The top 12 firms here had 22 area investments totaling $97.4 million, down from 38 deals worth $109.7 million in 2019, according to the Business Journal’s annual list of venture capital firms.
Toba Capital of Newport Beach far outpaced the rest of its competitors—it committed $52 million in local investments. That’s more than 10 times the amount of any other local investment in 2020.
Vinny Smith created Toba in 2012 after selling Quest Software in Aliso Viejo to computer maker Dell Inc. for $2.8 billion. Smith received about $800 million in the sale.
Toba makes seed- and late-round investments in software companies, including Tustin-based fintech Happy Money and security software maker Netwrix Inc. in Irvine.
Among prominent 2020 deals, Toba participated in a $27 million Series A round for Boulevard, a Los Angeles-based spa management software provider.
Ups & Downs
Other firms with notable jumps in funding deployed:
• Miramar Venture Partners of Corona del Mar, which invests in companies that utilize artificial intelligence and data science technologies, upped its local investments sixfold to $1.4 million.
Last year, it participated in a $35 million Series C financing round for chipmaker Syntiant. The Irvine-based company makes artificial intelligence-powered chips used to control smartphones, earbuds, smart speakers, laptops, hearing aids, wearables, TV remote controls and dozens of other smart products.
• Rx3 Growth Partners, previously known as RX3 Ventures, kicked $4.5 million to local firms, up 41% from 2019. It is a backer of Irvine-based protein powder maker Orgain and Los Angeles-based Therabody, a massage gun product maker that rivals Hyperice in Irvine.
The Newport Beach-based firm was launched by Green Bay Packers QB Aaron Rodgers and his college friend Nate Raabe who brought in his boss, Byron Roth of Roth Capital.
• Flying L Partners LLC reported its investments in OC companies fell 79% from $26.6 million to $5.5 million. The Colorado Springs, Colo.-based firm sports a Newport Beach outpost led by prominent medtech investor Bill Link.
Much of the firm’s funds went to ophthalmology-focused companies last year; it participated in rounds for early-stage drugmaker Tarsus Pharmaceuticals Inc. (Nasdaq: TARS) in Irvine and preservative-free eye drop developer TearClear Corp., which relocated from Irvine to Boston last year.
TearClear moved because its new CEO is based in Boston. It “wasn’t because of a lack of support or opportunity in OC,” Link told the Business Journal after the deal closed last year.
“Access to talent is wonderful, and access to university researchers and collaborators is terrific” in OC, he said.
$500M Effort
One major effort to boost local investments from within OC is well underway.
The CEO Leadership Alliance of Orange County, an organization whose execs spans numerous large local companies and is looking to boost the economic fortunes of the area, has committed up to $100 million in Aliso Viejo-based Visionary Ventures and Miramar.
Through its investments in local funds, the Master Fund expects to provide seed, Series A and Series B funding to companies in sectors spanning artificial intelligence, deeptech, fintech, gaming, medical devices and enterprise software.
It aims to raise a total of $500 million in the next five years for its Master Fund.
“We found that 95% of the innovation capital invested in Orange County startups has come from investors outside Southern California,” said SC Master Managing Partner Dick Gochnauer.
“This means we are exporting 95% of those investment profits to other regions.”
Gochnauer noted that a well-developed network of capital in the region is critical to supporting early-stage, local startups. These local investments not only help young companies survive, but also ensure profits remain local.
Early investors in the Master Fund include Edwards Lifesciences, Pacific Life, Golden State Foods, Anduril, Western Digital and CLA-OC CEOs.
