L.A. is getting a star turn, with the most iconic of its local startups — Snap — on the cusp of going public. Locals expect much more than an endless string of headlines about its IPO performance, too. “The initial performance of the stock will be almost irrelevant,” says Paul Bricault, cofounder of the L.A.-based accelerator and seed-stage venture fund Amplify. “The IPO will shine a bigger spotlight on L.A. tech, and it will likely spin out more Snap execs as founders of new startups over time — as well as likely inject more capital into angel funding of startups in L.A.”
Bricault has reason for optimism. Five-year-old Amplify just closed its third fund with $10 million, and it could use new, promising startups to fund, as well as more capital sloshing around L.A. for follow-on funding. Investing $12.6 million across its first two funds, Amplify has already invested in 50 startups. Fourteen have raised a Series A round, five have raised a Series B round, and ten have subsequently been shut down.
Amplify has nurtured almost all of them at its campus in Venice, Ca., where companies of various, early stages stay for five months on average and are given opportunities to meet with investors for whom they would seem to be a fit. (Rather than stage demo days, Amplify invites investors to its offices four times a year for pre-arranged one-on-one meetings with its portfolio companies.)
On average, the firm, led by Bricault (who is also a venture partner with Greycroft Partners), takes a 10 percent stake in each company in exchange for mentorship, introductions, and initial checks of between $100,000 and $250,000.
Bricault says a proliferation of seed-stage funds is already helping Amplify’s companies attract funding in their “post accelerator round,” but that L.A. is still falling short when it comes to Series A, B, and later rounds. March Capital Partners has sprung up to address the gap in part (the firm closed its debut fund with $240 million last year). Mucker Capital, which also runs a lab called MuckerLabs accelerator, closed a $45 million last year, which also helps. But there’s “still a paucity of Series A and B capital resident in L.A.” says Bricault.
He says it’s been “balanced by a larger influx of external venture dollars coming into the L.A. market,” including not only from the Bay Area but increasingly from China. Of course, he suggests, it’d be nice if more of that capital were local. Now, with Snap’s IPO, maybe it will be soon.
Amplify’s biggest exits to date include the mapping visualization startup MapSense, sold last year to Apple for $30 million. (Amplify was its first investor.)
Three of Amplify’s portfolio companies have also closed Series B rounds in the last year, including the on-demand storage services startup Clutter. It raised a $20 million round, led by Sequoia Capital. Another company, the wine club Winc, raised $17.5 million in funding co-led by the Beijing-based firm Shining Capital and earlier backer Bessemer Venture Partners. The Bouqs, an cut-to-order flower delivery company, meanwhile raised $12 million in Series B funding from earlier backers, including Azure Capital Partners.
Two of Amplify’s newest investments include Ledge, a community lending platform, and SafeRide Health, an online platform that increase access to healthcare by delivering medically trained transportation.