LA’s evolution into the diverse tech ecosystem it is today has caught the interest of international investors. From Tencent’s massive investment in Snap to Virgin Group’s stake in Hyperloop One, excitement in local innovation has grown to the point where it’s no longer uncommon to see international venture capitalists participating in fundings.
Founded in 2017, London-based firstminute capital is a $100 million fund for seed-stage ventures backed by Tencent, Atomico and 29 unicorn founders. We caught up with co-founder Spencer Crawley and limited partner Tommy Stadlen to discuss their thoughts on LA tech’s evolution, Brexit and the startups that put Silicon Beach on the map.
From a tech standpoint, LA is Silicon Valley’s younger sibling. Is there a sense internationally that LA/Southern California is becoming a major tech market?
Spencer Crawley: Absolutely. Los Angeles is becoming a recognized tech hub across the globe, and our London-based seed fund, firstminute capital, is here to deploy capital in the most promising new LA startups. Previously, international venture capitalists like us would only have gone to Silicon Valley on U.S. trips, but LA is now a must-visit destination. The Snap IPO really helped change attitudes and has forced people to take LA seriously as a tech city. The emergence of Silicon Beach as a concentrated hub for innovation has also helped to overcome LA’s sprawling geography. Physical co-location is so important for tech hubs to thrive, as we now see in a series of buzzing European cities that we actively cover, like Helsinki, Stockholm, Paris, Barcelona, Berlin and Zurich.
Previously, international venture capitalists like us would only have gone to Silicon Valley on U.S. trips, but LA is now a must-visit destination.”
I know you're looking at tech companies all over the U.S., but what about Southern California piques your interest?
Tommy Stadlen: As the city that generates so much of the popular zeitgeist — globally — LA is fast becoming the place where technology intersects with culture. Whether that's social with Snap, music with Beats — which became Apple Music — or direct-to-consumer with Dollar Shave Club. And, of course, the city is so well positioned to transform the world of entertainment with technology.
What do you expect from the market moving forward?
Crawley: Recent success stories, such as the aforementioned Snap IPO or Ring’s acquisition, will have a positive impact on the ecosystem. Very tangibly, it creates a whole new set of executives who have money to invest in startups as angel investors and smart advisers. More intangibly, it provides inspiration for local entrepreneurs that they can build a global tech business right here in the city. You don't have to go to Silicon Valley to live that dream like you used to. This network effect will have an exponential effect on the market.
What was the reaction to the Brexit vote within the U.K. tech community?
Stadlen: Brexit was a serious error. There’s no doubt it will make life harder for tech founders logistically, and the dream of a single European digital market seems further away than ever. That being said, people are rolling their sleeves up and moving on. London’s defining characteristic is resilience. It has been a leading global city since the 17th century, overcoming fire, war and occasionally erratic political leadership to foster innovation, culture and entrepreneurialism. I still think London and the U.K. can thrive on the international stage in technology and beyond. Entrepreneurs are inherently optimistic about the future, and, ultimately, the vote has forced the community to come together to think long and hard about how to defend our position as a tech capital.
Crawley: Initially, many feared that Brexit would cause a slowdown in funding to emerging British companies, but so far, that hasn’t been the case. The number of investments and the amount raised has actually been higher after the Brexit vote than before, at more than $1 billion per quarter post-Brexit, versus $819 million pre-Brexit. That said, as Brexit raises questions about the U.K., we're interested to work more with new geographies, such as Silicon Beach.
