$4.71B has been invested across 1081 tech deals in the last five years into LA's tech scene. This guide details the most active investors, most well-funded private companies and investment trends in the greater Los Angeles area.

Los Angeles’ tech industry has grown into its own over the past five years. Total funding to Los Angeles tech companies has nearly tripled, early stage funding has grown, and the mobile & telecom sector has quadrupled in funding share.

This analysis provides an in-depth look at the financing and exit landscape to tech companies in the Los Angeles region as well as the investors and companies fueling the LA tech startup ecosystem.  If interested in more LA data, you may also want the previously issued Los Angeles Venture Capital Almanac and our research brief on LA’s largest VC-backed exits.

Note: Data in this report includes financings by angel investors, angel groups, mutual funds, hedge funds, venture capital, corporate and corporate venture investors. It is not just venture capital investors. Industries covered include mobile, internet, software, computer hardware and electronics (chips & semis). Geographies covered extend as far as Irvine/Orange.

Specifically, this Los Angeles private company financing and exit review will cover:

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Since the start of 2009, both tech deals and funding activity in the LA area have seen a marked rise. On the funding front, investment dollars have risen 163% when comparing 2013 vs 2009. Deals have seen steady and explosive growth hitting over 300 in 2013, a 180% increase from 2009.


On a quarterly basis, the increase in funding to Los Angeles has been buoyed by a number of notable funding rounds. Q2 2014 saw a peak in total funding, driven by Swagbucks’ $60M growth equity led by Technology Crossover Ventures, and TeleSign’s $40M Series B led by Adams Street Partners and Summit Partners. The last four quarters have seen very stable deal volume, with a slight dip in Q4 2013, but despite the single quarter dips, the overall trend is clearly up.  Deal volume has consistently been picking up in LA.



LA Financing Trends by Stage

Bolstered by notable exits for the Los Angeles region, including Oculus VR and Demand Media, early-stage activity has taken an increasingly prominent role in the funding landscape. Of note, 2012 saw Series A funding activity hit a five year high, driven by seven inordinately large A round transactions that were $20M+. The region’s late stage funding share is relatively small which is not typical given those rounds are much larger in general. It will be interesting to see if a choke point is forming in LA with overexuberance at the early stage but not sufficient follow-on investment for companies at the later stage. Of course, great companies will get funded so perhaps this takes care of itself naturally.


After capturing just 17% of deals in 2009, seed deal share more than tripled to a five year peak in 2012 before seeing a slight drop off in 2013. Series A has remained range-bound over the past five years, capturing between 26% and 32% of deals. All later stages have seen no change or declined since 2009, particularly Series E+, which dropped from 9% in 2009 to no deals in 2012.



LA Financing Trends by Sector

The Internet sector has dominated dollar share in the last five years, peaking at 71% in 2010, driven by HauteLook’s $31M Series C and Factual’s $25M Series A. Computer hardware & services and electronics have both declined since 2009, the former falling from 10% in 2009 to no deals in 2012, and the latter dropping from 13% in 2009 and 2012 to only 1% in 2013. Mobile has seen the greatest growth more than quadrupling from 7% in 2009 to 30% in 2013, driving down Internet’s dollar share to a five year low. Snapchat’s three funding rounds in 2013 from investors including Benchmark, Coatue Management, General Catalyst Partners and Institutional Venture Partners, amounting to over $120M were a primary driver.


The Internet sector has consistently led deal activity to Los Angeles companies since 2009 but did hit a five year low in 2013 as mobile reached a five year high. Software (non-internet/mobile) doubled on a YoY basis from 2012 to 2013 but remains a small player. Computer hardware & services and electronics have both declined to account for a combined 5% of deal volume.



Most Well-Funded LA Startups

JustFab, a fashion retail platform, is the most well-funded company in the Los Angeles region, with $215M received since its Series A in 2011. The company merged/acquired ShoeDazzle as well so the total funding into two companies is even higher. Mobile & telecom is the second most prevalent industry with 5 companies, including the second company overall, TelePacific Communications, which had not received funding since 2003 until its $125M Series D in 2011. Other bankrolled tech companies headquartered in Los Angeles include mobile app developer Snapchat, online legal document provider LegalZoom (which now counts Permira as its largest shareholder) and Google Ventures-backed video game entertainment network Machinima.



Investor League Tables

Upfront Ventures is the most active VC investor in the Los Angeles region with investments ranging from online food & grocery to content management to gaming companies. Upfront also participated in every funding round of Maker Studios, which was acquired by Disney in May for up to $950M. Upfront Ventures is followed by Mucker Capital and 500 Startups, as top early-stage investors in the region.


In terms of stage, Upfront Ventures also leads in early-stage activity since 2009, followed closely by seed investor Mucker Capital. Upfront’s largest early stage deal was their participation in the $25M Series A investment in Factual in 2010. 500 Startups, SV Angel and Siemer Ventures round out the top 5 most active investors in the region by unique company count. Note: investor league tables do not include angel investors or groups.


Redpoint Ventures is the most active investor at mid-stage (Series B and C) since 2009. Its largest deal was participation in Webvisible’s $20M Series C in 2010. Redpoint has a diversified portfolio with investments in LA spread across all stages and sectors though internet has received the most deals and funding. Redpoint has coinvested frequently with Accel Partners, another top mid-stage investor in Los Angeles.


Accel Partners is the most active late-stage investor over the past five years. Accel has invested heavily in LA-based internet companies and two of late-stage deals include OpenX Software’s $20M Series D and BeachMint’s $35M Series D. Accel coinvests frequently with New Enterprise Associates, one of the other prominent late-stage investors in Los Angeles. They both invested in BeachMint’s Series D in 2012.



Exit Activity

Exits have steadily increased since 2011. Notable exits include

  • Goodreads’ acquisition by Amazon for $150M in 2013
  • HauteLook’s acquisition by Nordstrom for $270M in 2011
  • Demand Media’s IPO which valued them at the time at $1.5B
  • Oculus VR’s $2B acquisition by Facebook in March 2014
  • Riot Games, a console and PC game developer, was acquired by Tencent for $472M in 2011
  • EdgeCast Networks, a content delivery service, was acquired by Verizon for $350M in 2013


Although six of the top ten exits with disclosed valuations are IPOs, M&A still accounts for the vast majority of all exits as is to be expected.


Rustic Canyon Partners and Clearstone Venture Partners are the investors with the most exits of LA-based companies over the last 5 years (based on exit count, not value). Rustic Canyon’s exits include cooking website Cooking.com and photonics solutions company Auxora, while Clearstone counts ad tech firm Rubicon Project and integrity management firm Integrien (acquired by VMWare) in its exits over the period.


All of the data underlying this analysis of the Los Angeles region is available as part of CB Insights private company database.

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  • http://nicklafond.me @thinkB1G

    Great round-up, gentlemen! The LA scene is red-hot right now, as evidenced by startup events drawing huge crowds, like we’ve never seen. General Assembly, Be Great Partners, Cross Campus, Innovate Pasadena — all are killing it.

  • Heiko Schmidt

    very motivating indeed. And LA is the world capital of content and content is king. There are many disrupters in the make right now, some of them will write history and contribute to this story.