L.A. Culture Influencing Mobile Startups

By: Laurie Sullivan | March 24, 2014 (Featured on MediaPost)

Los Angeles has become the hotbed of mobile messaging companies with SnapChat and Whisper in Los Angeles, along with Marina del Rey’s TextPlus, and Santa Monica’s TigerConnect Clinical Collaboration Platform – Standard. Facebook’s $19 billion deal to acquire WhatsApp has media professionals across search, mobile, video, and content paying close attention.

Venture capitalists invested nearly $227 million in mobile companies in the Los Angeles area last year, with one in five mobile startups taking VC funding. The amount of funds invested in mobile companies in L.A. was four times greater compared with the prior year, according to Outspoken President James Citron.

Citron has been closely tracking investments in L.A.-based messaging companies, especially since selling Mogreet to Silver Lake Sumeru, which merged the company with payvia, a mobile and online payment company that allows consumers to make secure payments via their mobile phone. The combined company, Outspoken, has grown into one of the largest B2C mobile messaging providers in the U.S., delivering more than 1 million hours of mobile video to its 100 million unique mobile subscribers, per Citron.

“People don’t SnapChat text,” Citron said. “They SnapChat pictures and videos.”

SnapChat raised $100 million, including a recent Series C. TigerConnect Clinical Collaboration Platform – Standard, used by healthcare providers, recently closed a $21 million Series B funding round. Whisper, an emerging anonymous messaging app, just raised $20 million in Series A

The investments secure L.A. as a hotbed of messaging. The town has been the epicenter of content creation for still and motion pictures since the creation of Hollywood, he said. You also have lots of tech talent that enables the merger of creative and technology, which is why companies like SnapChat, Whisper, TextPlus, and Tigertext all thrive in southern — rather than northern — California.

Southern California has always been a center of creativity, but not always the best place for a tech start-ups, Still pictures and video are changing that perception.

Content creation began with Hollywood. Then YouTube Space L.A. moved in. Now seven of the top YouTube channels are based in Los Angeles, Citron said. “It used to be that biggest difference between tech start-ups in northern and southern California was the number and the quality of engineers, but that’s shifting,” he said. “One-third of our development team left northern California to live a different lifestyle in southern California. They found a bigger tech opportunity to build a better company.”

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