When people think of the tech industry in Los Angeles, such places as Playa Vista, Santa Monica and Culver City come to mind. But there’s another area that’s fighting for its share: Glendale.
The city has become a hub for tech companies in recent years. After all, it offers lower rents, a desirable area for families to live, an annual tech startup convention and a steadily growing tech business presence in the area.
The city is now home to more than 1,500 tech companies, a 15% increase since 2016, according to the city.
Roughly 200,000 people live in Glendale, but, according to its Economic Development division, about 40,000 tech workers fill its office buildings and parking lots each day. Several giants in the industry are rooted there, including ServiceTitan and DreamWorks Animation.
The development of Glendale as a tech hub didn’t happen overnight, and certainly didn’t happen without the city realizing it. About five years ago, city officials first began to take note of the companies that had moved in and decided to focus on marketing itself to the industry as a desirable location to set up offices. It established the Glendale Tech Strategy in 2017, a four-pronged plan to court and encourage growth in its tech business community. This plan included city-sponsored Tech on Tap network events and its annual Glendale Tech Week, which will take place in September of this year.
“The city (realized) it can better market itself as a tech hub and that we could encourage more collaboration between organizations and companies,” Soua Vang, Glendale’s deputy director of Economic Development, said. “We put several initiatives and programs into play to help grow the tech sector and, I must say, it’s certainly working.
Ara Mahdessian, chief executive officer and co-founder of ServiceTitan, said he sees Glendale as “the center of the universe.” He has a personal connection to the city, as his own family is rooted there, but also pointed out its proximity to Burbank Airport and the city’s investment in companies like ServiceTitan. He said that when ServiceTitan began to really take off in 2015, many people in the tech community thought it would move operations to the westside or even up to Silicon Valley.
“Moving our headquarters out of Glendale never really crossed our minds,” Mahdessian said.
Other prominent tech companies based in Glendale include LegalZoom, Age of Learning, Britive and Phonexa.
Those companies are likely getting a better deal on office rents than they would on the Westside.
Santa Monica houses tech giants such as Snap Inc., GoodRx and Naughty Dog but it also charges those companies almost twice as much in rent as they could find in Glendale. According to Jones Lang LaSalle Inc., asking rent for class A office spaces in Glendale averaged $3.25 a square foot in the first quarter. By contrast, asking rents on the Westside averaged $5.59 a square foot. In Santa Monica, asking rents averaged a whopping $6.30 a square foot.
“Obviously, office space in Glendale is a lot more affordable than what you’ll find in other parts of Los Angeles,” Mahdessian said. “But more than that, we’ve found that Glendale is a very attractive destination for our employees with young families looking to get out of the city. We’ve actually seen over 100 of our employees and their families move to Glendale from Northern California and even out of state.”
Armenian community presence
Glendale has historically had a large Armenian population, reportedly being home to the largest Armenian population outside of Armenia itself. Several large Glendale tech companies have leaders of Armenian descent at their helm, including ServiceTitan and marketing automation platform Phonexa.
Lilit Davtyan, Phonexa’s chief executive, that she’s excited to see so many tech companies led by fellow Armenians.
“Working in tech once felt unimaginable because, in the early- to mid-90s, my family and I had to live without electricity for long periods of time because Armenia was in an energy crisis,” Davtyan said.
“But over the last three-plus decades, so many talented Armenians have immigrated to Los Angeles and have made Glendale their home, me included,” she added.
Mahdessian and Vahe Kuzoyan, ServiceTitan’s president and co-founder, are also of Armenian descent. ServiceTitan has an office in Armenia, in addition to its Glendale headquarters.
“As proud Armenian Americans, both Vahe and I feel a strong connection to Glendale’s thriving Armenian community and we’re heavily invested in ensuring the local community is able to benefit from ServiceTitan’s success,” Mahdessian said. “The next great tech and startup hubs can be anywhere in the world, and I firmly believe both Armenia and Glendale could be the next two.”
Glendale has worked with the state to provide a $1 million fund for two tech accelerator programs: Hero House, a startup hub owned by venture capital firm SmartGateVC, and KidsX, an incubator for tech startups in the pediatric healthcare sphere. Armine Galstyan, managing director of Hero House, said that Glendale’s location in between major universities like USC, UCLA and CalTech is significant. Galstyan said that amazing research is being done at these institutions, but not many L.A.-based companies are taking those innovations to market.
“L.A. is just emerging and there hasn’t been one prominent force out there that came into these universities, built the technology transfer infrastructures and took things to market,” Galstyan said.
The city does reap economic benefits from its blossoming tech community, particularly from the influx of workers coming into the city and the population growth it has experienced.
“The tech industry is certainly one of our major industries, especially with the amount of employment (and) sales tax when you have talent working during the day,” Vang said. “They’re spending dollars (and) there’s other ripple effects and economic impacts with job creation.”
Galstyan said that Hero House was established after the city opened applications for incubators to use the state provided funds it had collected, which attracted about 20 applicants according to Vang. The city provided Hero House with $500,000 in funding, and SmartGateVC pays for the rest. Its first fund had 25 investors, and its second fund has raised $15 million. Galstyan said Glendale offers opportunities that tech-oriented cities like Silicon Valley may not, because it’s a new market and there are more innovative moves that can be made by a company or an accelerator program.
“It means there are gaps, I can hardly imagine a new incubator coming to Silicon Valley and building something that hasn’t been done before or isn’t being done right now,” Galstyan said. “In L.A., everything is open and it’s a free space.”