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From Hulu, Demand Media to ShoeDazzle, BeachMint: Los Angeles builds tech giants too
With Vator Splash LA just a day away I got to thinking about what well-known and long-established companies were born in the sunny Los Angeles environment. While the average Web consumer is familiar with seeing San Francisco or Palo Alto as the home base for the tech services they use, quite an impressive catalog of online services come from the Silicon Beach but many of them are angled around the industries and talent pools Los Angeles is known for: media and commerce.
(Editor's note: Get tickets now before the event Thursday. Register here.)
So before we introduce you to all the new start-ups bringing a new vibrancy to LA tech, here is a reminder of how many services you use or interact with everyday is close to Hollywood than Hayward.
Hulu – I am one of the people that rarely goes a day without updating and watching from my Hulu queue. Frankly, I don’t remember what I did before Hulu – oh yeah, I paid for cable and a DVR. Hulu, founded in March 2007, is an LA-based entity operated independently by a team picked by NBC Universal, News Corporation, and Disney.
Hulu’s online video service offers a selection of hit shows, clips, movies and exclusive content. Thanks to the success of the premium membership of Hulu Plus, in January, Hulu broke through the 1.5 million paying customers mark.
That's a 5X growth rate from the 300,000 paying subscriber base signed up to Hulu Plus at the end of 2010. Hulu Plus offers more shows, movies, ad-free viewing and access to full series' rather than selected episodes.
The company also grew 60% from 2010 to approximately $420 million in revenue for a service that allows users to watch Hulu content on their computers, TV, gaming devices, tablets and smart phones.
For the $100 million invested in the company, Hulu looks like it is on the road to significant revenue between subscriptions and advertising that keeps getting more tailored and engaging.
Ticketmaster -- Ticketmaster is one of those unique stories of a company that made the transition to online service really well. Established in 1976, Ticketmaster really hit the online world with vigor in 2008 when it beefed up its offerings to provide exclusive ticketing services for leading arenas, stadiums, professional sports franchises and leagues, college sports teams, performing arts venues, museums, and theaters.
Ticketmaster now operates in more than 20 global markets. Ticketmaster was founded where star-studded events were conceptualized.
In 2001 Ticketmaster bought another event ticket service Evite.
Demand Media -- Demand Media, Inc. (NYSE: DMD) is powerhouse content and social media company that helps advertisers find innovative ways to engage with their customers and enables publishers to expand their online presence. Lately, Demand Media has partnered with several leading media publications, such as USA Today and National Geographic to produce editorial sections for them. The content is owned by Demand but the revenues are shared between the partners.
Founded in 2006, the mow publically traded on the NYSE:DMD, has three top trafficked sites it manages: eHow, Cracked.com, and Livestrong
The company received $375 million in funding in just two years and made some powerful acquisitions including Expert Village in 2007, Pluck in 2008, and CoverItLive, RSS Graffiti and IndieClick Media Group in 2011.
MySpace – Remember in 2004 when everyone was friend’s with Tom. I know I do. But at that time and before, MySpace was the place that bands could get a little exposure. It was a place where music was shared and discovered and people used a lot of HTML and media embedding to personalize their page.
Still one of the world’s largest social networks, MySpace has seen the gamut of successes and failures.
By February 2004, MySpace reached 1 million registered users and by the end of that same year it skyrocketed to 5 million. Then, in 2005, News Corporation bought MySpace’s parent company eUniverse for $580 million -- approximately $327 million of which was for MySpace.
Then there were the tough years when people migrated over to Facebook and saw little need for the now advertising and spam-heavy MySpace world.
In June 2011, MySpace was acquired by Specific Media for around $35 million and Justin Timberlake entered the company as creative director, pledging to bring MySpace back to its musical roots. Whether MySpace returns as a significant social network to be noticed or not, it did change the online media game in a lot of ways.
BeachMint – I know that when I think of luxury indulgence and shopping – I think of Los Angeles. So what better fit for a booming, celebrity endorsed online shopping experience than the summery SoCal world. BeachMint is a designer-curated sales sites, founded by serial tech entrepreneurs, Josh Berman (Co-Founder MySpace) and Diego Berdakin. Launched back in 2010, BeachMint’s first commerce segment was its extension: JewelMint. Now the service has BeautyMint, ShowMint and Style Mint – each with celebrities from Kate Bosworth and Mary-Kate Olsen and Ashley Olsen to Jessica Simpson.
BeachMint has raised more than $80 million in just two years and is a vibrant part of the curated online shopping experience.
ShoeDazzle – Another segment of online commerce that is gaining a lot of steam is the membership flat-price service that ShoeDazzle has firmly grabbed ahold of. People can become a member of the company and each month are able to purchase a wide array of shoes for the set price. Reality show star and model Kim Kardashian is the celebrity face to this company, which has raised more than $60 million in funding since debuting in 2009.
JustFab -- Just Fab is a monthly VIP membership program that grants fashion lovers access to purchase shoes and handbags for a membership fee. Each Justfab item is $39.95 and shipping is always free.
Now focusing on shoes, jewelry and handbags, JustFab has revealed that its two-year-old, e-commerce start-up has passed six million members and just experienced 50% growth from Q4 2011 to 2012 Q1.
The Los Angeles-based fashion company is also adding roughly 500,000 new members each month – all looking to find amazing fashion pieces for an attainable $39.95 per piece.
With this growth announcement, JustFab is also opening up its service to those that aren’t ready to take the plunge and be a monthly member they can purchase the items at a non-member rate of $49 or $69 per item – still a average savings per item of close to $20-$30.
Co-CEO of the company, Adam Goldenberg, explained to me in an interview that while the subscription model has been a great system, the company didn’t want to make people new to the site skittish.
Goldenberg and his co-founder and co-CEO Don Ressler started JustFab by self-funding the initial $30 million and landed a $33 million Series A round back in September. That same month the company also announced that it had signed on Kimora Lee Simmons, the fashionista behind Baby Phat, as the president and creative director.
Though based in the US, JustFab has just launched in Canada and is gearing up to become a force to reckon with in the German market as well.
Magento – Founded in 2010 and acquired by eBay in 2011, Magento is a feature-rich ecommerce platform that provides online merchants the ability to control and customize their store.
Magento, which features powerful marketing, search engine optimization and catalog-management tools, was designed to be very scalable and quickly attracted the attention of eBay last year. Prior to acqusiton, Magento raised a modest $22.5 million 2010.
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