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Amazon’s Acquisition Of Ring Is LA Tech’s Third-Biggest VC-Backed Exit
Snap's IPO still reigns as the top exit for LA tech startups, as Ring adds to the list of $1B+ exits from the LA metro area.
Earlier this week, Amazon announced that it would acquire Santa Monica-based video doorbell company Ring. At $1.8B, this would be the tech giant’s second-largest acquisition, after its $13.7B acquisition of Whole Foods in June 2017.
The deal also marks the third-largest exit for an LA metro area-based tech startup since 2009.
Ring, which was rejected by judges on business reality show Shark Tank in 2013, went on to raise $183.7M in equity funding in less than 6 years. The company’s cohort of investors includes high-profile angel, VC, and corporate venture names like Richard Branson, Goldman Sachs, Qualcomm Ventures, Upfront Ventures, and Kleiner Perkins Caufield & Byers, among others.
The largest LA exit of all time went to Snap: the mobile social media company went public for $3.4B in March 2017, earning a valuation of nearly $25B. Facebook’s $2B acquisition of VR headset maker Oculus VR in 2014 ranks second.And our headline story from July 2016:
Notably, all three of the biggest LA tech exits — Snap, Oculus VR, and Ring — offer some sort of consumer-focused video product.
Compared to NYC, LA has historically lagged in overall exits, though the city has had some notable big winners. The trend continues with Ring, which is the eighth $1B+ exit of a VC-backed tech company from the LA metro area since 2011. While LA’s biggest exits span a range of industries, a majority of the top 10 startups focus either on consumer products or media & entertainment solutions.
Using the CB Insights database, we compiled the ten largest exits of LA-based VC-backed tech startups since 2009. Check it out:...MORE
From Epic Magazine:
Silicon Is Just Sand
August 29, 2015, is a hot night on Venice Beach. Normally the superheated inland desert sucks the damp air off the ocean, blanketing the coast with a layer of moisture all the way to the 405. But tonight, something has gone wrong. There’s no fog, and the sky is boiling, even at 2 am.
A dark SUV pulls in front of the Cadillac Hotel, a two-star lodging better known for its cheap rooms and stained carpets than its views of the ocean. The car’s lights wash over a homeless man sitting on the sidewalk. The homeless live all over Venice Beach and have for as long as anyone can remember, particularly at the northern end of the boardwalk on the edge of Santa Monica. Their tents line the small grassy hills between the sidewalk and sand. Stuffed sleeping bags, shopping carts, signs and bedding made from cardboard. You almost wouldn’t know how much this place has changed recently.
The SUV’s lights stay on, illuminating the scene as Sris Sinnathamby, the owner of the Cadillac Hotel, steps out of the passenger side. He’s followed by the driver, identified by multiple witnesses as Francisco Cardenaz Guzman. Guzman is known to the police as a member of the Venice 13, a gang with ties to the Sureños, who control the local drug trade. He has been arrested many times, for gun possession, robberies, and car theft.
Sinnathamby and the man identified as Guzman have just returned from the James’ Beach bar, a five-minute drive down the street. Sinnathamby walks up to the homeless man and tells him to get away from the front of the hotel. A security camera at a nearby café records the scene.
Sinnathamby is not like Guzman. He was born in Sri Lanka and came to the US in his twenties. According to the LA Weekly, he happened to be passing through Venice 25 years ago when he ran out of money. He took a job cleaning hotel rooms at the Cadillac, then worked his way up to manager. When the owner retired, Sinnathamby bought the place from him. It’s not fancy, but it faces the ocean, and pretty or not, it has dramatically risen in value in the past decade.
The run-up in real estate prices has been driven in part by the explosion of tech companies along the beach on the west side of Los Angeles. Google, Snapchat, Hulu, BuzzFeed, YouTube, Netflix, and Facebook have overtaken an archipelago of properties, bringing an influx of programmers, sales executives, and the refined retail that follows such massive migrations of well-paid people. They call it Silicon Beach.
The homeless don’t necessarily mind the newcomers, but the newcomers mind the homeless. Sinnathamby is not one of the newcomers, but they have been very good for his business interests. In addition to the Cadillac, Sinnathamby owns the gourmet eatery Dudley Market, a parking lot on Ocean Front Walk, and other Venice properties. Sinnathamby again tells the homeless guy to get moving. The man rises and shuffles toward the boardwalk, 20 feet away.
The beach used to belong to the people. Now it’s illegal to be here from midnight to 5 am. In fact, a 2012 law designated the boardwalk part of the beach, making it illegal to sleep on the boardwalk as well. The justification was public safety. Homeless advocates have filed lawsuits challenging the ordinance. In the meantime the homeless feel harassed, people always kicking their feet, telling them to move. Venice is a place with a long history of art and activism and, now, a flood of wealth. Tempers run high on all sides.
Sinnathamby’s efforts to move the homeless man attract the attention of a group of nearby boardwalk denizens. “Leave him alone,” says Shakespeare, a 26-year-old rapper and poet who frequently sleeps on the boardwalk near the Cadillac. Sinnathamby walks over to him, passing a man pushing a cart, who exchanges greetings with Sinnathamby. Everyone knows each other.
The homeless have been drinking. They had a party earlier on Hippie Hill, a mound of grass nearby, to celebrate Shakespeare finishing a new recording. Maybe it’s the booze. Maybe it’s the heat. Or maybe it’s the money. Rising property values have unpredictable effects on community relations.
Shakespeare argues with Sinnathamby, insisting the man has a right to stay on the sidewalk. But then Guzman, who has so far hung back on the boardwalk by himself, suddenly pulls out a gun and fires four shots down the beach. Shakespeare gets even more agitated, gesturing toward Guzman as if to challenge him. Sinnathamby stands between the two men, keeping them apart. Guzman waves his gun in a threatening manner.HT: Longform
Two women, friends of Sinnathamby who were waiting in the SUV, now get out and walk over to him. He turns to the women, and as he does Shakespeare shifts to his right. Guzman notices Shakespeare making his way around the women, and Shakespeare uses the moment to lunge at Guzman. Guzman shoots him three times, stepping aside like a bullfighter as Shakespeare falls past him, exiting the frame of the surveillance video. Guzman waits for a moment, then gestures for the women and Sinnathamby to come with him. But they stay. Finally Guzman runs to the SUV and drives away. At least that’s how it all appears on the video.
The ocean is as calm as a sheet of paper.
Nine days later, I arrive in Venice. I move into a small two-bedroom with a roommate on Pacific and Breeze, one block from the beach, four blocks from the Cadillac. It’s ferociously hot, and like most places this close to the ocean, this one has no air-conditioning. I have a small carry-on bag with me, a pair of jeans, two T-shirts, a pair of shorts. No return ticket.On the boardwalk near my apartment, some people and local community organizations have erected a memorial for Shakespeare at the base of one of the boardwalk’s pagodas—the usual candles and flowers, a pink bow, a poster signed by his friends, a framed picture of Shakespeare in a tan jacket, a stuffed panda bear. A group of homeless men and women lounge in the pagoda, one of only a handful of slivers of shade.
I’ve been sent here to figure out why Google has moved into so many buildings in the area, why there are so many accelerators and shiny new office-sharing facilities. Snapchat chose Venice over Silicon Valley and is now valued at $20 billion, with more than 800 employees. What is happening here?
That’s my assignment....MORE