Los Angeles digital tech companies had another record-breaking year in 2014, raising a total of $3.04 billion in investments and exiting for more than $5.9 billion. The year was fueled by several large events including Snapchat’s $486 million fundraising round and Maker Studio’s $500 million sale to Disney. In fact, 2014 investment totals were 188 percent higher than 2013 levels and acquisition totals were 430 percent higher than 2013 levels. In 2014, over 250 digital tech companies received funding and over 80 companies were sold.
As Venture capitalists and investors continue to pour money into startups, we've rounded up some of the big players in LA who are already in the billion dollar valuation club.
Los Angeles’ most well known startup is Snapchat, and hours before 2014 ended the disappearing messaging and social media app company reminded the world why. On December 31st, Snapchat declared that it had raised $486 million in 2014; by far the largest fund raising round in 2014, and reportedly the 10th largest raise in US history. It is rumored that the company is valued at $10 billion. Not content with big investments and valuations, Snapchat launched paid advertising this fall.
Valuation: $10 billion + (reportedly)
After a $70 million Series C round in 2014, The Honest Company has now raised $122 million in total and employs more than 275 people. In 2014 the company had a projected annual revenue run rate of more than $150 million — three times more revenue than 2013 according to CEO Lee. The eco-friendly, baby-safe online retailer is well known for its co-founder, actress Jessica Alba. Around 80 percent of the company’s revenue comes from online subscriptions that deliver monthly packages of goods like diapers and wipes or cleaning supplies. Though 80 percent of the company’s sales take place online the company has also expanded to several physical locations including Target and Whole Foods.
Valuation: Just shy of $1 billion (reportedly)
Since its founding, users of the dating service now swipe through an average of 1.2 billion profiles and make more than 15 million matches each day. After San Francisco venture firm Benchmark Capital took equity in Tinder, the first outside stake in the dating app, many speculate the company is worth $1 billion. Bloomberg once reported the company was worth $5 billion, but it is likely worth far less than that, yet still in the billions.
Valuation: Several billion dollars (speculative)
Car-shopping website TrueCar is injecting price transparency into the frustrating car buying process. Drivers have purchased millions of vehicles since TrueCar’s founding in 2005 and in 2013, they reported sales around 400,000 cars. The company filed for an initial public offering in April 2014 for $125 million. Despite a lower than expected offering price ($9 per share) the price has more than doubled since then, and the company's market cap is about $1.52 billion.
Valuation: $1.52 billion
Though it is not as flashy as consumer facing Snapchat, the company annually sponsors a large Los Angeles focused tech conference, the LA Tech Summit, employs several hundred people and is publically traded on the NASDAQ with a market cap of $1.76 billion. Last year the company took on a $220 million debt round for international expansion and launched the “Cornerstone Innovation Fund,” an investment arm. The Cornerstone Innovation Fund provides seed funding of between $250,000 to $1 million, acceleration and incubation resources to startups of strategic importance to Cornerstone.
Valuation: $1.76 billion
The IT healthcare company, Nanthealth, was founded by healthcare entrepreneur and billionaire Dr. Patrick Soon-Shiong and has raised several large investments, totaling $410 million. NantHealth has put much of its efforts into a healthcare IT system, called the NantHealth Clinical Operating System platform. The IT platform tracks multiple patient health inputs and helps doctors determine the most effective treatment options based on analysis from big data. Despite being an extremely well funded startup, NanthHealth isn’t well known within the Los Angeles tech community; perhaps because much of its funding comes from non-typical tech investors, like the Kuwait Investment Authority and pharmaceutical company Celgene.
Valuation: Several billion dollars (speculative)
Newegg
Newegg is an e-commerce giant. The City of Industry tech company focuses on selling electronics mainly, has 2,600 employees, and in 2014, Forbes reported Newegg had annual revenue of $2.7 billion. In terms of valuation and employee count Newegg is one of Southern California's biggest tech companies.
Valuation: Several billion dollars (speculative)
JustFab, an online fashion retailer based in El Segundo raised an $85 million Series D round in 2014, which values the company at $1 billion and brings total funds raised since launch to $250 million. The company sells women’s shoes, handbags, jewelry and jeans via monthly subscriptions. 90 percent of JustFab’s revenue comes from its subscription services and Co-CEO Adam Goldenberg told the Wall Street Journal that the company is on track to do $400 million in revenue in 2014 and $500 million in 2015.
Valuation: $1 billion
