Megadeals, IPOs and Multibillion-Dollar Valuations: LA’s Startup Scene Is Thriving

The L.A. tech scene is booming despite a year-plus pandemic and a string of natural disasters. Rocket makers, sneaker sellers and fusion power creators were among those that dominated the list of L.A. venture deals for the first half of 2021.

On Wednesday, the National Venture Capital Association and Pitchbook released their Venture Monitor report which tracks investment across the country. Both Los Angeles and the U.S. overall notched record-breaking levels of VC investment as the COVID-19 pandemic rebound continues.

A few highlights from the report:

  • At the national level, megadeals of $100 million have become more common, and L.A. appears to be no exception, with all 10 of its largest deals coming it at $100 million-plus.
  • VC investment in Q2 for the Los Angeles-Long Beach area totaled $8.5 billion, spread across 365 different deals. That's slightly down from Q1's $9.4 billion, but still more than double the investment from the same time period last year ($3.9 billion).
  • Los Angeles remains a powerhouse, but it still lags behind Silicon Valley. The $8.5 billion dollars of Q2 investment puts Los Angeles-Long Beach second, behind only the Bay Area ($26.7 billion) and New York City ($12.6 billion) in terms of total VC deal activity. Boston, Seattle and Denver round out the top 6.
  • The white-hot market streak continues. For the year to date, VC investment in the Los Angeles-Long Beach area has totaled $17.9 billion across 762 deals. That's easily on pace to shatter 2020's record total of $22.7 billion.
  • The three largest deals in the Los Angeles-Long Beach area came from the aerospace industry. Elon Musk's SpaceX raised $1.2 billion while upstart rival 3-D rocketmaker Relativity Space pulled in $650 million sending its valuation soaring to $4.2 billion. Defense contractor raised $450 million catapulting the Irvine-based company's valuation to $4.6 billion.
  • Of the top 10 largest deals, three were fintech software companies.
  • Energy and software also received large investments in excess of $100 million.
  • Santa Monica scooter company Bird Rides, which is plotting out an IPO via SPAC, also made the list. The blank-check company Switchback II Corporation was marketing a PIPE offering to investors.
  • All of the top 10 largest VC investments were later stage investments—a trend which was generalizable across the entire United States.
  • Exits were strong nationally and for the Los Angeles-Long Beach area, with IPOs representing the dominant pathway to liquidity. The region's largest exits came from FIGS, ZipRecruiter and Bridg.
    • FIGS, the Santa Monica Healthcare apparel brand, IPO'd for an exit of $3.4 billion.
    • ZipRecruiter, the Santa Monica online recruiting platform, also IPO'd for an exit of $2.4 billion.
    • Bridg, the Los Angeles SaaS data infrastructure company, was acquired by Cardlytics for an exit of $350 million.

Here's a look at Pitchbook's list of the biggest second-quarter deals in Southern California — from the Santa Barbara area to Orange County: