The Strand 🌴 - January 20, 2019
LA-based gaming companies continue to raise capital, Amplify.LA is raising $30M for Fund IV, Snap CFO Tim Stone is resigning, Lance Armstrong debuts his new venture firm, and Lime raises more money to compete with Bird.
Welcome to the eighteenth edition of The Strand, a weekly-ish newsletter covering venture capital, private equity, and general business news from around the Los Angeles area. My name is Brendan Boken, a native of Southern California. Feel free to connect with me on LinkedIn, send deals/news to brendanboken@gmail.com.
Venture Capital Funding
AlwaysAI, a year-old, San Diego, California-based startup that’s trying to bring deep learning computer vision to embedded devices, has raised $4 million in Series A funding led by BRV with participation from AlwaysAI co-founder and CEO Marty Beard. Biometric Update
CareerArc, a nine-year-old, Burbank, California and Boston, Massachussets-based HR tech company, has raised $30 million in growth equity funding led by PeakEquity Partners. PE Hub
Jam City, an eight-year-old, Los Angeles, California-based mobile gaming studio, has raised $145 million in funding from investors including JPMorgan Chase Bank, Bank of America Merrill Lynch, Silicon Valley Bank, Suntrust Bank, and CIT Bank. The company is coming off a strong year of growth as its hit game, “Harry Potter: Hogwarts Mystery”, became the company’s fastest title to hit $100 million in revenue. TechCrunch
Private Equity Funding
Brentwood Associates, a Los Angeles, California-based private equity firm, acquired a majority stake in Afterburn Holdings, a Houston-based Orangetheory Fitness franchisee. Financials terms were not disclosed. Business Wire
Liquidity / Exits / M&A
BYJU’s acquired OSMO, a Palo Alto, California-based developer of augmented reality educational applications for $120 million. OSMO had previously raised $32.5 million in venture funding from Santa Monica-based Upfront Ventures, Accel, K9 Ventures, Shea Ventures, and Mattel. Live Mint
New Funds
Amplify.LA, the Los Angeles, California-based seed-stage fund and accelerator focused on LA-based startups, is looking to raise up to $30 million for it’s fourth fund. The firm has already closed on $10.9 million in committed capital per the firm’s SEC filing. So Cal Tech
IPOs
No Los Angeles-based companies filed for IPOs this past week.
Featured Jobs
Cie Digital Labs, an innovation and growth accelerator for large enterprises and emerging startups, is hiring a UX Designer in the company’s Irvine office.
Inspire, a startup building the world’s most consumer-focused clean power platform, is hiring a Community Manager in the company’s Santa Monica office.
RealtimeBoard, a leading visual collaboration platform for cross-functional teams, is hiring a VP of People in the company’s Greater LA office.
SteelHouse, a marketing platform focused on advertising technology, is hiring a Senior Account Executive - Inside Sales in the company’s Culver City office.
News, Resources, & Required Reading
Amplify.LA released its Q4 2018 LA Seed Deal report last week, encompassing all seed funding to LA companies in Q4. Some highlights:
94 LA companies raised $1.98B in Q4, making it the most active quarter in 2018
eCommerce was the most-funded sector, while marketplace funding fell
Average round size for LA seed deals was up ~10% YoY
Consumer Products and Services remained the most-funded category
In 2018, venture funding in LA topped $6.4B - the highest year on record since 2000
Q4 2018 alone showed a 100%+ increase over the prior quarter, as a number of LA companies raised large expansion rounds
Notable companies that raised money in Q4 2018 included Ready.Set.Food, Elementary Robotics, and TapCart
Another week, another departure at Snap. CFO Tim Stone is resigning after reportedly going behind CEO Evan Spiegel’s back to ask for more money. People familiar with the matter told Bloomberg that Stone appealed directly to the board for a raise, which he was denied. Stone only held the position for eight months, but will stay on until Snap’s Q4 earnings call in February. Bloomberg and the Financial Times also reported that his salary when he joined the company eight months ago was $500,000 a year plus restricted stock units worth $20 million. Business Insider
At least 20 executives have left Snap since the company went public in March 2017. The list of individuals who have departed the camera company include Head of Global Strategic Partnerships Elizabeth Herbst-Brady, VP of Communications Mary Ritti, and Chief Strategy Officer Imran Khan, among others. $SNAP stock is currently trading at $6.18 / share and was down 10% in pre-market trading this past Friday. Business Insider
