3 Startup Bets We’ve Made in LA
Why we’re doubling down on Silicon Beach
I’ve been spending more time in Los Angeles recently. Besides the fact that I lived in Southern California for six years to go to college and cut my teeth as a young consultant, I’m really drawn to how this ecosystem understands the nature of the global consumer. LA has always had a lot going for it. After all, this is the place where Disney got its start!
There’s a lot to like about the quickly growing ecosystem there. The city has in recent years become a dynamic hotbed of activity for entertainment, aerospace, and mobility startups. Snap and SpaceX, now iconic companies in tech, call LA home and attract high-quality engineering talent from around the world. Five of the top 50 universities in the world are located in Southern California, giving LA a built-in talent pipeline. Plus, startup dollars are stretched over a longer runway in LA, as the city hasn’t seen skyrocketing costs in areas like real estate that we’re all too familiar with in Silicon Valley.
We realize we’re not the first to note the vibrant ecosystem in LA. My friends Nick Kim and Brittney Walker from the Dorm Room Fund mafia have written at length about why the region is quickly becoming the next big place where startups are being built. At Floodgate, we’ve decided to make LA a more serious focus (particularly our senior partner Ann Miura-Ko). I’ve personally made five trips down to Southern California in the last two months to meet with active founders and angel investors. Over the last year, we’ve invested in three exciting new startups based in LA. I’d love to share more about them here, and why we invested in them.
TTYL is a consumer social company building products that are reinventing how people can connect with one another. When Ann met TTYL’s founder Alex, she was captivated by his core insight on how Airpods were a new exciting platform that would enable new types of experiences. They’re still early, but this is one of the most talented technical teams we’ve ever had the privilege to work with. I’m continually impressed by their pace of iteration. Plus, I’m very happy that they have the chance to build the company in LA — Alex grew up there and very intentionally wanted to move back to take advantage of what this growing ecosystem has to offer.
Replenysh is building a marketplace for recycled materials, starting with a platform that digitizes the completely analog trading activities that take place between hubs that aggregate recyclable material and mills that create products from these same materials. This is a trillion-dollar market that has genuine buy in from big brands. Ann was particularly interested in exploring this space after being prompted by her 10 year old son, who deeply cares about the environment (he used to cry when she put gas in her car!). When I met Mark, I found an authentic entrepreneur who is the textbook definition of founder-market fit. Mark’s been working in sustainable waste management for more than a decade and will continue working on building a circular economy in waste for decades more.
Emotive is building a text message engagement platform purpose built for customer success on the consumer level. I met Zach and Brian back when they were still students at USC and I was an investor at Dorm Room Fund. When I learned that Ann had re-engaged them, I literally ran into her office to rave about these guys. They hit 25% month-over-month growth and blew past a $100K monthly revenue run rate target in record speed. They’re the only team that we’ve ever tracked for a year that did better than they said they were going to do. When Ann and I started digging in more, we found that their customers love them and their team deeply cares about the shift from email to SMS. I can’t wait for them to scale this business.
The Floodgate team is really excited to do more in LA. If you’re a founder based in Southern California building something awesome or an investor / angel passionate about building a stronger startup community, please shoot us a note! You can reach me at shawn@floodgate.com.
