seasonally adjusted unemployment rate stood at 19.6%.

According to the figures - seasonally adjusted - about 931,000 people in Los Angeles County were without a job in April, upending the state's previous low unemployment.

Not one industry reported job gains during the month. Among the hardest hit sectors were retail, restaurants, tourism and manufacturing, according to a second survey of 145,000 California businesses that gives a further breakdown of how the devastation has played out in each industry from tourism to retail to finance.

Leisure and hospitality, like restaurants and amusement parks, accounted for more than a quarter of the county-wide job losses with employment down 38 percent from the previous month.

Why Smaller Venture Funds are in Danger as the COVID-19 Pandemic Churns on

via Pitchbook

Big venture capital funds are continuing to close with success while smaller ones — of which there are many in Los Angeles — are having more difficulty, according to a new research report from Pitchbook.

"Across private market strategies, this will push the balance even further toward the mega-funds that have been garnering such a large proportion of LP commitment dollars," wrote senior analyst Hilary Wiek. "Funds that have had a first closing and begun investing may have a difficult time with further fundraising if future investors are expected to buy in at cost on investments that now need to be written down. LPs appear to be pondering their commitment pacing this year, with many choosing to slow the pace at least somewhat."

Pitchbook says many LPs are holding quarterly meetings this month with their investment committees to discuss future allocations. So far at least, few LPs have defaulted but they have slowed down in their commitments. -Ben Bergman

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LA Tech ‘Moves’: Mapp Gains New CPO and CTO, Prodoscore Taps Boeing Exec

Decerry Donato

Decerry Donato is a reporter at dot.LA. Prior to that, she was an editorial fellow at the company. Decerry received her bachelor's degree in literary journalism from the University of California, Irvine. She continues to write stories to inform the community about issues or events that take place in the L.A. area. On the weekends, she can be found hiking in the Angeles National forest or sifting through racks at your local thrift store.

LA Tech ‘Moves’: Mapp Gains New CPO and CTO, Prodoscore Taps Boeing Exec
LA Tech ‘Moves’:

“Moves,” our roundup of job changes in L.A. tech, is presented by Interchange.LA, dot.LA's recruiting and career platform connecting Southern California's most exciting companies with top tech talent. Create a free Interchange.LA profile here—and if you're looking for ways to supercharge your recruiting efforts, find out more about Interchange.LA's white-glove recruiting service by emailing Sharmineh O’Farrill Lewis (sharmineh@dot.la). Please send job changes and personnel moves to moves@dot.la.

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This Week in ‘Raises’: GITAI Lands $30M, Steno Gains $15M

Decerry Donato

Decerry Donato is a reporter at dot.LA. Prior to that, she was an editorial fellow at the company. Decerry received her bachelor's degree in literary journalism from the University of California, Irvine. She continues to write stories to inform the community about issues or events that take place in the L.A. area. On the weekends, she can be found hiking in the Angeles National forest or sifting through racks at your local thrift store.

Raises
Image by Joshua Letona

A local space robotics startup raised fresh funding to expand the flight model manufacturing facilities throughout the U.S. and increase employment, while a remote litigation platform raised more funding to continue growing its footprint in new markets across the country, develop service channels for its clients and continue expanding its tech team.

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Gitai Secures $30 Million in Funding to Continue Space Robotics Developments

Samson Amore

Samson Amore is a reporter for dot.LA. He holds a degree in journalism from Emerson College. Send tips or pitches to samsonamore@dot.la and find him on Twitter @Samsonamore.

Gitai Secures $30 Million in Funding to Continue Space Robotics Developments
\u200bPhoto: Gitai

Space robotics company Gitai raised a $30 million Series B extension this week, bringing the total value of the round to roughly $47 million.

The funding will be used to further develop Gitai’s suite of space robots as well as build out its manufacturing footprint in Torrance. Previously Gitai announced it raised a $17.1 million Series B in March 2021; this additional raise is still part of that round.

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