LA Funding Up Despite Slowdown — Q1 LA Seed Deal Report

We’re excited to share the most recent update of our LA Seed Report, encompassing all seed funding to LA companies in Q1.

We’ve noticed an uptick in LA Seed activity in recent quarters, with funding in Q1’20 nearly double that of Q1’19, and funding in the prior two quarters exceeding $200mm — almost equal to that of the entire preceding year. Deal volume is also on the rise, with 38 companies closing Seed rounds in the first quarter.

Over the past few quarters, we’ve noted a rise in average seed deal sizes. Most notably- a category of $5mm+ Seed rounds becoming prevalent for the first time. While nothing new for larger ecosystems like SF and NY, it’s a relatively new phenomenon here in LA. This quarter, 19 companies raised seed rounds of $2.5mm+, with an average round size within that grouping of ~$4mm.

This stands in stark contrast to much of the narrative elsewhere, where both deals and dollars at Seed stage and beyond, have been on the decline. Since starting this project years back, we’ve noted more funds being raised in LA, a higher percentage of capital coming from local investors, and early stage teams tackling more varied verticals. Echoing this, more recently, much of the growth nationwide has come from metros like Austin, Denver, Atlanta, and DC — locations that look much like LA previously in funding and focus.

Below are a few key trends from LA Seed deal activity in Q1:

• Funding reaching new highs after a period of consistent but smaller numbers, with $200mm+ raised in the past two quarters
• Fintech re-emerging as one of the top categories after a period of slower funding, with $15mm+ this quarter, and $20mm+ last.
• Seed rounds are getting bigger… not new on the whole, but the first time we’ve consistently seen $5mm+ rounds in LA.

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(Our report covers seed deals that have been publicly announced in the quarter. Please reach out to connor@amplify.la with any questions or comments.)