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SpaceX alumni are helping build LA’s startup ecosystem
During the days when Snapchat’s popularity was booming, investors thought the company would become the anchor for a new Los Angeles technology scene.
Snapchat, they hoped, would spin-off entrepreneurs and angel investors who would reinvest in the local ecosystem and create new companies that would in turn foster more wealth, establishing LA as a hub for tech talent and venture dollars on par with New York and Boston.
In the ensuing years, Los Angeles and its entrepreneurial talent pool has captured more attention from local and national investors, but it’s not Snap that’s been the source for the next generation of local founders. Instead, several former SpaceX employees have launched a raft of new companies, capturing the imagination and dollars of some of the biggest names in venture capital.
“There was a buzz, but it doesn’t quite have the depth of bench of people that investors wanted it to become,” says one longtime VC based in the City of Angels. “It was a company in LA more than it was an LA company.”
Perhaps the most successful SpaceX offshoot is Relativity Space, founded by Jordan Noone and Tim Ellis. Since Noone, a former SpaceX engineer, and Ellis, a former Blue Origin engineer, founded their company, the business has been (forgive the expression) a rocket ship. Over the past four years, Relativity href=”https://techcrunch.com/2019/10/01/relativity-a-new-star-in-the-space-race-raises-160-million-for-its-3-d-printed-rockets/”> has raised $185.7 million, received special dispensations from NASA to test its rockets at a facility in Alabama, will launch vehicles from Cape Canaveral and has signed up an early customer in Momentus, which provides satellite tug services in orbit.
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Ford’s all-electric SUV is officially the ‘Mustang Mach-E,’ and you can reserve one starting Nov. 17
Ford has revealed the official name of its forthcoming EV SUV, which has a Mustang lineage and will be officially revealed on November 17 in LA. The new vehicle is called the Mustang Mach-E, and following its official unveiling (hosted by Idris Elba, by the way), you’ll be able to actually sign up online and reserve one by putting down a $500 deposit.
The reservation system will include access to a limited “First Edition” set of cars, about which Ford says it will provide details during the launch event. The deposit is also fully refundable, in case you get cold feet, and people who put down deposits will later get the opportunity to actually configure their vehicle prior to delivery. During the reservation process, you also select your preferred Ford dealer, presumably for eventually picking up the car.
Ford’s teases of the vehicle so far suggest a crossover-style electric SUV, and Ford has put up some collateral material on the web with a few additional clues about what it will offer, including a targeted EPA range rating of “at least” 300 miles, and a charging rate of around 47 miles in just 10 minutes with a 150kW DC fast charger, with two years of free charging across Ford’s EV charger network included.
Below, you can see all the hints and glimpses of the car we’ve gotten from Ford so far, and you can probably fill in the gaps via imagination and reference to the existing Ford Mustang, but November 17 will finally reveal all, and we’ll definitely have coverage here on TC to satisfy your curiosity.
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LA-based gaming studio Scopely raises $200M at a $1.7B valuation
The Los Angeles-based mobile game development studio Scopely has become America’s newest unicorn thanks to a $200 million financing, which values the company at a whopping $1.7 billion.
Scopely said it would use the capital to continue its strategy of developing and acquiring new games as it looks to continue its run of six consecutive mobile games that will gross $100 million or more in lifetime revenue.
The new investment follows Scopely’s milestone of achieving more than $1 billion in lifetime revenue. Games in the company’s portfolio include: Looney Tunes World of Mayhem and Star Trek Fleet Command, created with the recently acquired DIGIT Game Studios.
Indeed, part of the reason for the financing is to accelerate the pace of its acquisitions and investments into new game development studios, according to chief executive Walter Driver .
“The barrier to entry from independent studios is to find product-market fit,” says Driver. “Increasingly, it’s helpful for them to have publishing capabilities that are more global in nature and more scaled.”
The unicorn gaming company has amassed increasingly larger rounds over the past three years on a nearly annual basis. The company raised a $55 million round of financing in 2016, $60 million in 2017 and $100 million in 2018.
For investors, what makes the company compelling (beyond its string of successful games) is the technology platform that undergirds its popular mobile gaming titles. “What the company allows you to do is look at engagement and alter a game midstream to tailor the experience,” says Ravi Viswanathan, the founder and managing partner of NewView Capital .
NewView, a growth-stage venture capital firm spun out of the multibillion-dollar investment firm NEA, led the most recent $200 million round for Scopely.
