Megadeals, IPOs and Multibillion-Dollar Valuations: LA's Startup Scene Is Thriving

David Shultz

David Shultz reports on clean technology and electric vehicles, among other industries, for dot.LA. His writing has appeared in The Atlantic, Outside, Nautilus and many other publications.

Megadeals, IPOs and Multibillion-Dollar Valuations: LA's Startup Scene Is Thriving
Photo by Jack Finnigan on Unsplash

The L.A. tech scene is booming despite a year-plus pandemic and a string of natural disasters. Rocket makers, sneaker sellers and fusion power creators were among those that dominated the list of L.A. venture deals for the first half of 2021.


On Wednesday, the National Venture Capital Association and Pitchbook released their Venture Monitor report which tracks investment across the country. Both Los Angeles and the U.S. overall notched record-breaking levels of VC investment as the COVID-19 pandemic rebound continues.

A few highlights from the report:

  • At the national level, megadeals of $100 million have become more common, and L.A. appears to be no exception, with all 10 of its largest deals coming it at $100 million-plus.
  • VC investment in Q2 for the Los Angeles-Long Beach area totaled $8.5 billion, spread across 365 different deals. That's slightly down from Q1's $9.4 billion, but still more than double the investment from the same time period last year ($3.9 billion).
  • Los Angeles remains a powerhouse, but it still lags behind Silicon Valley. The $8.5 billion dollars of Q2 investment puts Los Angeles-Long Beach second, behind only the Bay Area ($26.7 billion) and New York City ($12.6 billion) in terms of total VC deal activity. Boston, Seattle and Denver round out the top 6.
  • The white-hot market streak continues. For the year to date, VC investment in the Los Angeles-Long Beach area has totaled $17.9 billion across 762 deals. That's easily on pace to shatter 2020's record total of $22.7 billion.
  • The three largest deals in the Los Angeles-Long Beach area came from the aerospace industry. Elon Musk's SpaceX raised $1.2 billion while upstart rival 3-D rocketmaker Relativity Space pulled in $650 million sending its valuation soaring to $4.2 billion. Defense contractor raised $450 million catapulting the Irvine-based company's valuation to $4.6 billion.
  • Of the top 10 largest deals, three were fintech software companies.
  • Energy and software also received large investments in excess of $100 million.
  • Santa Monica scooter company Bird Rides, which is plotting out an IPO via SPAC, also made the list. The blank-check company Switchback II Corporation was marketing a PIPE offering to investors.
  • All of the top 10 largest VC investments were later stage investments—a trend which was generalizable across the entire United States.
  • Exits were strong nationally and for the Los Angeles-Long Beach area, with IPOs representing the dominant pathway to liquidity. The region's largest exits came from FIGS, ZipRecruiter and Bridg.
    • FIGS, the Santa Monica Healthcare apparel brand, IPO'd for an exit of $3.4 billion.
    • ZipRecruiter, the Santa Monica online recruiting platform, also IPO'd for an exit of $2.4 billion.
    • Bridg, the Los Angeles SaaS data infrastructure company, was acquired by Cardlytics for an exit of $350 million.

Here's a look at Pitchbook's list of the biggest second-quarter deals in Southern California — from the Santa Barbara area to Orange County:

    LA’s Data Center Supply Crunch

    🔦 Spotlight

    Happy Friday Los Angeles!

    The Los Angeles data center market is experiencing a significant supply crunch, ranking 12th in growth among top markets since 2020 with only 265 megawatts of colocation inventory (data centers where businesses rent space to store their computing hardware and servers). Despite this, demand is surging, driven by AI, cloud, and hyperscaler needs, with AI accounting for 20% of new data center demand nationally. This scarcity is creating a highly competitive environment, with vacancy rates at a record low 3% and asking rents rising 13-37% year-over-year. For Los Angeles, this presents both challenges and opportunities in the big picture. The city's strategic position as a global entertainment hub and its connectivity to international markets through subsea cables make it an attractive location for data centers. However, the limited inventory and rising costs could potentially hinder growth and innovation in the tech sector. To maintain its competitive edge, Los Angeles will need to address these constraints through new developments, such as GI Partners' 16 MW addition at One Wilshire, and by focusing on high-connectivity, high-power capacity submarkets. The city's tech community should prepare for a landscape of increased competition for quality data center space, higher costs, and the need for innovative solutions to meet growing demand, particularly in AI and cloud services. While Los Angeles faces a challenging data center supply crunch, its strategic advantages and ongoing developments offer a promising path forward.


    🤝 Venture Deals

    LA Companies

    • Daisy, a one-year-old startup that designs and installs smart home and office technology systems, raised a $7M Series B co-led by Goldcrest and Bungalow, with previous investors Bullish and Burst Capital also stepping up. The company has raised a total of $13.3 million. - learn more

    LA Venture Funds


      ✨ Featured Event ✨

      LA TECH CEO SUMMIT

      LA’s tech leadership is set to reunite after a long break! This two day summit will focus on building strong connections, sharing insights, and fortifying the local tech community.

      Learn More Here

      Register Here


      Download the dot.LA App

      🌐Decentralizing Data & Vacations: Sony's Web3 Leap and Sensible Weather's KOA Partnership

      🔦 Spotlight

      Happy Long Weekend Los Angeles!

