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XMegadeals, IPOs and Multibillion-Dollar Valuations: LA's Startup Scene Is Thriving
David Shultz is a freelance writer who lives in Santa Barbara, California. His writing has appeared in The Atlantic, Outside and Nautilus, among other publications.
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 Second Only to SF in Total Venture Deal Value: Report - dot.LA ›
- Here Are Los Angeles' Top Venture Capitalists - dot.LA ›
- Los Angeles Venture Capital Activity Was Up in Q3 - dot.LA ›
- VCs See Valuations Reach Record Highs as Optimism Stays High - dot.LA ›
- SoCal Venture Pipeline Connects Startups with Series A Funds - dot.LA ›
- Young LA Startups Saw Their Valuations Surge in 2021 - dot.LA ›
- Los Angeles Startups Closed a Record Number of Deals in Q3 - dot.LA ›
- VCs Are Flush, But Funding Mostly Male-Led Startups - dot.LA ›
- This Week in ‘Raises’, Our Roundup of LA Startup Funding News - dot.LA ›
- 5 Highlights From a Record-Smashing 2021 for SoCal Startups and VCs - dot.LA ›
- Los Angeles Venture Capital Activity Was Up in Q3 - dot.LA ›
- LA Startup News: DiCaprio Helps Launch a New VC Fund - dot.LA ›
David Shultz is a freelance writer who lives in Santa Barbara, California. His writing has appeared in The Atlantic, Outside and Nautilus, among other publications.
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Greater Good Health Raises $10 Million To Fix America’s Doctor Shortage
Keerthi Vedantam is a bioscience reporter at dot.LA. She cut her teeth covering everything from cloud computing to 5G in San Francisco and Seattle. Before she covered tech, Keerthi reported on tribal lands and congressional policy in Washington, D.C. Connect with her on Twitter, Clubhouse (@keerthivedantam) or Signal at 408-470-0776.
The pandemic highlighted what’s been a growing trend for years: Medical students are prioritizing high-paying specialty fields over primary care, leading to a shortage of primary care doctors who take care of a patient’s day-to-day health concerns. These physicians are a cornerstone of preventative health care, which when addressed can lower health care costs for patients, insurers and the government. But there’s a massive shortage of doctors all over the country, and the pipeline for primary care physicians is even weaker.
One local startup is offering a possible answer to this supply squeeze: nurse practitioners.
On Wednesday, Manhattan Beach-based Greater Good Health unveiled a $10 million Series A funding round led by LRVHealth, which adds to the startup’s $3 million seed round last year. The company employs nurse practitioners and pairs them with doctor’s offices and medical clinics; this allows nurse practitioners to take on patients who would otherwise have to wait weeks, or even months, to see a doctor.
“This access and equity issue is just going to become more pervasive if we don't do things to help people gain more access,” Greater Good founder and CEO Sylvia Hastanan told dot.LA. “We need more providers to offer more patients appointments and access to their time to take care of their needs. And in order to do that, we really need to think about the workforce.”
There has been a growing movement in the medical industry to use nurse practitioners in place of increasingly scarce primary care physicians. California passed a law in 2020 that will widen the scope of nurse practitioners and allow them to operate without a supervising physician by 2023. Amid a shortage of doctors, there’s also the question of what will become of the largest and longest-living elderly population in recent history, Baby Boomers. Public health officials are already scrambling for ways to take care of this aging demographic’s myriad health needs while also addressing the general population.
“By the time you and I get old enough where we need primary care providers to help us with our ailments and chronic conditions, there aren't [going to be] enough of them,” Hastanan said. “And/or there just isn't going to be enough support for those nurse practitioners to really thrive in that way. And I worry about what our system will look like.”
Nurse practitioners function much like doctors do—they can monitor vitals, diagnose patients, and, in some cases, prescribe medication (though usually under the supervision of a doctor). Nurse practitioners need to get either a master’s degree or higher in nursing and complete thousands of hours of work in a clinical setting. All told, it usually takes six-to-eight years to become a nurse practitioner, compared to 10-to-15 years to become a practicing physician.
Greater Good Health’s platform puts nurse practitioners in often years-long care settings where they manage patients—most of whom are chronically ill, high-risk patients that need to be seen regularly and thoroughly. This allows them to follow up more carefully on patients they have managed for years, instead of catching up on a new patient’s history and treating them in the moment. Patients, meanwhile, don’t have to see a rotating door of clinicians and can talk to a provider they already have an established rapport with.