Scopely is the firm’s first major investment in a gaming company and was part of a portfolio of investments that NewView took over when it spun off from NEA.
For Scopely, the latest capital infusion is just more money in the bank to invest in or acquire budding game studios and give them access to the technology stack that has made Scopely so compelling, according to Driver.
“Our technology platform is about optimizing free digital experiences for the largest amount of players possible,” Driver says. “We’re primarily focused on finding the most passionate and talented game developers that want to specialize in making the kind of game design and might have the kind of specialized expertise that we admire.”
In the eight years since Scopely first launched, the gaming industry has been transformed by the opportunities that exist in the mobile market — and both Scopely and companies like Jam City have capitalized on the new platform.
“We see the future of gaming as free live services that give users choice and agency of how they want to play,” says Driver. “Being able to refine those live services over time and react to the data that you’re seeing and optimize those products,” has been at the core of Scopely’s technology stack.
The company is already raking in more than $400 million in annualized revenue and it was that growth that convinced NewView and investors like the Canadian Pension Plan Investment Board to commit capital as part of this latest round.
Scopely has already made a few select minority investments in gaming studios, and with the new cash, Driver hopes to roll up more independent game developers.
*This story has been updated to indicate that Scopely’s valuation is $1.7 billion. Not $1.4 billion as originally reported.
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Morpheus Space’s modular, scalable satellite propulsion could be a game-changer for orbital industry
Building effective propulsion systems for satellites has traditionally been a highly bespoke affair, with expensive, one-off systems tailor-made to big, expensive spacecraft hardware. But increasingly, companies, including startups, are looking at ways to provide propulsion tech that can scale with the projected boom in demand for orbital satellites, including CubeSats and small sats, as the commercialization of space and advances in sensor, communication and launch technology broaden the scope of those working in this bold new frontier.
Morpheus Space, which began life as a research project at the University of Western Germany, has accomplished a lot when it comes to propulsion in the short time since its official founding around a year and a half ago. The Dresden-based startup already has sent some of its thrusters to space, where they’re actually providing propulsion, and it’s working with a number of clients and potential clients, including NASA’s Jet Propulsion Laboratory. The startup also just wrapped up its participation in Techstars’ inaugural Starburst Space Program in LA.
“Our motivation behind starting Morpheus Space was the lack of maneuverability of, especially small satellites in space,” explained Morpheus CEO and co-founder Daniel Bock, with whom I spoke at last week’s International Astronautical Congress in Washington, D.C. “We have around 2,000 active satellites in space, and in the next few years this will increase by 10x. We have to deal with that. So the first step in how we want to solve that is with our proportion systems, to give mobility to small satellites.”
The startup has seen a ton of inbound interest, and has even had conversations with the CTO of NASA and the CEO of Aerospace Corporation based on the strength of its technology. But what’s so special about what they’re doing, versus what has already been available for satellite propulsion? Put simply, “it’s the world’s smallest and most efficient propulsion system,” according to Morpheus Space co-founder István Lőrincz.
A single Morpheus NanoFEEP thruster propulsion system
Morpheus’ thruster uses gallium as its fuel source, which allows it to be very efficient, with an operating linespace of up to three or more years — non-stop, Lőrincz told me. When you factor in the low cost of these thrusters versus other solutions, and the ability to make them incredibly small (one thruster, along with electronics, is not that much larger than your average USB charger), you get a product that’s tailor-made for the cost-sensitive emerging new space industry. Ensuring the mass of these thrusters is small pays off big dividends when it comes to thinking about launch costs, and the fact that these are “Lego-like” in their modularity means they can suit a variety of different clients’ needs.
“You can build propulsion systems for satellites that are below one kilogram, up to those the size of trucks, just by creating arrays,” Lőrincz says.
An example of a Morpheus multi-thruster array used in a 3U-sized small satellite
Size is important, but so is scalability, and that’s another strength that the Morpheus thrusters bring to the market. Lőrincz told me that their technology allows you to quickly and easily build a large batch of the thrusters, instead of having to tailor-make your propulsion system to fit the satellite, which provides big benefits in terms of manufacturing and design costs — which Morpheus can then pass on to its customers, opening up to a whole new, much more price-sensitive segment of the market the possibility of including true orbital maneuvering capabilities.
Next up for Morpheus Space, after it gets its hardware business fully up and running, is to develop and deploy software that complements its thrusters and can offer clients things like fully automated route planning and navigation, Bock told me.
