Remember when New York City was the most expensive city to live in? Most San Franciscans would give anything to return to those halcyon days. The City by the Bay has reaped the benefits from the torrid growth of the tech industry over the last 15 years, but, as any resident will tell you, it hasn’t come without cost. Literally. The rental rates and cost of housing in San Francisco are now perennially among the nation’s highest. The median rental rate? Nearly $4,500/month. When a guy is paying $500/month to live in a box, you know things have gotten out of control – that you’ve “jumped the shark” and that the rent is too damn high. And don’t even get a techie in San Francisco started on the price of commercial real estate.
1k+ startups were in operation in LA last year.
[tweetthis]1k+ startups were in operation in LA last year [/tweetthis]
So, while San Francisco will continue to be Shangri-La for startups, entrepreneurs and techies, many startup folks have had enough and are looking for greener (or at least cheaper) pastures. Luckily, mini Silicon Valleys have begun popping up in earnest over the past five or so years, and tech communities are thriving in cities like Portland, Seattle, Phoenix, Austin and Los Angeles.
All of these cities have a lot to offer, but only one of them has 80-degree days and the Pacific Ocean. That’s right, while Los Angeles has always been known as Tinseltown and home to Hollywood, it has also quietly become a booming tech hub. This, in and of itself, may not come as a surprise, given that LA is now dubbed “Silicon Beach,” but what may come as a surprise to many is just how much it’s booming and the growing list of billion-dollar companies that call Silicon Beach home.
According to CB Insights, not only has LA become an “increasingly nationally important tech hub,” but companies based in Silicon Beach were on track to break $4 billion in annual investment last year. That was in August. A report from NVCA as published in Inc. found that Los Angeles and Orange County saw $4.1 billion in deals in the third quarter alone. Both reports found significant increases in deals and funding in LA when compared to the year prior. This rapid growth spurred Venrock Capital Partner David Pakman to tell Inc. that “Los Angeles feels like New York four years ago.”
A growing list of billion-dollar companies call Silicon Beach home.
[tweetthis]A growing list of billion-dollar companies call Silicon Beach home[/tweetthis]
Of course, when we think of San Francisco, not only do we think of its startup community, we think of the juggernaut tech companies that have built enormous campuses in Silicon Valley – home to the Googles, Apples, Facebooks, Oracles and Ciscos of the world. While no city can quite hold a candle to the giants of Silicon Valley, CB Insights tells us that LA is no slouch. The city quadrupled the number of exits between 2010 and 2014 to 128, with IPOs, including Rubicon Project and TrueCar (both of which were more than $500 million). The trend continued last year, with a handful of sizable exits, including the $1.5 billion purchase of Lynda.com by LinkedIn and $420 million IPO by AppFolio.
In fact, over the last five years, LA has seen at least four “unicorn” exits (or exits valued at $1 billion or more), beginning with Demand Media’s $1.5 billion IPO in 2011 and followed by Oculus’ $2 billion-plus sale to Facebook in 2014, Lynda’s sale to LinkedIn last year and Dollar Shave Club this July.
Among Silicon Beach startups, SnapChat has been wont to grab most of the headlines, thanks to the ephemeral messaging company’s growing popularity and $16 billion valuation. But SnapChat is only one of more than 1,000 startups that were in operation in LA last year. The city also plays home to fast-growing companies like Soylent, JustFab and The Honest Company.
With that in mind, we’ve compiled a couple of lists below to highlight some of the noteworthy, exciting and successful (or soon to be successful) tech companies that can be found in or around Silicon Beach.
Some of the names you might recognize, some you may not, but either way, we’re willing to bet you didn’t know they could be found in the City of Angels. Adding to those of CB Insights and Inc., among others, our first list focuses exclusively on startups (or those that remain private companies), while the second is an abridged list of LA companies that have had notable, or successful exits.
Did you know these companies could be found in Silicon Beach?
Made In L.A., The Startup Version
Airbnb for dogs. Has raised $50 million.
Easy-to-mix meal substitutes loved by (some) techies.
On-demand subscription media service started by a consortium of media giants, including Disney and Comcast.
The (in)famous social, mobile dating app that brings out our basest side. Reportedly used by more than 50 million people and valued at more than $1.5 billion.
The Honest Company
Co-founded by Jessica Alba, The Honest Company creates sustainable, eco-friendly products for babies and homes. Has raised $225 million.
Online job board and search tool based in Santa Monica. Has raised more than $63 million.
Big data company trying to disrupt the underwriting process, giving underwriters a better sense of risk.
Video doorbell gadget. Founder went on Shark Tank in 2013 and was rejected, but went on to raise almost $40 million from Richard Branson, among others.
Entertainment company and network that helps online and mobile game developers advertise and monetize. Has raised nearly $100 million.
Online retailer and marketplace for organic, healthy foods, vitamins, home goods and beauty supplies. Has raised $150 million.
A company trying to make Elon Musk’s dream of the hyperloop come true.
Company wants to help you charge your electronic devices wirelessly, using sound waves. Raised $23 million.
Cybersecurity startup. Has raised $150 million.
Well-known aerospace manufacturer and space transport company founded by Elon Musk. Could well be taking us to Mars. Employs 5K+.
Online, women’s clothes retailer. Has raised $65 million.
Online platform that lets you broadcast in real-time.
Online aggregator of music, game TV, and movie reviews.
Made In L.A., The Post-Exit Version
Online price comparison and information tool for new and used cars. IPO in May 2014.
Virtual reality company that makes a head-mounted display gadget. Acquired by Facebook for $2 billion.
Dollar Shave Club
Monthly subscription service that sends subscribers affordable, quality razor blades. Acquired by Unilever in July 2016 for $1 billion.
Online learning platform that offers a diverse library of videos courses and lessons. Acquired by LinkedIn for $1.5 billion.
A content generation company, owner of properties like eHow and LIVESTRONG.com. $1.5 billion IPO in 2011.
Digital media company that helps podcasters produce content, connect with advertisers and monetize. Best known as producer of WTF With Mark Maron. Acquired by E.W. Scripps Company in 2015 for an undisclosed amount.