Two big deals in the Los Angeles area helped buoy the amount of venture capital invested into U.S. companies in the third quarter, according to a report released by Dow Jones last week.
Elon Musk’s Space Exploration Technologies Corp. (SpaceX) in Hawthorne and ad tech firm System1 in Venice were two of the top four deals identified in the report, which had a national focus.
Both deals were made by private equity firms crossing into VC territory.
Hawthorne-based SpaceX raised $350 million in late July from undisclosed investors and System1 took in $270 million from Court Square Capital Partners.
SpaceX’s haul valued the company at $21.2 billion, according to Equidate, a marketplace where private company stocks can trade. Court Square, a New York-based private equity shop, got a controlling interest in System1 for its $270 million investment, according to the ad tech company’s executives.
A total of 62 Los Angeles-area companies combined for about $1.1 billion in venture capital investment during the third quarter, according to Dow Jones, a 20 percent jump from the region’s second quarter tally of $896 million. Other notable VC deals from the third quarter included Hyperloop One Inc.’s $85 million Series B round, which closed in September.
L.A.’s strong quarter was part of a broader trend, as venture investment into companies was up nationwide. Dow Jones said 1,043 U.S. companies raised a total of $18.7 billion in the third quarter, up 6 percent from the second quarter.
The amount invested was the biggest since the fourth quarter of 2015, the report said.
The third quarter saw an easing of fundraising for VC firms, though, with a total of some $9.6 billion compared with $14.1 billion in the prior quarter.
Insight Venture Partners in New York closed a $3.6 billion fund to lead the way, with a smattering of Silicon Valley firms rounding out the top five.
Farm Fund Grows
A Santa-Monica based agricultural technology investment firm backed by some of L.A.’s wealthiest individuals closed its second funding round last week with $105 million in commitments.
Pontifax AgTech Management said the round’s investors included Stewart Resnick, chief executive of West L.A.-based Wonderful Co. and his wife, Lynda, who were No. 10 on the Business Journal’s 2017 Wealthiest List with his wife; Haim Saban, chief executive of Saban Capital Group Inc. in Century City and No. 14 on the list; and Antony Ressler, chief executive of Ares Management, and the 33rd wealthiest Angeleno.
Pontifax was founded in 2014 by Phil Erlanger and Ben Belldegrun and closed an initial $30 million round for its private equity fund in March 2016. Belldegrun is the son of Santa Monica-based Kite Pharma Inc. founder and Chief Executive Arie Belldegrun, who stands to make about $600 million off the sale of his company to Gilead Sciences Inc. in Foster City.
Pontifax also had a big exit last month, after portfolio company Blue River Technology sold for $305 million to John Deere tractor maker Deere & Co. The private equity firm didn’t disclose the value of their stake in Blue River, but led a $17.5 million Series B funding round in Dec. 2015.
Have a deal tip? Henry Meier can be reached at [email protected] or (323) 556-8321.
