For quite some time, Silicon Valley has been the technology powerhouse of California in terms of both up-and-coming startups and big-named companies, like Google and Facebook. However, Los Angeles has been coming into its own over the last decade or so. In this week's Tech Center tracker, Shivani Siroya, CEO of Tala, spoke with PYMNTS on how the Los Angeles area is becoming a center for tech.
Before we jump into the post, here are a few quick facts about Los Angeles and its tech scene:
- The city had a population of 3.971 million in 2015, which makes it the second-biggest city in the United States and the most crowded city in California.
- Los Angeles County had an estimated population of 10 million in 2015.
- GDP of Los Angeles County (2015): $930.82 billion.
- Median household income (2015): $56,196
- There are more than 3,800 startups and tech companies.
- In the last three years, between the FinTech and payments sector, 25 startups were founded.
- ECommerce led the Los Angeles startup sphere, with 22 companies that have more than $50 million in funding.
There's a chance that Los Angeles is ready to take on Silicon Valley.
With over 150 tech companies in Los Angeles, the city is looking to host its first tech job fair. With companies like Dollar Shave Club and The Honest Company, the startup scene is strong. Los Angeles Mayor Eric Garcetti discussed his hopes for the city's upcoming job fair in a recent TechCrunch article. He said: “TechFair LA promises to be the tech community event of the year. A place where people in this world-changing industry will come to talk about new trends, to discuss new ideas and to network with the leaders who are making it all happen.”
One of the biggest pieces of news helping to make the push for Los Angeles as a big player is Snap Inc.’s IPO filing. Some say that the company's IPO will be the largest tech filing Los Angeles has ever seen and the highest valued in U.S. history. Snap’s filing has everyone in the city excited to become the technology powerhouse.
Founder of wealth management firm LourdMurray, Blaine Lourd, discussed Los Angeles' tech startup movement with The New York Times. He said: “What we have not had is our Google moment. The real estate guys are pumped because the first thing people usually buy is a house, or a dream home.”
From recent news, it sounds as though Los Angeles is on the brink of becoming the next Tech Center.
Shivani Siroya, CEO of Tala, a mobile tech and data science company that specializes in credit scoring and financial services, told PYMNTS that, while Los Angeles is still in its early stages of tech growth, there's a lot each of the companies can learn from one another.
Here is an excerpt of the conversation.
PYMNTS: Can you describe your experience with the tech community in Los Angeles?
SS: The LA tech ecosystem is very close-knit, collaborative and supportive. Additionally, perhaps it's the amazing weather — everyone is happier and more active, which results in excellent work and healthy company culture.
PYMNTS: What do you think makes Los Angeles (or California as a whole) an attractive location for both entrepreneurs and investors? Is there anything people may find surprising about operating a business there?
SS: LA is a great place to be running a tech company — whether it's great talent coming from the local universities or down from the Bay Area. Entrepreneurs building companies in LA are also surrounded by a wonderfully diverse population, so they receive feedback more representative of the rest of the country rather than being in a tech echo chamber.
PYMNTS: What are some of the challenges facing startups in Los Angeles? Are there any initiatives to help address those barriers?
SS: There are benefits to being a close-knit community, but the relatively small size of the community can be a challenge in terms of finding talent. Fortunately, the community is growing fast! And while LA has a reputation of being a one-industry town, it's continuing to diversify in a way that's benefiting startups in all kinds of sectors.
PYMNTS: How has Los Angeles' startup ecosystem changed in recent years? What do you think has sparked this transformation?
SS: A few years ago, most people thought that the only thriving tech sectors in LA would be focused on entertainment and media. Now, you see companies like ours, in FinTech, as well as tech companies, doing really interesting things in real estate, food, eCommerce and even neurotech. I think people are recognizing that being in LA sparks creativity. So many entrepreneurs are drawn to the energy here.
PYMNTS: What is Los Angeles' FinTech sector like? How has it changed or grown in recent years?
SS: It's been thriving for a while, with companies like Green Dot and ZestFinance leading the way. Given the fact that access to finance and the need for customization of personal finance and banking is important here, we're also starting to see the sector grow even further with companies like ours, Float, Payoff and Aspire. I think we'll start to see even greater talent here as a result.
PYMNTS: Which sectors of the technology landscape are thriving in Los Angeles? How do you see these industries evolving in the coming years?
SS: We're seeing tremendous innovation in a variety of industries here in LA, including neurotech, FinTech, real estate, mobile gaming, fashion and eCommerce. I expect that to continue to be the case. We hope more entrepreneurs and angel investors will spring from Snap's upcoming IPO to make way for more companies.
PYMNTS: Is there anything else you think people should know about Los Angeles' role as a global tech center?
SS: The growing LA tech scene has a few things going for it. First, LA is a global port city, and its proximity to Asia makes it an ideal place to do business with that part of the world. We're also benefiting from Mayor Garcetti's commitment to fostering a thriving, global tech industry — everything from making parts of the city more friendly to startups and co-working to bridging different parts of the city through the light rail. This helps create better sharing and cross-functionality among the different industries. And the LA tech fair was one of the largest in the country. It's been great for building the community and attracting top talent.