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2020 Year in Review for Southern California Tech

January 1, 2021

New unicorns, new funds, and new real estate priorities, but where are the mega exits?

2020 was a great year for the Dodgers. Image by Manfred Guttenberger from Pixabay.

Unicorn formation continued — but with caveats


Source: CB Insights

Local venture firms grew larger

For many years a common lament among local founders and investors has been that while there has probably been sufficient seed money available in Southern California, companies that were looking for larger fundraises needed to turn to Silicon Valley to find the capital. 2020 may be the year when that finally changed. In 2020, six local firms publicly announced new fund groups (main fund + growth funds, specialty funds, or sidecar funds) over $400m:


Source: Pitchbook

COVID-19 redraws the map

In the 2018 recap, I wrote that Southern California needed to diversify the geographic range of its startup community beyond the Westside of LA in order to escape the worst effects of the housing crisis. Of course, as has been written many times by now, nothing has reshuffled the deck of “location, location, location” more than COVID-19.

Source: Zumper

Source: Zumper

Source: FRED

Looking ahead to 2021

The one topic that I have not touched upon yet is exits, which form the backbone of any healthy ecosystem. Outside of life sciences, this was a relatively quiet year for Southern California. Yes, a number of local players in electric vehicles like Karma, Fisker, Cazoo, and Nuuve were swept up in the SPAC craze. But after the blockbuster acquisition of Honey by PayPal at the end of last year, things have remained fairly slow on the more traditional M&A and IPO fronts. Perhaps the most notable acquisition of the year was Fastly’s purchase of cybersecurity firm Signal Sciences for $775m, which added momentum to the growing cybersecurity cluster in Southern California.

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