“For example, you can imagine you just have to command ‘Okay I want to go from A to B,’ and everything is handled on board,” he said. So when and how you turn, all the routing. And the next step will be an automated way of handling whole constellations.”
It’s a big goal, but there’s a big potential pay-off. More and more companies are getting into the constellation game, including SpaceX and Amazon, and there’s a lot more to come on that front as companies build out new use cases for collecting and making use of data gathered from orbit. Orbital traffic management and collision avoidance is one reason big industry groups like the Space Safety Coalition are being formed, and anyone who can help supply with a solution players at all budget levels of the industry stands to benefit.
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Startups Weekly: VCs are drunk on beverage startups
Hello and welcome back to Startups Weekly, a newsletter published every Saturday that dives into the week’s most noteworthy venture deals, fundraises, M&A transactions and trends. Let’s take a quick moment to catch up. Last week, I wrote about an alternative to venture capital called revenue-based financing and before that, I jotted down some notes on one of VCs’ favorite spaces: cannabis tech. Remember, you can send me tips, suggestions and feedback to kate.clark@techcrunch.com or on Twitter @KateClarkTweets.
This week, I want to share some thoughts — questions, rather — on beverages. Just as my inbox has been full of cannabis-related pitches, it’s also been packed with descriptions of new…drinks. Perhaps the most noted so far is Liquid Death, canned water for the punk rock crowd, because why not? Liquid Death has attracted nearly $2 million in funding from angel investors like Away co-founder Jen Rubio and Twitter co-founder Biz Stone. Before I tell you about a few other up-and-coming beverage makers, I must beg the question: Does the beverage industry need disrupting?
Founders say yes. Why? For one, because millennials, according to various studies, are consuming less alcohol than previous generations and are therefore seeking non-alcoholic beverage alternatives. Enter Seedlip, a non-alcoholic spirits company, for example. Or Haus, launching this summer, an all-natural apéritif distilled from grapes that has a lower alcohol content than most hard liquors. Haus, like any good consumer startup in 2019, is shipped directly to your door.
Beverages are being disrupted, there’s no stopping it. pic.twitter.com/DMEg88t4iO
— Kate Clark (@KateClarkTweets) May 21, 2019
Bev, a canned wine business that recently raised $7 million in seed funding from Founders Fund, thinks marketing in the alcohol industry is the problem. Founder Alix Peabody designed a line of female-focused canned rosé. If you’re wondering why alcohol needs to be gendered in such a way, you’re not alone. Peabody explained most alcohol brands cater to men, and that’s a problem.
“The joke I like to make is there’s a go-to type of alcohol for every type of bro and we just don’t have that for women,” Peabody told TechCrunch earlier this year.
Finally, the wellness movement is taking over, driving VCs toward some odd upstarts. From wellness chat and journaling apps to therapy substitutes to fitness companies, stick wellness in a pitch and investors will take a second look. More Labs, for example, is backed with $8 million in VC funding. The company is readying the launch of Liquid Focus, a biohacking-beverage that claims to “solve modern-day stressors without the negative side effects.” Finally, Elements, “an elevated functional wellness beverage formulated with clinical levels of adaptogens to give your body exactly what it needs in four categories (focus, vitality, calm, and rest) for specific cognitive functions” (damn, what copy), recently launched. It doesn’t appear to be funded yet, but let’s just give it a few months.
There’s more where that came from, but I’m done for now. On to other news.
I almost skipped IPO corner this week because no big-name companies dropped or amended their S-1s or completed a highly anticipated IPO, as has been the case basically every week of 2019. But I decided I better give a quick update on Luckin Coffee’s tough second week on the stock market. Luckin Coffee, if you aren’t familiar, is Starbucks’ Chinese rival. The company raised more than $550 million after pricing at $17 per share a little over a week ago. Immediately the stock skyrocketed 20 percent to a roughly $5 billion market cap; then came concerns of the company’s lofty valuation, major cash burn and uncertain path to profitability. Luckin has dropped around 25 percent since closing its debut trading day. It closed Friday down 3 percent.
Y Combinator, the popular accelerator program and investment firm announced this week that it has promoted longtime partner Geoff Ralston to president. This comes two months after former president Sam Altman stepped down to focus his efforts full-time on OpenAI. The promotion of Ralston is an unsurprising choice for YC, an organization that employs roughly 60 people, many of whom have been affiliated with it in one way or another for years.
