And although the pandemic has disrupted the economy, it appears to have had a limited downside for the fortunes of the tech titans featured in this year’s Wealthiest Angelenos list. Some even recorded gains in their net worth.
Among those who’ve benefited from a coronavirus-driven pullback by consumers in the physical world is Travis Kalanick. Since November, the co-founder and former chief executive of San Francisco-based Uber Technologies Inc. has reportedly been buying inexpensive properties across the United States, India, China and Britain through his startup CloudKitchens.
The company, which is based in Pico-Union, converts commercial real estate space into leasable ghost kitchens, which provide facilities for delivery-only restaurants.
CloudKitchens does not disclose revenues, but the industry has seen a boost as lockdowns drove up demand for food delivery.
The startup reportedly secured a $400 million investment that valued it at $5 billion in November, boosting Kalanick’s investment portfolio value significantly.
Kalanick also has plenty of capital in his own right. He reportedly earned about $2.5 billion when he cashed in his Uber shares as he left the company’s board in December.
Social media gains
Another local business that has seen a lift during the Covid-19 lockdown is Santa Monica-based social media company Snap Inc.
Snap’s co-founders and biggest shareholders, Evan Spiegel and Bobby Murphy, saw increases of 8% and 16%, respectively, in their net worth over the past 12 months as the company’s stock rose.
User engagement has increased for the Snapchat app during the pandemic, which has boosted investor confidence in the company’s ability to monetize despite a short-term drop in ad revenue.
Snap, along with other U.S. social media companies, also benefited from the tension between the White House and TikTok, the wildly popular short-form video platform owned by Beijing-based ByteDance Ltd.
Snap’s stock price soared to $26 on July 8 — the highest point since the company’s initial public offering — after reports that the Trump administration was considering a ban on TikTok.
While nourishing homegrown companies, Los Angeles has also drawn tech titans from Silicon Valley.
Sean Parker, whose wealth stemmed from his investments in Facebook Inc. and Spotify, took root in L.A. when he bought a $55 million Holmby Hills mansion from Ellen DeGeneres in 2014.
Parker’s wealth saw 10% growth in the past year, driven by his investment in tech companies including Redwood City-based data analytical platform RevUp Software Inc., U.K.-based messaging company Emoticast and New York-based infant nutrition startup ByHeart Inc.
Peter Thiel, who co-founded PayPal, moved to Los Angeles from Silicon Valley in 2018. He made an early investment in LinkedIn Corp., Yelp Inc. and Hawthorne-based Space Exploration Technologies Corp. In 2003, Thiel co-founded data analytics firm Palantir Technologies, which is expected to unveil its initial public offering in September.
Growing rapidly
Tech creates about 3% of all jobs in Los Angeles, compared to 10.5% in San Francisco and 7.7% in Seattle, according to a July report by commercial real estate firm CBRE Group Inc.
“Tech is still relatively new in L.A.,” said Christopher Thornberg, founding partner of Beacon Economics. “It has been growing rapidly, but it is still not a big part of the economy.”
But with more than 140,000 tech workers, Los Angeles has one of the largest tech labor pools on the West Coast, and the city is fueled by a vibrant startup community and local expansion by big players including Google, Apple Inc., and Netflix Inc.
“(Tech companies) are coming here also because they’re attracted to the existence of the entertainment center,” Thornberg said.
There could be more tech names on the Wealthiest Angelenos list in the future.
George Ruan and Ryan Hudson, for example, received about $900 million and $575 million, respectively, following the $4 billion sale of downtown-based online coupon company Honey Science in January.
Activision Blizzard Inc. Chief Executive Robert Kotick could see another big paycheck in 2020 as the gaming company thrives during Covid-19. Kotick’s salary, combined with stock and option awards as well as other compensations, exceeded $30 million in 2019.
The success of tech companies in L.A. is a signal to investors and entrepreneurs about the strong return on investment in the area, according to Lawren Markle, senior director of communications at the Los Angeles County Economic Development Corp.
“When tech companies thrive in L.A. and founding teams earn a big return, often a portion of the capital will be redeployed to start more new businesses in L.A., creating good jobs.” Markle said.
