Both LA VC deal count and value have moved into record territory in 2020 with increases in deal size after a slow start to the year.
Despite the challenges faced as a result of the pandemic, LA startup activity was remarkably resilient. By the end of 2020, the venture capital industry deployed $4.3B in LA-based startups, the highest total on record, driven by strong activity across all stages. 2020 funding figures surpassed the $3B mark in 2019, representing a 40% growth year-over-year. Quarterly funding levels in Q1 and Q2 fell short of 2019 levels as the world went into lockdown, but Q3 and Q4 were extremely strong; both up 90+% from the previous year.
Los Angeles-based companies have fared well in the public markets. GoodRx debuted on the Nasdaq in September and Canoo went public via a SPAC in December. Recent venture-backed SNAP was up 202% for the year. 299 companies were able to raise funding in LA in 2020, an increase of 19% from 2019. There were 6 mega ($100M) funding rounds in the city, an increase of 145% from 2019. These mega deals represent $1.6B or 39% of all capital raised.
2020 was a breakout year with resilient strength in the venture market serving as a foundation. Let’s take a deeper dive:
Los Angeles Venture Capital activity in 2020 hit a record level in terms of both investment amount and number of deals.
Average and median deal sizes for LA startups continue to increase with profound growth in 2020 as investors doubled down on portfolio companies and proven opportunities.
Median deal sizes across all rounds continue to increase with rapid growth at the earliest and latest stages. The number of companies that are able to successfully scale to subsequent founding rounds continues to increase in LA.
The number of mega-rounds ($100M+) stayed the same in 2020 but these six deals represented 39% of all LA startup funding for the year.
A look at all the numbers year-over-year.
Notes:
- Only equity financings were included.
- This analysis, unlike others, in order to maintain a focus on tech-enabled startups does not include biotech startups, lending institutions, and real-estate transactions where capital requirements are significantly different.
- Early-stage rounds consist of rounds classified as pre-seed, seed, angel, and convertible note fundings <$10M.
- Late-stage rounds consist of rounds classified as Series C and any subsequent rounds. Unclassified venture rounds over $25M are included in late-stage.
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