Seed stage companies in Los Angeles received a total of $369 million in funding last year, according to a report from Venice tech accelerator Amplify.LA.
Health and wellness was the most funded sector, with $76.7 million raised across 37 deals. Media and entertainment came in second, with $70.2 million in 36 deals.
Eric Pakravan, a senior associate at Amplify, said the strength of the health and wellness category was not expected going into 2016, but the category quickly picked up steam.
“You’ve seen tech tackle so many other industries, and health and wellness is an area people have been afraid to touch,” Pakravan said. “We’re seeing everything from health care devices to emotional wellness to vitamins, not just strictly medical or biotech companies.”
The report is Amplify’s first yearly examination of seed stage funding in Los Angeles. More than 250 unique investors participated in a total of 184 seed deals last year, Pakravan said. Of those investors, 40 percent were from Los Angeles.
“Ten years ago, that wouldn’t have been the case,” he said. “We are seeing more investment coming from within L.A. and that is good for companies.”
The third quarter had the most seed funding with about $100 million raised; the second quarter had the least with roughly $88 million.
The second and third quarters of the year had the most deals, with 49 announced in both periods. The fourth had the fewest with 32.
While the definition is somewhat loose, seed rounds are meant for early stage startups and rarely top $5 million. They also typically include money from high-net-worth individuals known as angel investors, whereas Series A and later rounds are often funded by institutional venture capital firms.
A notable deal in the health and wellness category included a $3.5 million round raised by women’s vitamin startup Ritual of West Hollywood, which was announced in October. The monthly subscription service, which has raised a reported total of $5 million, was launched in 2015 by Kat Schneider, a former venture partner at Troy Carter’s Atom Factory Inc. of Culver City. Santa Monica’s Upfront Ventures has also backed the company.
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