Over the last ten years or so, LA’s startup scene has grown to the extent that it’s about to give Silicon Valley a run for its money!
Snap, LegalZoom, SpaceX, and Hulu have all made a home in the City of Angels.
Paradigm-busting companies like these brought with them a whirlwind of entrepreneurial energy that continues to reverberate all along the walls of Topanga Canyon. These companies inspire bold new startups to achieve similar success.
Impact of COVID-19 on LA startups
COVID-19 caused unprecedented business interruption across most industries in the Los Angeles area.
Tech startups faced some of their biggest challenges to date, including not being able to get venture capital funding because of a general lack of economic uncertainty. This hurt many companies who depend on a regular influx of cash to stay afloat.
Some early-stage companies in the area experienced severe revenue declines because customers could not pay on time or were tightening their belts. Widespread supply chain disruptions left a few startups unable to even manufacture their products.
However, there were also some unexpected positive developments as a result of the pandemic.
For example, many tech startups adapted well to remote work, providing more flexible working options for many employees going forward. Also, supply chain interruptions benefited companies offering online services, cloud infrastructure, and automation technologies.
Some LA tech startups even pivoted to create services to help individuals cope with specific COVID-19-related stress, such as remote psychiatric counseling.
5 LA startup accelerators
LA has one of the most flourishing startup ecosystems on the planet - and this is partially thanks to all the accelerators that make their home in the City of Angels.
Here’s what Amplify LA has to say about itself:
"At Amplify, our vision is clear—help passionate technology entrepreneurs grow their startups into strong, scalable, and successful companies. We like to invest early and are dedicated to supporting our founders throughout the lifetime of their business."
Amplify LA focuses on tech or tech-enabled businesses. Anybody who wants to apply for their program must have a pitch deck and a business plan, and the program lasts four to eight months. Amplify provides seed funding of $50,000 to $200,000 and free workspace and mentorship.
Cedars-Sinai Accelerator is specifically designed for startups that positively impact the healthcare sector.
It’s a three-month program and provides early-stage companies with $100,000 in funding, mentorship from over 300 leading clinicians and executives, and access to Cedars-Sinai Hospital. They also get exposure to a broad network of entrepreneurs and investors, technical resources, and office space.
Disney Accelerator helps technology innovators offer new media and entertainment experiences for customers. Any media or entertainment company can apply.
If you're accepted, you'll get $20,000 in stock and a $100,000 convertible debt note to help fuel your entrepreneurial dreams.
Los Angeles Founder Institute
The Los Angeles Founder Institute works with entrepreneurs in the pre-seed stage—before they’re evolved enough to get accepted into a seed-accelerator program.
If your company has significant funding, traction, or revenue, then you’re probably too far along in the business development process!
The Founder Institute provides you with experts with impressive credentials who are invested in your success and is world-famous for its structured business-building process that has helped graduates raise over $1 billion. Any tech or tech-enabled business is eligible to apply.
To create a strong support network, participants join an “equity collective” where they contribute 4% of their company to a shared pool. Any financial returns are then shared equally with each cohort’s alumni, the mentors, local leaders, and the Founder Institute.
Global Sports Venture Studio
Here’s what the Global Sports Venture Studio has to say about itself:
“We’re building a platform for sports industry leaders ready to embrace disruption, experiment with innovation, and engage with the global startup ecosystem in strategic and risk-controlled ways.”
It focuses on startups that are advancing the sports sector through technology. If selected, you could potentially receive $120,000 (or more) in funding.
6 LA startups to look out for
Along with great accelerators come, of course, great startups! Here are some LA-based startups making waves.
Uber co-founder Travis Kalanick spent $130 million of his own money on CloudKitchens, a ghost kitchen startup.
The company rents commercial facilities and transforms them into shared kitchen spaces for restaurateurs who use them for food delivery.
These ghost kitchens are delivery only, which means restaurant staff won’t have to worry about maintaining the dine-in portion of a brick-and-mortar location. Kalanick uses warehouses, shuttered restaurants, and other types of buildings to run his operations.
Most of the restauranteurs renting the kitchens use platforms like DoorDash and UberEats to deliver their food.
In 2019, Saudi Arabia’s sovereign wealth fund poured $400 million into the business.
Balancing your checkbook can be a headache-inducing exercise. Enter Dave, a financial app founded by Jason Wilk.
Dave is one of the highest-rated personal financial management apps in the country. It's designed to help the four in five Americans who live paycheck to paycheck finally get control over their finances.
The app wants to make overdraft penalties a thing of the past. Dave warns you when you're in danger of going into overdraft and will even lend you up to $250 interest-free until payday. Three million users use Dave to budget so they can avoid the $30 billion in overdraft fees the nation's banks collect each year.
Even Mark Cuban, who provided the startup with an infusion of $3 million in venture capital cash, admitted to having been a chronic overdraft user in his twenties. For a buck a month, the app syncs with customers’ checking accounts to monitor their spending and predict when they’re at risk of overdrawing their accounts.
Wilk had this to say: “Overdrafting is such a widespread problem. It’s like the ultimate, most expensive form of credit.”
Boosted Commerce is a CPG (consumer packaged goods) platform focused on acquiring, investing in, and growing third-party seller businesses on Shopify and Amazon.
Currently, there are approximately two million third-party sellers on Amazon alone, and these companies account for 62% of the platform’s total sales.
Boosted was founded by serial entrepreneurs who have scaled several nine-figure businesses between them. One of these founders is Charlie Chanaratsopon, the brainchild behind the accessory retail chain Charming Charlie, which he built from the ground up, going from one store in 2004 to a global brand with $500 million in revenue.
The team at Boosted Commerce continues to scout out promising possibilities across platforms like Amazon. These are private-label FBA businesses uniquely positioned for growth in the next few years. Boosted Commerce completes transactions of companies it buys in less than 45 days.
Last year, the company raised an impressive $87 million in new funding.
ProducePay is an agricultural fin-tech startup providing financing, analytics, and tools for the fresh produce market.
The idea was conceived at Cornell University and rapidly gained momentum after enjoying widespread support from faculty and students.
The most important thing this disruptive business model does is help small and medium growers exporting their produce to the US obtain financing. The market insights the platform provides ultimately help them grow their businesses.
Cloud Imperium Games
Cloud Imperium Games is an independent games studio.
Chris Roberts, the mind behind the best-selling Wing Commander and Freelancer series, is the founder. The company wants to create an entirely new experience in game development by sharing the process with players.
Gamers come to know the team as they follow them every step of the way throughout the game development process. The incorporation of players’ feedback into the games helps to promote an engaged community feel to the studio.
Ordermark is an online ordering system for restaurants that increases efficiency and boosts profits by combining orders across the major online-ordering services into a single dashboard.
It operates Nextbite, one of the first virtual kitchens.
Alex Canter, Jay Fuhr, Michael Jacobs, and Paul Allen founded the company in 2017. It's backed by investors including Matchstick Ventures, RiverPark Ventures, Techstar Ventures, and TenOneTen Ventures.
Last year, the company received $120 million in a funding round led by SoftBank's Vision Fund 2. In 2019, the startup raised $18 million at a $70 million valuation.
Prepare for unexpected turnover with Hunt Club
Hunt Club can help you to build a talent pipeline full of high-caliber candidates three to six months in advance. Doing this protects you from unexpected turnover and provides your startup with the talent it needs to move to the next stage of evolutionary growth.
Get started with our unique recruitment network today!