      Sony Group is making a significant push into the blockchain and Web3 space, leveraging its Sony Pictures and Sony Music divisions along with a new global incubator. The company has developed the Soneium blockchain through Sony Block Solutions Labs, a joint venture aimed at accelerating Web3 innovation. Sony is launching the "Soneium Minato" public testnet and a developer incubation program called "Soneium Spark" to foster ecosystem growth and adoption. The initiative includes strategic partnerships with Web3 companies such as Astar Network, Circle, and Optimism. Sony aims to create a fan community centered on creators and connect diverse values through Soneium, with the ultimate goal of integrating Web3 services into people's daily lives. While the company acknowledges the challenges faced by Web3, including limited user adoption and the need for mainstream use cases, it remains committed to decentralizing the concentrated power of the current internet landscape.

      In completely unrelated and more digestible news Sensible Weather, a leading weather protection provider that we’ve featured many times, has partnered with Kampgrounds of America (KOA) to offer Weather Guarantees at over 450 KOA Campgrounds across the United States. This collaboration allows campers to purchase weather protection for their outdoor experiences, providing peace of mind and potential reimbursements of up to 100% of their nightly rate if weather conditions exceed predefined parameters. The partnership comes at an opportune time, as camping has seen a significant increase in popularity, with active campers growing by 68% over the past decade. If you are looking to do some camping this fall make sure you look into Sensible Weather protections to ensure that unpredictable weather won't dampen (nailed it) your camping experience.


      🤝 Venture Deals

      LA Companies

      • Space and Time, a blockchain data warehouse developer, raised a $20M Series A led by Framework Ventures. - learn more
      • Miris, a provider of spatial content streaming solutions, raised a $26M Seed Round led by IAG Capital Partners. - learn more

      LA Venture Funds

      • Fika Ventures led a $4.55M Seed Round for Revenew, a San Francisco startup that aims to help digital platforms and marketplaces manage their payments and optimize financial operations. - learn more
      • Bonfire Ventures participated in a $25M Series A for Supio, an AI platform for personal injury law firms. - learn more
      • Amplify LA participated in a $2M Seed Round for Pryzm, a startup that provides tools and data to help businesses navigate government contracting more efficiently. - learn more

        ✨ Featured Event ✨

        LA TECH CEO SUMMIT

        LA’s tech leadership is set to reunite after a long break! This two day summit will focus on building strong connections, sharing insights, and fortifying the local tech community.

        Learn More Here

        Register Here


        Download the dot.LA App

        Personality Assessments Improving Workplace Dynamics

        Misunderstandings can have significant and sometimes severe impacts, far beyond the hilarious cake pictured above. Many organizations are increasingly using personality assessments to improve team dynamics and productivity. Tests like the Enneagram, Myers-Briggs Type Indicator (MBTI), and DISC assessment are valuable tools for developing existing teams in addition to hiring new employees. These assessments provide insights into team members' motivations, communication styles, and work preferences, helping colleagues understand each other better. By highlighting the different personalities within a team, these tests can enhance communication, resolve conflicts, and optimize task assignments based on individual strengths. As companies aim for greater efficiency and collaboration, the Enneagram, MBTI, and DISC assessments are becoming essential for transforming established teams into more effective and cohesive units.


        Image Source: iEQ9

        Enneagram

        The Enneagram test is a sophisticated personality assessment that categorizes individuals into nine distinct personality types, each defined by unique motivations, fears,and behavioral patterns. This holistic approach enhances team dynamics in a business setting by fostering self-awareness, improving communication, and facilitating conflict resolution among team members. By understanding different personality types, teams can optimize their composition, tailor professional development, and create a more empathetic and collaborative environment. This framework not only helps leaders adapt their styles to better support diverse team members but also promotes inclusivity and effective collaboration, ultimately leading to improved team performance, productivity, and retention.

        Resources:iEQ9. We recommend getting an Enneagram coach to get the most out of the results.

        Key Features: Focus on core motivations. Accounts for personality shifts under stress or growth. Offers practical, actionable guidance for personal growth. Uses a dynamic, adaptive questioning approach. Claims 95% accuracy rate through advanced techniques.


        Image Source: DiSC Profile

        DiSC (Dominance, Influence, Steadiness, and Conscientiousness)

        The DiSC assessment is a widely used behavioral analysis tool that categorizes individuals into four primary personality types: Dominance, Influence, Steadiness, and Conscientiousness. For businesses, DiSC provides valuable insights into employees' communication styles, work preferences, and motivations. By understanding these behavioral tendencies, teams can improve collaboration, reduce conflicts, and enhance overall productivity. Implementing DiSC in a business setting can lead to more effective leadership, tailored communication strategies, and optimized task allocation based on individual strengths.

        Resources:DiSC Profile.

        Key Features: Designed specifically for workplace applications. Focuses on observable behaviors rather than psychological traits. Widely researched and validated over 40+ years. Provides practical strategies for improving interactions.


        Image Source: The Myers-Briggs Company

        The Myers-Briggs Type Indicator (MBTI)

        The Myers-Briggs Type Indicator (MBTI) is a widely used personality assessment tool that categorizes individuals into 16 distinct personality types based on four dichotomies: Extraversion/Introversion, Sensing/Intuition, Thinking/Feeling, and Judging/Perceiving. For businesses, the MBTI provides valuable insights into employees' communication styles, decision-making processes, and work preferences.This helps promote a more productive workplace, and enables employees to become involved in more meaningful ways, all while leveraging everyone’s unique strengths.

        Resources:The Myers-Briggs Company.

        Key Features: Focuses on preferences rather than traits. Focuses on how people perceive and judge information. Widely used in business and career counseling


        Download the dot.LA App

        RELATEDEDITOR'S PICKS
        Trending