UNITED STATES—The ecosystem for startups in Los Angeles has so much potential, Adam Struck, CEO of Struck Capital – a venture firm based in Santa Monica is showcasing how big the potential really is. Hollywood actor Leonardo DiCaprio seems to agree as well now that he’s teamed up with the Los Angeles based fund, having invested a notable sum into the firm’s projects. Reportedly, both men want Los Angeles to become a hub for technological innovation, developing solutions for problems facing society in the aftermath of COVID-19.
Through his firm, Struck invests seed money into early stage local businesses. Struck Capital has led the initial funding rounds for numerous startups in Los Angeles. Examples include Mythical Inc – a startup focused on blockchain games, Brainbase Inc — an intellectual property management company based in Pasadena, and Scratch Financial Inc — a fintech that offers veterinary financing also based in Pasadena.
DiCaprio has joined the second Struck Capital fund, which was initially worth $55,000,000 and is worth much more now. Struck, who set this up at the start of 2019, says that he is currently focused on managing and executing investments. Nonetheless, he also mentioned that the second Struck Capital fund is open to opportunistic investors, until the year’s end.
Struck explained that the second fund is intended for businesses dealing with notable society wide problems, especially those looking for new openings in the market due to coronavirus disruption. Included in this are areas related to health and remote communication, which have changed significantly since the pandemic. Struck strongly believes that businesses that solve big, notable problems will prosper over the long term.
The second fund has been used to make six different investments already. Many of these are businesses that predate the pandemic but have experienced accelerated growth and a surge in demand since then. Frame Wellness Inc., a mental health platform based in Santa Monica, is one such example that has obvious links to major social problems. Frame wants to improve mental healthcare access and has introduced some new digital elements since earlier in the year. This includes matching local therapists, and ‘digital conversations’ with therapists on subjects like communication tools and managing stress. Struck reported that the impact of coronavirus lockdowns on people’s mental health increased the relevancy of Frame’s services, and boosted interest in the brand.
The remaining investments are not related to social issues as strongly, but focus on disrupted areas due to the pandemic. The BlackCart company from Toronto is one such example. Its ‘try before you buy’ technology uses fraud alert algorithms, so online clothing vendors can provide complimentary try on services without risking much. Struck said that BlackCart has gained significant momentum since COVID-19, and released its service months before the original target date. Also, he explained that the $2,000,000 round of investment led by his company recently was carried out using digital communication platforms.
Although coronavirus caused many problems for Los Angeles, Struck believes that the pandemic can benefit the venture ecosystem of the county, over the long term. One key example is the change to remote working, which might show entrepreneurs that they can succeed without being in Silicon Valley. Struck maintains that Los Angeles’ higher standard of living and relative affordability, combined with an effective tech ecosystem, will attract more business owners to the area. The future looks bright either way.