The recent COVID-19 pandemic has struck the world like a wave. Each industry sector around the world has seen a tremendous loss. Even the most powerful entrepreneurial hubs like Los Angeles, Silicon Valley, Beijing, etc., weren’t immune to this. But, whatever happened, happened!
As we are past that phase and industries are getting back on track, it is time to analyze if the new normal will suit them or not. If we talk about Los Angeles, the startup ecosystem isn’t going to stop thriving. The Los Angeles entrepreneurs’ charging bull spirit has sustained them during the pandemic, and it will keep them going forward in the future.
Here are some great insights about the Los Angeles business hub that places it in the lead in the post-pandemic era!
#1 - A Center for Potential Startups
Los Angeles is a hub of startups, no matter what business niche it is. As the COVID-19 period affected many of these startups, countless others kept their flag high and survived.
As per Chris Hill, the LA-based principal of Comcast Ventures, many industries have stayed perfectly strong during the pandemic. He pointed towards Fintech, SaaS, Gaming, Health Tech, and eCommerce. Here is why- Stanley Pierre-Louis, chief executive of the Entertainment Software Association, said it’s fair to say that video games are having a moment right now - a unique and extraordinary time by any measure.
And indeed, he was right. The video game industry has skyrocketed in the COVID season.
The perfect example of this is Scopely. The mobile game developer and publisher raised $340 million in 2020, making it one of the most valuable startups in Los Angeles.
Moreover, the video game streaming market also experienced a massive boost. Counter-Strike: Global Offensive was the second most viewed game on Twitch (67.6 million hours).
These points prove that an app development company in Los Angeles that develops explicitly games will indeed thrive. Apart from the gaming sector, the health tech sector was also rising in the COVID season. As per the Pitchbook analysis, the virtual health segment firms raised around $534 million in the second quarter of 2020.
LA-based startup ConsejoSano raised 17 million in Series B funding led by Magnetic Ventures. ConsejoSano is a platform that provides appointment coordination with medical providers and patients.
Moreover, Flowly, a digital health startup, did not have any trouble raising venture fundings as per its founder Celine Tien.
Other than these, countless others have a scope of potential growth in the post COVID era, especially any app development companies in Los Angeles. Here are some more examples for reference:
- FloQast: FloQast is a management software for bookkeeping. The key motive behind this software is to make the bookkeeping process faster and efficient. The startup raised $40 million in Series C funding.
- Tapcart: The SaaS platform allows Shopify brands to create shopping apps for mobile. The firm raised $10 million in a Series A funding round led by SignalFire.
#2 - The New Normal Paradigm
When the lockdown was relaxed in late 2020, we witnessed some strange things but became a part of it. For instance, people resisted buying something from physical stores. They were more inclined towards buying online. One clear proof of this is the sudden boost in the app downloads of Walmart.
The eCommerce giant app bagged the number #1 spot across all shopping applications in the US. The app even surpassed Amazon by 20%. This scenario is enough to describe that eCommerce startups are sure to boom in the future. And people will continue to purchase things online.
One great example of a successful eCommerce startup in Los Angeles is Popshop. It is an eCommerce streaming startup that raised around $3 million in a funding round led by Floodgate and Abstract Ventures.
Hence, it is safe to say that startups like these are sure to thrive in the post-COVID period, and people will get used to the new standard (buying online)— the reason being the diverse and expansive Los Angeles market. As the city is a hub of fresh opportunities, it is the best place for any firm to test its startup concept.
#3 - A Key Attractor of Venture Capital
Countless startups in Los Angeles have attracted heavy investments from investors. And it is not just about the startups. Investors are investing in anything where they see potential. One key thing that supports this is the diverse and evergreen startup ecosystem of Los Angeles.
Whether they are more prominent fund investors like Upfront Ventures or early-stage investors like Mucker Capital, the investors firmly believe that Los Angeles will thrive in the post COVID era.
As per Hsu, the co-founder of Mucker Capital, there are far more great companies than venture dollars here in Los Angeles. Investors in other cities should continue to see LA as an underserved ecosystem with tremendous opportunities.
Mark Suster, the managing partner of Upfront Ventures, stated that the firm invests around 40% of its investment dollars in Los Angeles, 40% distributed across the Bay area and NYC. He added that the rest 20% is invested both nationally and internationally. The share of LA is pretty high as compared to other locations.
Upfront has invested in various LA startups like GOAT, Drone Base, Scopely, and many more!
Moreover, Amplify is another venture capital fund in Venice that has invested in the LA-based bookkeeping startup, FloQast.
From all of this, we can say that LA holds a high ground in investments. Thus, making it ready to launch in the post-pandemic period.
#4 - Remote Talent Acquisition
Almost every firm in the world started hiring employees remotely amidst COVID-19. Thus, offering a lot of convenience to them. Moreover, the trend of remote hiring is here to stay for long. Why?
If we talk about LA, it may take hours to get to work if you live across town. This long commute was greatly reduced for people in the lockdown, and people are used to it now.
The remote hiring regime has not just benefitted the employees of LA firms but also the LA firms. As the geographical barriers are eliminated, firms can hire skilled workforce across the border.
With remote working in trend, firms can get their hands on professional and diverse talent overseas. Thus, reducing their hiring cost! Facebook, Twitter, Shopify, American Express, Microsoft, Salesforce are some of the firms switching to remote work.
Final Words
As the city is flooded with the best of the best and diverse startups globally, there is no doubt that it will not thrive. The clear proof behind this is the heavy investments made by various ventures. As people are used to the new normal, it will not take much time for businesses like eCommerce, online food delivery, and health tech to hit zenith.