The one-year-old startup will use the funding to provide learning and development opportunities for its nurse practitioners and also connect them with each other through virtual support groups. Burnout has been an issue across health care during the pandemic, spurring an exodus of nursing and support staff and leaving health care facilities woefully understaffed. Greater Good hopes that keeping nurse practitioners in more stable, years-long care situations and offering them career development opportunities will help retain them and keep them in the workforce longer.
“We want them to be well-rounded and balanced both in work and life, and we see that returns us healthier, more engaged and ready nurse practitioners,” Hastanan said.
Keerthi Vedantam is a bioscience reporter at dot.LA. She cut her teeth covering everything from cloud computing to 5G in San Francisco and Seattle. Before she covered tech, Keerthi reported on tribal lands and congressional policy in Washington, D.C. Connect with her on Twitter, Clubhouse (@keerthivedantam) or Signal at 408-470-0776.
Plus Capital Partner Amanda Groves on Celebrity Equity Investments
On this episode of the L.A. Venture podcast, Amanda Groves talks about how PLUS Capital advises celebrity investors and why more high-profile individuals are choosing to invest instead of endorse.
As a partner at PLUS, Groves works with over 70 artists and athletes, helping to guide their investment strategies. PLUS advises their talent roster to combine their financial capital with their social capital and focus on five investment areas: the future of work, future of education, health and wellness, the conscious consumer and sustainability.
“The idea is if we can leverage these people who have incredible audiences—and influence over that audience—in the world of venture capital, you'd be able to help make those businesses move forward faster,” Groves said.
PLUS works to create celebrity partnerships by identifying each client’s passions and finding companies that align with them, Groves said. From there, the venture firm can reach out to prospective partners from its many contacts and can help evaluate businesses that approach its clients. Recently, PLUS paired actress Nina Dobrev with the candy company SmartSweets after she had told them about her love for its snacks.
Celebrity entrepreneurship has shifted quite a bit in recent years, Groves said. While celebrities are paid for endorsements, Groves said investing allows them to gain equity from the growth of companies that benefit from their work.
“Like in movies, for example, where they're earning a residual along the way, they thought, ‘You know, if we're going to partner with these brands and create a tremendous amount of enterprise value, we should be able to capture some of the upside that we're generating, too’,” she said.
Partnering in this way also allows her clients to work with a wider range of brands, including small brands that often can’t afford to spend millions on endorsements. Investing allows high-profile individuals to represent brands they care about, Groves said.
“The last piece of the puzzle was a drive towards authenticity,” Groves said. “A lot of these high-profile artists and athletes are not interested, once they've achieved some sort of level of success, in partnering with brands that they don't personally align with.”
Hear the full episode by clicking on the playhead above, and listen to LA Venture on Apple Podcasts, Stitcher, Spotify or wherever you get your podcasts.
dot.LA Editorial Intern Kristin Snyder contributed to this post.
Rivian Stock Roller Coaster Continues as Amazon Van Delivery Faces Delays
David Shultz is a freelance writer who lives in Santa Barbara, California. His writing has appeared in The Atlantic, Outside and Nautilus, among other publications.
Rivian’s stock lost 7% yesterday on the back of news that the company could face delays in fulfilling Amazon’s order for a fleet of electric delivery vans due to legal issues with a supplier. The electric vehicle maker is suing Commercial Vehicle Group (CVG) over a pricing dispute related to the seats that the supplier promised, according to the Wall Street Journal.
The legal issue could mean that Amazon may not receive their electric vans on time. The dispute hinges on whether or not Commercial Vehicle Group is allowed to raise the prices of its seats after Rivian made engineering and design changes to the original version. Rivian says the price hike from CVG violates the supply contract. CVG denies the claim.
Regardless, the dispute could hamper Rivian’s ability to deliver electric vans to Amazon on time. The ecommerce/streaming/cloud computing/AI megacorporation controls an 18% stake in Rivian as one of the company’s largest early investors. Amazon has previously said it hopes to buy 100,000 delivery vehicles from Rivian by 2030.
The stock plunge marked another wild turn for the EV manufacturer. Last week, Rivian shares dropped 21% on Monday after Ford, another early investor, announced its intent to sell 8 million shares. The next few days saw even further declines as virtually the entire market saw massive losses, but then Rivian rallied partially on the back of their earnings report on Wednesday, gaining 28% back by Friday. Then came yesterday’s 7% slide. Today the stock is up another 10%.
Hold on tight, who knows where we’re going next.
David Shultz is a freelance writer who lives in Santa Barbara, California. His writing has appeared in The Atlantic, Outside and Nautilus, among other publications.