Automattic acquires subscription payment company Prospress
Shopify quietly acquires Handshake, an e-commerce platform for B2B wholesale purchasing
Streem buys Selerio in an effort to boost its AR conferencing tech
As Amex scoops up Resy, a look at its acquisition history
The Los Angeles ecosystem is $76 million stronger this week as Fika Ventures, a seed-stage venture capital firm, announced its sophomore investment fund. Fika invests roughly half of its capital exclusively in startups headquartered in LA, with a particular fondness for B2B, enterprise and fintech companies. The firm was launched in 2017 by general partners Eva Ho and TX Zhuo, formerly of Susa Ventures and Karlin Ventures, respectively. The pair raised $41 million for the debut effort, opting to nearly double that number the second time around as a means to participate in more follow-on fundings.
DoorDash raises $600M at a $12.7B valuation
TransferWise completes $292M secondary round at a $3.5B valuation
Auth0 raises $103M, pushes its valuation over $1B
Canva gets $70M at a $2.5B valuation
Payment card startup Marqeta confirms $260M round at close to $2B valuation
Modsy scores $37M to virtually design your home
Sun Basket whips up $30M Series E
Zero raises $20M from NEA for a credit card that works like debit
Nigeria’s Gokada raises $5.3M for its motorcycle ride-hail biz
Our premium subscription service had another great week of interesting deep dives. This week, TechCrunch’s Lucas Matney went deep on Getaround’s acquisition of Drivy for his latest installment of The Exit, a new series at TechCrunch where we chat with VCs who were in the right place at the right time and made the right call on an investment that paid off. Here are some of the other Extra Crunch pieces that stood out this week:
- 10 immigration tips for luck-struck tech workers
- When will customers start buying all those AI chips?
- Takeaways from KubeCon; the latest on Kubernetes and cloud-native development
- Why startups need to be careful about export licenses and the Huawei ban
If you enjoy this newsletter, be sure to check out TechCrunch’s venture-focused podcast, Equity. In this week’s episode, available here, Crunchbase News editor-in-chief Alex Wilhelm and I discuss how startups are avoiding IPOs and VC’s insatiable interest in food delivery startups.
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Dreaming of Mars, the startup Relativity Space gets its first launch site on Earth
3D-printing the first rocket on Mars.
That’s the goal Tim Ellis and Jordan Noone set for themselves when they founded Los Angeles-based Relativity Space in 2015.
At the time they were working from a WeWork in Seattle, during the darkest winter in Seattle history, where Ellis was wrapping up a stint at Blue Origin . The two had met in college at USC in their jet propulsion lab. Noone had gone on to take a job at SpaceX and Ellis at Blue Origin, but the two remained in touch and had an idea for building rockets quickly and cheaply — with the vision that they wanted to eventually build these rockets on Mars.
Now, more than $35 million dollars later, the company has been awarded a multi-year contract to build and operate its own rocket launch facilities at Cape Canaveral Air Force Station in Florida.
That contract, awarded by The 45th Space Wing of the Air Force, is the first direct agreement the U.S. Air Force has completed with a venture-backed orbital launch company that wasn’t also being subsidized by billionaire owner-operators.
By comparison, Relativity’s neighbors at Cape Canaveral are Blue Origin (which Jeff Bezos has been financing by reportedly selling $1 billion in shares of Amazon stock since 2017); SpaceX (which has raised roughly $2.5 billion since its founding and initial capitalization by Elon Musk); and United Launch Alliance, the joint venture between the defense contracting giants Lockheed Martin Space Systems and Boeing Defense.
Like the other launch sites at Cape Canaveral, Launch Complex 16, where Relativity expects to be launching its first rockets by 2020, has a storied history in the U.S. space and missile defense program. It was used for Titan missile launches, the Apollo and Gemini programs and Pershing missile launches.
From the site, Relativity will be able to launch its first designed rocket, the Terran 1, which is the only fully 3D-printed rocket in the world.
That rocket can carry a maximum payload of 1,250 kilograms to a low earth orbit of 185 kilometers above the Earth. Its nominal payload is 900 kilograms of a Sun-synchronous orbit 500 kilometers out, and it has a 700 kilogram high-altitude payload capacity to 1,200 kilometers in Sun-synchronous orbit. Relativity prices its dedicated missions at $10 million, and $11,000 per kilogram to achieve Sun-synchronous orbit.
If the company’s two founders are right, then all of this launch work Relativity is doing is just a prelude to what the company considers to be its real mission — the advancement of manufacturing rockets quickly and at scale as a test run for building out manufacturing capacity on Mars.
