CB Insights

Los Angeles Tech Venture Capital Almanac

A free report detailing the trends and players in Los Angeles’s growing technology venture capital ecosystem

Los Angeles has its roots firmly in the entertainment business and the creative industries. But over the past several years, the greater LA area has developed a burgeoning array of tech startups operating in diverse markets ranging from eCommerce to mobile messaging to multi-channel networks. Among the emerging tech companies that call LA home are Snapchat, Nasty Gal and Fullscreen.

And while venture capital financing to the LA tech ecosystem trails that of other U.S. venture markets such as New York and Silicon Valley, it’s clear that venture capital investors see the Southern California hotbed as an increasingly attractive area for tech innovation and creativity that can appeal to the masses. Since the start of 2009, venture investors have deployed $3.5 billion across 525 deals involving tech companies in the greater Los Angeles area.

The 100-page Los Angeles Tech Venture Capital Almanac gives a comprehensive view into the growing crop of startups and investors in the LA tech ecosystem. Specifically, the full report covers:

Below is a high-level summary of some of the report’s highlights. For all of the findings, download the entire report free.

Los Angeles is renowned as a digital media and entertainment hub. And over the past four years, LA has also developed a promising tech ecosystem with startups including Snapchat, Nasty Gal and TrueCar calling LA home. Through December, LA tech venture funding and deal activity has already hit a five-year high in 2013. Of note, venture capital deals to LA tech startups have risen steadily over time. In fact, LA has seen 42% more tech VC deals in the first three quarters of 2013 than in all of 2009. Each of the past six quarters has seen 30 or more venture deals to LA tech startups.

Los Angeles Financing History: Investment Deals and Dollars

Fueling the deal growth has been seed-stage activity to LA tech startups. In fact, Seed deal share in LA has jumped from 10% in 2009 to 43% in 2012. Early-stage startups (Seed/Series A) took over 70% of all deals in 2012 and continue to see strong deal activity in 2013 YTD.

Los Angeles Financing History: Deal Share

Peeling back funding share by sector to the LA tech market, we see that the Internet sector has taken over half of all venture funding to LA tech companies in each year since 2009. But 2013 has seen a funding boom within mobile startups, which have taken nearly 1/4 of all LA tech VC funding dollars in the year to date.

Los Angeles Financing History: Dollar Share

Since 2011, there have been 59 venture-backed tech exits in Los Angeles. Among the largest LA-based venture-backed tech exits in recent years were Bessemer Venture Partners-backed Cornerstone OnDemand (IPO) and Benchmark-backed Riot Games (acquired by Tencent).

Los Angeles Exit History

Los Angeles Tech Investor League Tables

Upfront Ventures is the most active investor in Los Angeles-based tech startups since 2009. The top 3 most active investors are rounded out by 500 Startups and Greycroft Partners, the investment firm based in NY and LA.

  • Upfront Ventures

  • 500 Startups

  • Greycroft Partners

  • Siemer Ventures

  • SV Angel

  • Rincon Venture Partners

Given the importance of network centrality in driving venture capital performance, it is perhaps unsurprising that the most active LA tech venture capital firms frequently share deal flow with each other and have strong syndicate relationships with their peers. Upfront Ventures, for example, has completed several deals with Greycroft Partners, which has a strong presence in LA. (Note: Investor syndicate dashboards for the most active VC investors in LA tech can be found in the report.)

Upfront Venture's Investment Syndicate

As previously mentioned, tech seed investments have blossomed in LA. In fact, between 2009 and June 2012, 11 different investors seeded five or more unique LA-based companies. Of the 11 most active LA seed investors, Lerer Ventures leads the list of investors in terms of its seed investments having the highest rate of receiving follow-on investment, followed by Upfront Ventures and New York early-stage fund Founder Collective. (Note: A full ranking of the firms can be found in the report.)

  • Lerer Ventures

  • Upfront Ventures

  • Siemer Ventures

  • Founder Collective

  • Baroda Ventures

  • 500 Startups

The Internet sector dominates LA tech investments since 2009 and there are a handful of investors who have been significantly active on the digital front. 500 Startups is the most active investor in Los Angeles-based Internet startups, followed by Greycroft Partners, Siemer Ventures and Upfront Ventures.

  • 500 Startups

  • Greycroft Partners

  • Siemer Ventures

  • Upfront Ventures

  • SV Angel

The Most Well-Funded Los Angeles Tech Companies

Fueling the growth in LA’s tech startup scene are several firms that have raised considerable amounts of funding and may go on to provide further momentum to the ecosystem with a future IPO or M&A exit. The top 5 tech startups in the greater Los Angeles area (which includes Irvine and Orange), listed below, have collectively raised over $950 million. (Note: A list of the top 10 most well-funded LA tech startups can be found in the full report.)

  • TrueCar

  • SolarFlare Communications

  • JustFab

  • Snapchat

  • Specific Media

We're extremely excited to be partnering with Orrick to offer the Los Angeles Tech Venture Capital Almanac to the ecosystem of startups, investors and advisors in the greater LA area.

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Photo credit: User: Magnetic Lobster