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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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What Data Does Snapchat Collect?
Snapchat, their primary application, collects a myriad of data on its roughly 363 million daily active users, from basics like device information to detailed location tracking. "From day one, we’ve embraced data minimization, and believed that the best way to protect user privacy is to not store data at all, and if we do have to store it, to do so for a short and fixed period of time," Snap spokesman Pete Boogaard told dot.LA.
As such, like most tech companies’ privacy policies and terms of service, the verbiage is intentionally vague or full of legalese designed to make the user gloss over and click “agree.” But Snapchat does have to provide its users some details of how it collects, stores, and uses the data it gains from interacting with the app.
Bill Budington, a senior staff technologist at the Electronic Frontier Foundation, told dot.LA that the common phrase, “necessary to provide service,” is particularly concerning.
“These are very vague ways to basically give a green light to very permissive practices in terms of your data,” Budington explained. He pointed out the ambiguous nature of the word “necessary,” adding, “[tech companies] can deem all sorts of things necessary, [including] using your location at every moment to better tailor their services to your life.”
While Snapchat’s terms of service haven’t changed since last November, the company most recently updated its privacy policy on July 29. Let’s dive into the various types of data Snapchat collects, how it stores it (and for how long), and perhaps most importantly, how Snapchat says it’s used.
Why Does Snapchat Collect Your Location Data?
Snapchat is very invested in collecting users’ precise location data, if users allow it. Its Snap Maps feature launched in 2017 lets users opt-in to showing their Bitmoji avatar on a map corresponding to their location and also allows them to track other friends who have opted in. It’s not dissimilar to Apple’s FindMy app.
In the past, the feature has raised concerns for its ability to make it easier for bullies and stalkers to find targets. Snap Map location, however, isn’t public information. Snapchat says location on Snap Maps will disappear after 24 hours, or when a user deliberately goes into “ghost mode” to hide from friends – but that doesn’t mean the app still isn’t tracking their movements. The company noted that unless you opt-in to live location sharing, the Snap Map won’t update with your location when you’re not actively using it.
Boogaard told dot.LA that while many of Snapchat’s core features do require location tracking, “location-sharing is off by default for all users” and “Snapchatters have complete control over their location sharing.” Snapchat added that there is no option to share your location with any user you aren’t friends with and that users have to individually select friends to share their location with.
Snapchat clarified that it does use location data to provide its Geofilters – custom photo and video filters often themed around specific places or events – and show people what’s nearby (also useful for ad purposes).
“We don’t share personal data about the users of the Snapchat app with data analytics providers,” Boogaard said.
Snapchat employees can also allegedly access all this information, and more – in 2019 Motherboard reported on a tool called SnapLion that it claimed was abused by employees to “spy on users.” In response to the report, Boogaard told dot.LA, “Any perception that employees might be spying on our community is highly troubling, and wholly inaccurate." Boogaard added, "Protecting privacy is paramount at Snap. We keep very little user data, and we have robust policies and controls to limit internal access to the data we do have, including data within tools designed to support law enforcement. Unauthorized access of any kind is a clear violation of the company's standards of business conduct and, if detected, results in immediate termination."
How Does Snapchat Use Your Content?
Snapchat can see the snaps you send, who is receiving them, and how often you’re online, as well as the metadata in each image.
Snapchat’s Streak feature (which tracks how long you and friends have regularly been sending and opening each other’s content) is one reason why the app also collects data on how often you and your friends open messages or capture screenshots.
It also tracks and scans the content users upload to its Memories feature. This is to train its AI to recognize the content of user images. In its privacy policy Snapchat notes that “if there’s a dog in your photo, it may be searchable in Memories by the term ‘dog,’” as part of its goal to make image search more accessible.
Snap’s policy also dictates that any public content a user generates on Snapchat is also fair game for the company to share though it doesn’t say how it will share this content.
What Data Does Snapchat Collect From Accessing Your Camera?
Besides the typical use for taking pictures, Snapchat can also access information from Apple’s TrueDepth camera – the front-facing, high-powered cameras that Apple’s iPhone X uses to record Face ID and Memoji data.
Snapchat says it uses this data “to improve the quality of Lenses”—its filter and augmented reality feature. But it also said it doesn’t collect biometric information, much less store the data on its servers or give it to any third parties.
Still, that’s a practice that’s come under scrutiny recently. In August, Snap was sued, accused of violating Illinois’ Biometric Information Privacy Act by collecting and storing users’ biometric data without their consent. That $35 million case is expected to head to settlement next week, after a judge couldn’t rule in favor of either party. "Snap continues to vehemently deny that Lenses violate BIPA, which was designed to require notice and consent before collecting biometric information used to identify people," Boogaard told dot.LA.
How Does Snapchat Use Your Data?
Now that we know all the information Snapchat collects, what is the company doing with it?
The main use case is advertising. Snapchat has a myriad of advertisers on its platform and they are all eager to turn users into sales by showing them the most relevant ads. Ad pricing starts at a modest $5 per day, so theoretically anyone with a marketing budget and the right connections could use Snap’s tools to market to its growing audience of Gen Z and Millennials.
Snapchat promises advertisers “advanced targeting capabilities,” and the benefit of finding a target audience using its location, demographics, interest and device data.
But who’s getting this information? That’s where things get vague. Snapchat doesn’t have to tell users specifically which companies are getting access to their data. The company notes it may share information with service providers that it contracts for services like ad analytics or payments. The company also says it might share user information with “business partners that provide services and functionality” for Snapchat, but again, doesn’t elaborate any further.
Snapchat also says it will share information about users if it could help “detect and resolve any fraud or security concerns, comply with any investigations, legal processes or regulations and to investigate potential terms of service violations.”
Snapchat doesn’t have to tell users when it turns over this data, though. In fact, most apps don’t.
How Does Snapchat Store Your Data?
Snap’s Support site notes Snapchat servers are designed to delete all Snaps automatically after they’ve been viewed by every recipient; the app’s trademark fleeting quality. The servers will delete unopened Snaps between two people after 31 days, and unopened Snaps sent to a group chat after 7 days. Snaps sent to your story are wiped from the servers 24 hours after posting.
Snapchat also says that when you delete a Snap in chat, it deletes it from its servers and will “make our best attempt” to wipe it from your friends’ devices.
If you post a Snap to Memories, though, Snapchat’s servers will back them up forever – unless you delete them, in which case they’ll be erased ASAP.
So what’s the safest way to protect your personal information on Snapchat? Well, Budington recommends an easy fix: simply don’t use it. But for people who are determined to keep their account but want to access what Snapchat collects, there are ways to download your Snapchat data.
You can also opt-out of audience and activity-based ads and third-party ad networks. This will mean the ads on your Snapchat will be less relevant, but the trade-off is that the app will use less of your personal data for marketing purposes.Snap is an investor in dot.LA.
Correction: An earlier version of this article incorrectly described Snap Map's location tracking feature. The feature needs to be enabled first, and Snapchat offers the ability to turn off the feature in Map settings.
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