“Rockets are the business model now,” Ellis told me last year at the company’s offices at the time, a few hundred feet from SpaceX. “That’s why we created the printing tech. Rockets are the largest, lightest-weight, highest-cost item that you can make.”
It’s also a way for the company to prove out its technology. “It benefits the long-term mission,” Ellis continued. “Our vision is to create the intelligent automated factory on Mars… We want to help them to iterate and scale the society there.”
Ellis and Noone make some pretty remarkable claims about the proprietary 3D printer they’ve built and housed in their Inglewood offices. Called “Stargate,” the printer is the largest of its kind in the world and aims to go from raw materials to a flight-ready vehicle in just 60 days. The company claims that the speed with which it can manufacture new rockets should pare down launch timelines by somewhere between two and four years.
Another factor accelerating Relativity’s race to market is a long-term contract the company signed last year with NASA for access to testing facilities at the agency’s Stennis Space Center on the Mississippi-Louisiana border. It’s there, deep in the Mississippi delta swampland, that Relativity plans to develop and quality control as many as 36 complete rockets per year on its 25-acre space.
All of this activity helps the company in another segment of its business: licensing and selling the manufacturing technology it has developed.
“The 3D factory and automation is the other product, but really that’s a change in emphasis,” says Ellis. “It’s always been the case that we’re developing our own metal 3D printing technology. Not only can we make rockets. If the long-term mission is 3D printing on Mars, we should think of the factory as its own product tool.”
Not everyone agrees. At least one investor I talked to said that in many cases, the cost of 3D printing certain basic parts outweighs the benefits that printing provides.
Still, Relativity is undaunted.
But first, the company — and its competitors at Blue Origin, SpaceX, United Launch Alliance and the hundreds of other companies working on launching rockets into space again — need to get there. For Relativity, the Canaveral deal is one giant step for the company, and one great leap toward its ultimate goal.
“This is a giant step toward being a launch company,” says Ellis. “And it’s aligned with the long-term vision of one day printing on Mars.”
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Esports Overwatch League heads to hipster Brooklyn for its finals
What could be more perfect than moving the inaugural championship finals for an esports league from its Los Angeles home to Brooklyn?
For Overwatch League, the esports conference created by fiat from Activision Blizzard, the move is the first step in its plans for housing esports teams in cities around the country.
Heading from sunny Burbank, Calif. to the hipster heartland of Brooklyn conjures up echoes of the famed Dodger franchise move (in reverse) while tapping into one of the few other markets in the U.S. that might rival LA for esports popularity.
When the Overwatch regular season ends on Sunday, June 17th, six teams will face off in the league’s first post-season playoffs. Those games are set to begin July 11th and will take place in Burbank at the company’s “Blizzard Arena Los Angeles.”
After the playoffs, the final teams will fly to New York to compete for the largest share of a $1.4 million prize pool and the first Overwatch League trophy. The games are slated to begin Friday, July 27th and continue on the 28th.
“The Overwatch League Grand Finals will be an epic experience for fans and viewers,” said Overwatch League commissioner Nate Nanzer in a statement. “We want this to be the pinnacle of esports, and holding it at a world-class venue like Barclays Center, in a global capital like New York, will help us celebrate not only the league’s two best teams, but the fans, partners, and players who have joined us on this incredible journey.”
Overwatch is taking a geographic approach to its franchises with teams sponsored by cities in the U.S. and major esports hubs around the world like London, Shanghai and Seoul.
Eventually the league is looking to set up stadiums in locations outside of Burbank. With league play requiring teams to travel — like a traditional sports league.
The move to Brooklyn could be a test of how well the Overwatch experience travels and a precursor to the league starting to take its show on the road in earnest.
Tickets go on sale on Friday, May 18th, at 10 a.m. EDT, and can be bought on ticketmaster.com and barclayscenter.com, while tickets to the first two rounds of the Overwatch League postseason at Blizzard Arena Los Angeles go on sale Thursday, May 10th, at 9 a.m. PDT via AXS.com.
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After Harvey, ignore the climate debate and focus on building better, more efficient cities
In the intervening years since those storms, the nation has been continually pummeled by “historic” climatological events. While the country has been taking this beating from Mother Nature, the conversation in statehouses, city halls and Washington has been bogged down in a discussion about climate change. What causes it, what to do about it, and whose fault it is that… Read More
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