About $150 million already has been invested in L.A.-area broadband companies, according to industry estimates, but that’s only the beginning.
Brad Jones, general partner with Brentwood Venture Capital, one of the most active broadband investors in town, expects an additional $300 million to $500 million to be invested in local broadband companies over the next five years.
“Fifty to 75 percent of all venture capital invested in Los Angeles in the next couple of years will go to broadband companies,” said Ravin Agrawal, a principal with East/West Capital Associates. “There are fewer opportunities right now in traditional ‘dot-com’ Internet ventures, and broadband is happening sooner than many people expected.”
Besides East/West Capital and Brentwood Venture Capital, other firms actively investing in local broadband start-ups include Idealab Capital Partners, Media Technology Ventures, Enterprise Partners, Palomar Ventures and Yucaipa Cos.
One of the newest venture firms, West Los Angeles-based Media Networks.com LLC, is also targeting broadband, according to Managing Director Sandy Climan, a former talent agent at Creative Artists Agency. The 4-month-old firm has already closed its first $100 million fund, and will soon close its second, Climan said.
While much of L.A.’s broadband action is in content development, the local industry is broader-based than that. “L.A. has a lot of potential on the content side,” said Jones. “But our biggest investment in a local broadband company to date is in Multilink, which is an infrastructure/enabler company based in Santa Monica.”
To date, Brentwood Venture Capital has invested about $26 million in four local broadband companies.
East/West Capital has thus far invested about $20 million through various rounds of financing to local broadband companies, according to Agrawal. One of the main investments is in Quickband Networks of Hollywood, which acquires independent short films, music videos, and footage of live concerts and other events for broadband distribution.
But Agrawal notes that the focus extends beyond broadband content and entertainment. “There are many opportunities in broadband applications and services. The real potential of broadband is far more powerful than just providing entertainment,” he said.
