Venture capital firms with operations in Orange County decreased their local investments last year by about 30%.
The largest 13 firms here had 19 area investments totaling $71.5 million, down from $101.6 million in 2020, according to the Business Journal’s annual alphabetized directory of venture capital firms.
For the second year in a row, Toba Capital of Newport Beach significantly outpaced the rest of its competitors, committing $40 million in local investments. In 2020, it invested $52 million in just one Orange County company alone.
Vinny Smith created Toba in 2012 after selling Quest Software in Aliso Viejo to computer maker Dell Inc. (NYSE: DELL) for $2.8 billion. Smith received about $800 million in the sale.
Toba makes seed-and late-round investments in software companies, including in recent years Tustin-based fintech Happy Money (see story, page 3) and Irvine-based security software maker Netwrix Inc. The size of rounds it participates range from as low as $500,000 to $75 million.
OC’s Biggest Patrons
Other notable supporters of the local ecosystem: Cambridge Companies SPG, also of Newport Beach, invested $20 million into four OC companies in 2021—up nearly 150% from the previous year.
The firm, co-founded by siblings Filipp Chebotarev and Polina Chebotareva in 2010, invests in real estate and various consumer packaged goods concepts, from health food company Tosi Foods of Anaheim to vegan frozen treat brand Modern Pop of Laguna Beach.
Since 2016, Cambridge has invested roughly $150 million in over 30 consumer brands, according to Forbes.
In August, the firm led Santa Cruz-based beverage company Lifeaid’s $20 million Series C. The company creates “healthy alternatives” to sodas and energy drinks,” designed to boost performance for people pursuing active lifestyles.
Adventus Ventures of Irvine also upped its local investment to $6 million in 2021, from $5 million in 2020.
Established in 2017 by entrepreneur and Tech Coast Angels member Shawn Moaddeb, Adventus Ventures is a medical device company incubator and seed-stage investor.
Adventus’ portfolio includes medical device makers Allevion Therapeutics, Pressao Medical and Vascular Health Inc., all of which are based in Irvine.
Okapi Venture Capital of Ladera Ranch, founded in 2005, invests in emerging businesses in the information technology and life science sectors.
The firm invested $4.1 million into five local companies in 2021, down from $10 million local investments in 2020. Marc Averitt, Okapi’s managing director and co-founder, previously worked as an attorney for Silicon Valley-based Sun Microsystems, which was acquired by Oracle in 2009, and Santa Clara chipmaker giant Intel Corp. (Nasdaq: INTC).
Averitt described 2021 as “a great year,” with a number of its portfolio companies experiencing record growth despite the pandemic.
Last September, Okapi led a $2 million round for Irvine-based billing and payments software developer Chargezoom.
“We are excited to be working with Chargezoom and haven’t seen a startup gain this much traction so early in a very long time,” he told the Business Journal, noting his two decades of experience investing in startups.
Investor Predictions
Averitt said the remote work model introduced during the pandemic is here to stay. It’s also why investing in the most merited concepts, no matter their locale, is important.
Notably, fintech unicorn Happy Money of Tustin moved out of its new headquarters, and opted for a remote-only, distributed workforce in 2020.
“We feel more and more companies are going ‘remote-only’ or switching to a hybrid model, and we expect that trend to accelerate based on the data we have seen,” he said. “We also feel Orange County continues to be a great place to live and to raise a family, so it will become even easier to work from Orange County if your company is located elsewhere.”
