The flow of venture capital dollars into L.A.-area companies fell to $3.49 billion last year, off more than 16 percent from the year-earlier high of $4.17 billion, according to a report by Dow Jones Venture Source.
That funding decline, however, was smaller than the nationwide drop in venture capital investment, which fell to $52.4 billion last year, 32 percent below 2015’s $77.3 billion.
“The numbers are pretty consistent with 2013 and 2014; 2015 was a spike year,” said Jamie Montgomery, managing director of Santa Monica venture firm March Capital Partners. “The spike was driven by a large number of unicorns nationally. There were 46 new unicorns in 2015 versus 16 new unicorns in 2016.”
Despite lower numbers, the L.A. venture market appears to be healthy, he noted.
In particular, Los Angeles appears poised to birth and nourish enterprise software firms in the coming years, said Montgomery, noting a large number of engineers graduate from local institutions, such as USC, UCLA, Caltech, and Harvey Mudd.
“I think we will see more Series A and Series B investments in the enterprise IT space,” he said, adding that notable local enterprise software companies include cybersecurity firm Signal Sciences of Venice, marketing software firm Retention Science of Santa Monica, and user authentication firm TeleSign of Marina del Rey.
Beyond increased enterprise software investments, the largest and most impactful financing event this year is likely to be the anticipated $25 billion initial public offering of Snap Inc., parent of Snapchat.
“That’s going to return a lot of capital locally and that will skew these numbers in Southern California,” he said.
Some 36 million unique users visit Ranker.com every month to cast their vote on everything from best movies to best speeches in presidential history. While viewing the results of user votes is entertaining for website visitors, it’s also something that movie and TV studios, and music labels are willing to pay for.
By tracking the votes of users to its website, Ranker is able to cross-correlate what those users, and users with a similar demographic background, might be interested in. The Miracle Mile company launched a product in November called Ranker Insights, which allows third parties to purchase that information.
“We can correlate (that) people who like X also like Z,” said Glenn Walker, Ranker’s chief operating officer.
One client, Universal Music, used Ranker’s findings to more cheaply market Frank Sinatra’s music to fans of fellow Rat Pack member Sammy Davis Jr., said Walker.
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