The first quarter of 2014 was quite good to the LA tech ecosystem. In total, $324 million was raised by 59 companies, putting local companies on track this year to top the record set in 2013 for total amount raised.
Over $975 million came from exits in Q1 and 21 companies were acquired, a number nearly reaching the number of acquisitions made in 2013 as a whole (25 acquisitions).
LA multi-channel networks had an especially good quarter. Maker Studios led the way with its massive $500 million sale to Disney. A deal which, based on Maker’s future performance, could have a total upside of $950 million. What's more, Machinima received $18 million in March via a deal led by Warner Brothers.
These MCN acquisitions and investments represent Hollywood taking an increasingly serious stake in web talent, especially media brands built on YouTube, and the possible beginning of a shake-up for Hollywood studios. It is not likely Hollywood studios will keep such brands and audiences on the YouTube platform wholly or indefinitely - especially with YouTube’s 45 percent take of advertising revenue. With video distribution technology now much more available and alternative means to spread viral videos Hollywood studios could in time try to take their new creators and audiences to proprietary platforms.
If these recent MCN acquisitions bleed YouTube of its talent in any significant way, look for the platform to invest in an MCN or other original content - a scenario that could end up well for Los Angeles all over again.
Several notable deals in LA last quarter also tying into content include Gravity, a content personalization company sold to AOL for $90.7 million, and Zefr, a software platform for brand and content management on YouTube which raised $30 million.
Mobile messaging apps in LA played their part in total funding too such as TigerText, a secure mobile messaging platform used to protect patient privacy, raising $21 million and Whisper, an anonymous secret sharing platform, raising $30 million.
True to form, LA companies enjoyed celebrity-funded investments last quarter, including Tapiture, a social ecommerce site which was partially funded by Hilary Swank, and Beats Music, an online streaming music service which raised $60 million from backers like Dr. Dre.
In the future:
Beyond this first quarter, look for investments from TYLT Lab, a new venture capital firm now fully stocked with a $20 million fund and Amplify LA, a startup accelerator with a fresh $8.1 million fund.
To start off Q2 on the right foot, The Rubicon Project, a company that automates the buying and selling of advertising, started trading on the New York Stock Exchange, and now has a market capitalization of $235 million. Also falling right outside of Q1 is MCN AwesomenessTV's (owned by Dreamworks) acquisition of Big Frame for $15 million. On the horizon for this quarter is TrueCar’s IPO. The company recently filed to raise $125 million.
[ibimage==31159==Original==none==self==null]
