Playa Vista-based Unicorn Venture Partners, a new startup venture capital firm headed by a triumvirate of investors, including the son of a Texas billionaire, has begun investing in a handful of local startups as it gears up for a major capital raise.
The firm, which has already raised approximately $25 million from its three founding partners since its formation in August, is targeting an additional $25 million raise by the end of September.
Unicorn backs seed and early stage funding rounds in technology and consumer-focused startups, the investors said in a meeting with the Business Journal at the headquarters of eSalon, an El Segundo-based company and one of Unicorn’s first investments.
The founders of Unicorn are Phillip Sarofim, the 32-year-old son of Texas billionaire and fund manager Fayez Sarofim; Jonathan Hung, a 36-year-old wealth manager formerly with investment banks Morgan Stanley and UBS in New York City; and 40-year-old David Lin, formerly a chief financial officer of both Culver City-based Maker Studios Inc. and TicketMob in Sawtelle. Both those firms have had successful exits, with Walt Disney Co. purchasing Maker for $975 million in 2014, and hospitality management software firm Cvent Inc. acquiring TicketMob in 2013.
Unicorn invested an undisclosed amount of capital in eSalon, which generates in excess of $30 million in revenue annually through the sale of hair products that are custom made at its El Segundo warehouse. Other seed investments include Santa Monica-based HomeLister, a technology-powered online real estate brokerage, and San Francisco-based Coinbase Inc., a digital currency exchange used to buy, sell and store cryptocurrencies such as Bitcoin. It also has invested in San Francisco-based e-scooter and bike rental startup Neutron Holdings Inc., which does business as Lime.
Unicorn’s investments have ranged in size from a few hundred thousand dollars to a few million.
“That’s our sweet spot,” Lin said.
The chance of venture capital firms hitting a home run with their investments is slim — but a successful venture can reap millions.
“Once the money is raised, the success rate is 8.65 percent,” said Len Lanzi, executive director of the Los Angeles Venture Association, who estimated that there are some 200 venture firms in Los Angeles County.
When early stage investments do hit, they hit big. Marina del Rey-based Dollar Shave Club Inc., which delivers razors and other personal grooming products to customers by mail, sold to Unilever for $1 billion in July 2016. Ring, a startup that specializes in camera-equipped doorbells for homes, was acquired by Amazon.com Inc. for $1 billion a year ago.
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