Disney’s acquisition of Maker Studios represents a significant win for the Los Angeles tech ecosystem. And Facebook’s acquisition of Oculus VR is even bigger. In fact, based on CB Insights data, Oculus was the largest venture-backed IPO or M&A to take place in the LA or Orange County area in the last five years.
Facebook’s $2B acquisition of Oculus comes just three months after the virtual reality company raised a $75M Series B round led by Andreessen Horowitz (and a little more than a month after Facebook acquired WhatsApp for up to $19B). Meanwhile, the acquisition of Maker Studios at its $950M price with earnouts would be the third largest venture-backed IPO or M&A tech exit in LA since 2009 by valuation at the time exit – ranking behind Oak Investment Partners-backed Demand Media’s $1.5B IPO. But with Demand now trading at nearly a third of its IPO market cap having faced heavy criticism of its ‘content farm’ model, the case could be made that Maker represents a bigger win for the ecosystem. It should be said, though, that Bessemer Venture Partners-backed cloud talent management firm Cornerstone OnDemand has continued to soar after its 2011 IPO and now trades at $2.7 billion.
The chart below highlights the top 10 largest recent M&A or IPO tech exits (since 2009) in Los Angeles and Orange County by valuation at the time of exit. Given that the LA ecosystem has seen venture capital investors deploy over $3.5 billion over the past five years, it wouldn’t be surprising to see more distinctly SoCal VC wins in the near future.
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Note: The valuation used on IPOs is based on the company’s day 1 IPO valuation.