Wonder Ventures Launches $31 Million Fund Focused Exclusively on LA Startups
After hitting the jackpot with hometown bets like shopping app Honey, Los Angeles venture capital firm Wonder Ventures is doubling down with a new early-stage fund focused exclusively on L.A. startups.
Santa Monica-based Wonder has raised $31 million for its new venture fund, founder and managing partner Dustin Rosen told dot.LA. The new fund is double the size of the $15 million pre-seed fund that Wonder raised in 2018, and like that one it will target fledgling L.A.-based startups that Rosen believes are too easily overlooked by larger VCs.
“The L.A. ecosystem is really mature as far as a place to build technology companies, and more capital than ever is coming into L.A. to fund our companies as they grow and scale toward an IPO,” Rosen said, noting that Wonder already deploys more than 90% of its capital in Southern California-based ventures. “We still believe that the earliest stage is underfunded—pre-traction and pre-seed. That stage is the hardest time to raise and get elite investors, and that explicitly is what Wonder does.”
Rosen pointed to an eclectic group of more than 60 L.A.-based founders and tech executives who have invested in its latest fund, including those from current and former Wonder portfolio companies like Clutter, Tala, and Honey. Other investors from local startup success stories like Snap, GoodRx, and Dollar Shave Club also pitched in.
Fom left to right: Valentina Rodriguez, senior investor; Dustin Rosen, managing partner; and Taylor Bolhack, head of platform and community for Wonder Ventures.
Courtesy of Wonder Ventures
Among the first companies to be funded by the new vehicle is RealAppeal, a Santa Monica-based startup that finds savings in homeowners’ property tax assessment bills through an appeals process. Rosen said he filed his own appeal on the company’s website as its founders made their pitch to him on the phone. “I hope to save thousands of dollars,” he noted.
Among Wonder’s most successful investments to date has been Honey, the ecommerce rewards app that PayPal acquired for $4 billion in 2019. The VC’s initial early-stage investment in the Arts District-based startup returned an exit worth more than Wonder’s entire $5 million first fund, according to Rosen.
The firm’s largest portfolio holding today is WhatNot, the Marina del Rey-based livestream auction marketplace that raised more than $220 million in venture capital last year on the way to reaching a unicorn valuation of $1.5 billion. That investment has proven even more lucrative than its bet on Honey; Rosen noted that the current value of Wonder’s stake in WhatNot is “worth more than the entire [$15 million] second fund.”
In addition to launching the new fund, Wonder has made two new hires to help oversee its portfolio of nearly 80 companies. Valentina Rodriguez, formerly an analyst and trader with Morgan Stanley, has joined the venture firm as a senior investor, while Taylor Bolhack, previously with Santa Monica-based micromobility operator Bird, has been named head of platform and community.
Wonder Ventures isn’t the only L.A-based VC firm targeting local seed and pre-seed startups. After five years with San Francisco-based Crosslink Capital, investor Joe Guzel has launched a fintech-focused early-stage fund with McLain Southworth called Haven Ventures, Guzel told the LA Venture podcast this week.
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“The current system can be really punitive to [parents] because it forces them to pay for and schedule childcare that they don't always need, or to schedule childcare that doesn't actually support the workdays that they need to have," Wolff told dot.LA.
Months later, the coronavirus pandemic forced Brella to shut down. But rather than shuttering their company for good, the co-founders saw that the pandemic’s new work-from-home paradigm only exacerbated the need for flexible childcare options. Brella reopened in June 2020, and today serves roughly 400 families whose kids, aged 3 months to 6 years, attend the Playa Vista facility for an average of four-to-five hours a day and twice per week.
On Tuesday, Brella announced a $5 million seed funding round that will allow the startup to open more facilities—it plans to expand to Hollywood and Pasadena by the end of this year—and improve its technology. The funding was led by Newport Beach-based Toba Capital and Brentwood-based Halogen Ventures, and takes Brella’s total amount raised to date to $8 million.
Brella’s Playa Vista-based childcare center lobby.
“What we found is that even pre-pandemic, and now especially post-pandemic, families' work lives are really dynamic; they're not always working this 9-to-5, Monday-through-Friday kind of role,” Wolff said. “Sometimes their childcare needs can vary day-to-day, week-to-week, and even month-to-month.”
Brella is part of a growing industry of childcare startups leveraging technology to help families find childcare solutions. Its ranks include San Francisco-based Wonderschool, which helps families start their own preschools or daycares, and New York-based Otter, which allows parents to crowdsource babysitting resources from other parents.
Through Brella’s app, parents can create a profile, upload necessary forms and documentation, and book times to drop their children off at the childcare center for a minimum of three hours. Brella offers different pricing packages depending on how far in advance parents want to schedule childcare and how often they need it.
As a licensed preschool, the curriculum that Brella teaches its pupils is inspired by progressive child development philosophies like Montessori, RIE and Reggio Emelia. The curriculum is adapted to how much time each child spends at the school; Brella’s educators create “projects and learning opportunities that can engage a child that might be here for the very first time, or is coming three days a week this week and five days a week next week,” Williams said.
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