Los Angeles seems to be becoming the hub for early-stage startups. Valuations are incredibly key to the success, especially pre-money ones which – in the first half of 2021 – increased 116%. While most US states saw substantial increases, the real jump was most significant in LA.
According to Kyle Stanford, Pitchbook Senior VC Analyst:
“Especially within hubs, such as L.A., competition for deals has grown considerably in recent years, with the flood of new investors and more capital looking to invest in startups. Los Angeles has, on its own, seen strong fundraising numbers, bringing more local capital to the ecosystem, expanding opportunities for the area’s companies.”
Two examples of this are JOON and LA Tango. In July, the former raised a $2.3m seed and in August LA Tango raised $5.7m seed round. Today, there are approximately 5,000 startups in LA, many of which are in their early stages.