California’s coast is going to look very different by the end of this century. As Antarctica continues its climate change-induced thaw, the Pacific is expected to swallow between a third and two-thirds of Southern California’s beaches, damaging infrastructure like ports, piers, and lapping at the foundations of thousands of coastal homes. LA Magazine
First Round Capital has unveiled a new fund to invest in recent graduates called Graduate Fund. The investment initiative is targeting founders who may have already had a job or two, are recently out of undergrad or grad school, and thinking about starting their first company. The fund has invested as early as the first major check in addition to kicking off or filling a seed round. Graduate Fund - Website
Lance Armstrong, former cyclist, has founded his own venture firm, Next Ventures. The fund will back startups in the sports, fitness, nutrition, and wellness markets. The firm also announced its first investment in Carlsbad, California-based PowerDot, a 2.5-year-old maker of an app-based, smart muscle stimulation device that sends electrical pulses to contract tender soft tissue, allowing runners, cyclists, and other athletes to recover from workouts. Armstrong now lives in Colorado full-time. TechCrunch
Lime, the e-scooter company going toe-to-toe with Bird and numerous other mobility startups, is finalizing a new round of funding valuing the company at about $2 billion, excluding the new cash. Lime in recent days has been circulating documents to some of its smaller shareholders to gauge interest in the new fundraising round. The company’s larger backers including Andreessen Horowitz, Uber, Alphabet, and new investor Bain Capital Ventures are all expected to participate in the round. The market for e-scooters has cooled over the last few months as Bird recently closed a new round of funding at a flat valuation of $2 billion last week. Recode
Masayoshi Son, chairman of Softbank, may be the most powerful person in Silicon Valley. His $100B Vision Fund has dramatically impacted funding for startups and venture capital investing since its creation in October 2017. This profile from Fast Company gives an overview of Son’s audacious vision for the future, his thoughts on artificial intelligence, real estate, computing, software, mobility, and more. Highly recommend this read. In addition, Softbank recently led the $385 million Series B round for Santa Monica-based car-leasing app Fair.
Online dating company Match Group Inc. and its parent company IAC / InterActiveCorp have filed a lawsuit against Tinder co-founder Sean Rad, accusing him of copying company files and other proprietary information. The lawsuit claims at least $250 million in damages from Rad. Reuters
Snap’s global security chief, Francis Racioppi, was fired recently after a multi-month investigation found that he had an undisclosed relationship with a woman from a third-party consulting firm that he paid a sizable, six-figure amount of money to on behalf of the company. Cheddar
The 50 Best Workplaces in Technology. Fortune
Tesla is cutting its full-time staff headcount by about 7 percent as it ramps up production of its Model 3 sedans, CEO Elon Musk said Friday. Tesla shares fell 13 percent by the end of trading last Friday. CNBC
WeWork CEO Adam Neumann has partial ownership of three properties where WeWork is, or will be, a tenant, presenting conflict of interest issues. TechCrunch has seen excerpts of the company’s prospectus for investors that details upwards of $100 million in total future rents WeWork will pay to properties owned by Adam Neumann. TechCrunch
Take a Break
A Malibu estate designed by one of the famed ‘New York Five’ architects’ Charles Gwathmey, best known for his renovation of Frank Lloyd Wright’s Guggenheim Museum in the 1990’s, is on sale for $125 million. Forbes
A 20 foot long great white shark named Deep Blue was spotted off the coast of Honolulu this past week. CNN
A three day, $17,500 golf weekend.
If Hollywood did the 10-year challenge, here’s what it would look like.
Live updates: Rams vs. Saints in the NFC Championship game. LA Times
RIP, John Bogle, Vanguard Group founder and index fund pioneer. He passed away this past week at age 89. Wall Street Journal
The 100 Most Photogenic Spots in LA. Instagram influencers welcome.
This extravagant mega mansion in Los Angeles, which includes a helipad, five bars, a bowling alley, a 40 seat-movie theater, an 85-foot infinity pool and massive candy wall, just got a $100 million price cut. You can take a video tour of the mansion here.